Washington, DC–(ENEWSPF)–October 9, 2013 – 1:05 P.M. EDT
MR. CARNEY: Before I ask you to ask questions, let me let you know that, as many of you saw, Secretary Shinseki testified in front of Congress this morning about the impact the shutdown has already had on veterans. As a result of the shutdown, the VA was forced to end overtime for claims processors last week. Mandatory overtime has helped the VA reduce the disability claims backlog approximately 31 percent since March 2013 — about 418,500 on September 30th, down from the peak of 611,000 on March 11th — the lowest level in two years.
The VA’s ability to reduce the disability claims backlog is hampered without the increased productivity gained from overtime for claims processors. As Secretary Shinseki told Congress today, we’ve already seen the backlog increase reversing recent trends. This week, the VA furloughed over 10,000 employees. These employees perform a number of critical activities, from staffing education call centers to offering vocational counseling, and helping veterans manage their finances.
By the end of the month, the VA will run out of funding to pay veterans the benefits they earned. As the Secretary said, disability compensation, pension, education, vocational rehabilitation, and employment benefits will be suspended due to lack of funding.
Our nation’s veterans have done their job for this country. It’s time for Congress to do its job and pass a clean continuing resolution to reopen the federal government and fund these benefits.
With that, I’ll take your questions. Julie.
Q The rhetoric yesterday from both the White House and from Capitol Hill, from the Republicans, made it seem like everyone is pretty entrenched in their positions. But I’m wondering if the White House sees any signs — whether it’s the Paul Ryan op-ed, whether it’s the meeting today between the House Democratic and Republican leadership — that gives you any confidence that there’s movement happening behind the scenes.
MR. CARNEY: The government remains shut down. It is entirely within the power of the Speaker of the House and Republicans in the House to reverse that by allowing a vote on a clean CR to reopen the government. And we hope they will. The consequences of the shutdown are many and they’re compounding. Various economists have noted the impact of a prolonged shutdown on GDP growth, and the specific impacts — including the ones I just mentioned — continue. And the consequences are real and resonant for millions of Americans.
When it comes to raising the debt ceiling, we are now days away from the point beyond which, as the Secretary of Treasury has said, we will no longer have borrowing authority. That puts us — or would put us in uncharted territory. We would have crossed a line we have never crossed before. The consequences are unknowable in the specific, but catastrophic in any case.
So we hope that the reality of the consequences of shutdown and the consequences potentially of threatening default or allowing us to cross that line will compel members of Congress to do the simple thing, the least that they could do, which is reopen the government and ensure that we will pay our bills on time, as we always have.
So the President, I think, yesterday from here expressed his view that in the end he believes Congress will do the right thing. It’s unfortunate that we have to go through these manufactured crises, because there are costs even — well, there are costs obviously because the Republicans shut the government down, and there are costs even to waiting as long as we already have to raise the debt ceiling in a responsible way without drama or delay.
Q Paul Ryan’s op-ed in the Wall Street Journal today got a lot of attention. He doesn’t mention Obamacare in there. And it was seen by some people in Washington as sort of a more palatable approach. Did the White House view it in the same light?
MR. CARNEY: Well, I think that we believe that there is the possibility of finding common ground when we sit down, Republicans and Democrats, to reach a compromise on funding the government and funding our priorities in a way that allows the economy to continue to grow and to grow faster and stronger, and allows for the investments we need for future economic growth and job creation, and allows for continuing the work of reducing our deficit and addressing our longer-term debt challenges. And I’m sure the Chairman would be a part of that if it were to happen.
But it cannot happen under threat of continued shutdown, and it cannot happen under threat of default. The President has been crystal-clear about that. We will not engage in a situation where the tea party faction of the Republican Party is demanding that the American people pay ransom in return for Congress doing its job. That’s just unacceptable for this President and unacceptable for the presidency — in other words, the successors to this President.
Q And then just on one other topic. Has the President made a final decision yet on cutting off some of the aid to Egypt?
MR. CARNEY: What I can tell you is that — two things. One, reports that we are halting all military assistance to Egypt are false —
Q I’m asking about some aid, not all aid.
MR. CARNEY: No, but let me just make clear — because maybe not everybody knows this — but the reports that we are halting all military assistance to Egypt are false. And as the President said in his speech at the United Nations, our overriding interest throughout these past few years has been to encourage a government that legitimately reflects the will of the Egyptian people and recognizes true democracy as requiring the respect for minority rights, the rule of law, freedom of speech and assembly, and a strong civil society.
That remains our interest today. We will continue to work with the interim government to promote our core interests and to support areas that benefit the Egyptian people.
The President was also clear, and has been clear, that we are not able to continue with business as usual. And as you know, we have already announced that we are not proceeding with the delivery of certain military systems. Following on the results of the review directed by President Obama, we will announce the future of our assistance relationship with Egypt once we have made the appropriate diplomatic and congressional notifications.
We will continue to support a democratic transition and oppose violence as a means of resolving differences in Egypt. And our relationship with the Egyptian government, including U.S. assistance to Egypt, will continue. But any announcement about the future of our assistance relationship will come after we’ve made the appropriate diplomatic and congressional notifications.
Q But just to close a loop on this, that makes it sound like the President has made a decision and you just need to notify certain parties before you can say that publicly. Is that fair to say?
MR. CARNEY: I think it’s fair to say that we will have a decision to announce once we’ve made the appropriate notifications, but I’m not going to get ahead of that process.
Q Well, then just to follow, some aid is going to be cut then? Is that — are you willing to —
MR. CARNEY: I think we made clear, Steve, that we’re not going to continue with business as usual. That’s been I think demonstrated by some of the decisions that have already been made when it comes to certain military systems. But for the results of this review that the President asked for, I would have to ask you to wait for us to make that announcement pending the necessary notifications.
Q But going back to the debt ceiling, some of the Republicans were left with the impression after the news conference yesterday that if the President would like to do — or would agree to do this if you negotiate a short-term CR, then he’d be willing to negotiate over the debt ceiling. Is this the case? Just what is he willing to do? What is he not willing to do?
MR. CARNEY: The President will not pay ransom in exchange for Congress doing its job and raising the debt ceiling and maintaining the full faith and credit of the United States. And that is true today and will be true any time that Congress faces the mandated legal responsibility to raise the debt ceiling in order for the United States to continue to pay its bills on time.
We prefer, because the issue here is certainty, that the debt limit, debt ceiling be extended for a longer duration. We support the bill that’s in process in the Senate, authored by Senate Democrats, that would extend the debt ceiling for a year, because that would add to the certainty that is so necessary in maintaining the full faith and credit of the United States.
But what the President was making clear is that he wants Congress to act responsibly to ensure that we pay our bills on time. And if Congress sends him a bill that does that without partisan strings attached, he’ll sign it. But whenever that responsibility looms for Congress, the Republicans — the tea party caucus, they’re not going to get anything in return for fulfilling their constitutional responsibility to ensure that the United States is not a deadbeat and that the United States pays its bills.
Q Jay, I guess for the last couple of days, folks have been wondering what is going to happen to the military spousal death benefits. Any update on that that you can provide?
MR. CARNEY: I thank you for the question. The Department of Defense informed Congress that the department would be legally unable to pay death benefits were there to be a lapse in DOD appropriations — in order words, informed Congress prior to the lapse that that would be the case if there were to be a lapse. Unfortunately, this issue was not explicitly addressed as part of the Pay Our Military Act.
The President was very disturbed to learn of this problem. And he directed the Department of Defense to work with the Office of Management and Budget, and his lawyers, to develop a possible solution. And he expects — the President expects this to be fixed today.
Q Oh, so today?
MR. CARNEY: Correct.
Q This issue will be resolved and those payments should go out —
MR. CARNEY: That’s what the President expects. He was not pleased to learn of this problem. And he has directed the OMB and his lawyers to find a solution. And he expects to have one today.
Q And getting back to the debt ceiling, we know that October 17th is the sort of deadline that was set by the Treasury Secretary. And I’m just wondering, the last time we went through this exercise, we didn’t even go into default and the nation’s credit rating was downgraded. Is there a date before October 17th? Are we entering sort of the red zone or the danger zone even now with respect to the debt ceiling in terms of not getting this resolved because of the potential consequences that may come whether or not we go over the edge?
MR. CARNEY: Well, we’ve already seen — and I’m just reflecting what I’ve read in the financial press — there have already been signs of reaction to the possibility that Congress may fail to fulfill its responsibility here. And as we get closer, I think that reality would become more of an issue.
I think you accurately described what happened in 2011. Because it became clear that Republicans in the House were serious about threatening default, there was an impact on our economy, there was an impact on the global markets and their perception of U.S. credit worthiness. That, in turn, slowed economic growth here, costing us jobs. That, in turn — those consequences, in turn, added to the deficit, added to unemployment.
I mean, this is one of the things that’s so frustrating I think about the rationale behind what some have called the debt limit deniers, that in the name of fiscal probity they’re proposing that we engage in a process with unknowable consequences — except that they’re all severe and negative — that in all cases would add to our deficits.
If the cost of borrowing goes up for the United States, it hits families across the country; it also hits the United States — that adds to our deficits. If economic growth slows or we go into a recession, revenues are down, unemployment goes up, more people depend on assistance — that adds to our deficits. This is irresponsible and reckless, and we should not even flirt with the prospect of default.
Congress should do its job and fulfill its responsibility in the manner that, prior to 2011, it had always been fulfilled, which is raising the debt ceiling without the real threat of default and without threatening default if you don’t get the partisan demand that you ask for.
Q But is there a feeling inside in the White House that it really needs to get done before the 17th, maybe this weekend, to sort of avoid the edge as much as possible?
MR. CARNEY: This is the problem with uncharted territory — the sooner the better. We have been calling on Congress to act and raise the debt ceiling without drama or delay for weeks and months. They did it, remember, in — early this year. And because there was no threat of default, because there weren’t a lot of Republican congressmen and senators talking about — blithely about the apparently positive benefits of this kind of scenario, we did not see any negative consequences; and quite the contrary, the economy continued to grow and the economy continued to create jobs — more than a million at least so far this year.
The opposite of that is what we’re seeing now. And the American people suffered too much during that terrible recession and have fought too hard recovering from it, and are still recovering from it, to then be thrown back into economic dire straits because a faction of one party, in one house of one branch of government isn’t getting what it wants; isn’t getting what it couldn’t get through the legislative process; isn’t getting what it couldn’t get through the ballot box; isn’t getting what it couldn’t get through the Supreme Court of the United States. That’s why we’re here.
And we hope, and the President hopes, that Congress will act responsibly in the very little time available to it to raise the debt ceiling, to turn on the lights, open the government. And then the President will be more than eager to sit down with lawmakers of both parties to talk about our budget priorities and how we can come together and compromise so that we grow our economy, protect the middle class, invest where we need to, and continue the project of responsibly reducing our deficits and addressing our debt.
Q And just to follow up on that, the President said yesterday, towards the end of the news conference that he would be okay with attaching something — he used that word, “attach” — to a clean CR, clean debt ceiling, even if it’s short-term, to start some negotiations that —
MR. CARNEY: I think you’re mischaracterizing. The President believes Congress ought to act responsibly. What the President has said, it ought to raise the debt ceiling and reopen the government. What the President has always said is that when it comes to our budget priorities, he has always been willing to negotiate, just not under the threat of shutdown or continued shutdown. If Congress opens the government, if Congress raises the debt ceiling, if Republicans allow that to happen, then of course he’d be willing to sit down and negotiate with lawmakers over our budget priorities.
What he won’t do is, in any scenario, pay ransom on behalf of the American people to the tea party in exchange for preventing default. Can’t do that, because the consequences of that, as many have written —
Q I don’t mean attach concessions, I meant attach something that would require some discussions to occur. He said something like, well, if my word is not good enough, you can attach something that would require discussions.
MR. CARNEY: Well, I mean, that — all he’s saying is that he’s made abundantly clear, as he has all year long, including in his many conversations with and meals with and coffees with and phone chats with Republican lawmakers over the course of this year, that he’s willing to sit down and negotiate. And how Republicans and lawmakers —
Q He’s pledging completely —
MR. CARNEY: If you missed that, I don’t know where you’ve been. Yes, he is pledging, as he has all year long, to sit down and negotiate with lawmakers over our budget priorities. What he won’t do, because it is irresponsible — the behavior by the Republicans — is pay ransom in exchange for keeping the government open or keeping us from defaulting. Congress ought to take care of those issues and then we can negotiate.
Q Jay —
MR. CARNEY: You have that skeptical look on your face, Jon.
Q I’m always a little skeptical, Jay. (Laughter.) On this question of families of those who have lost loved ones serving our country, you said that the White House knew that this problem would be there in the event of the shutdown and —
MR. CARNEY: The Department of Defense informed Congress, so Congress knew about it. Yes.
Q Yes, so Congress knew about it, the White House knew about it. The President is the Commander-in-Chief, he’s the Chief Executive. Was there literally nothing that he could do to ensure that these families were taken care of? I mean, I —
MR. CARNEY: He’s doing it today, Jon, because it was not addressed by Congress in the Pay Our Military Act. It was not —
Q Did he ask Congress to take care of it in the Pay Our Military Act? I mean, were there any discussions there?
MR. CARNEY: Jon, the Republicans shut the government down. None of this would be an issue if the government were open.
Q I understand.
MR. CARNEY: Okay. Two, the Department of Defense, as every agency did, warned Congress of the myriad consequences of shutdown. This is one of those consequences. And unfortunately, it was not explicitly addressed in the Pay Our Military Act. I’m not assigning blame for that, but it wasn’t. The President learned that this had not been addressed. He directed the OMB and his lawyers to find a solution, and they’re working on that and we expect one today.
So I don’t think there’s any disagreement that this is a matter that needs to be resolved, that it’s unthinkable that these benefits would not be available. And therefore, he’s doing the right thing as Commander-in-Chief and making sure that it’s resolved.
Q But what I don’t understand is there’s discretion clearly in deciding who’s essential and who’s not essential, who’s furloughed and who’s not furloughed. You’re here, these briefings are taking place. I mean, clearly, there’s decisions made. How could there not have been a decision made that if there’s anything that’s essential it would be taking care of those who lost loved ones in the field of battle?
MR. CARNEY: And so the Department of Defense informed Congress that this would be a consequence, among many other consequences, and it wasn’t —
Q But this wasn’t —
MR. CARNEY: Well, Jon, look — I mean, again, if you want to editorialize — the Commander-in-Chief, when he found out that this was not addressed, he directed that a solution be found and we expect one today. I think that’s —
Q So he didn’t find out until yesterday that this wasn’t being addressed?
MR. CARNEY: Again, I think I’ve been pretty clear about the process here. Congress was informed, as it was informed of all of the consequences of shutdown, and they are many, as we see. And a solution to all of this is not the piecemeal reaction to them or Band-Aid approach to solving them. It’s opening the government at funding levels Republicans set.
Remember, if anybody thinks that Democrats in Congress are getting a concession by extending the government on a short-term continuing resolution at funding levels — sequester levels agreed to and celebrated by Republicans, they’re sorely mistaken. Leader Pelosi and Leader Reid deserve credit, and Democrats in the Senate and the House deserve credit that they agreed that it was too important not to shut the government down, they agreed to an extension at those levels. And unfortunately, Republicans instead decided to launch a quixotic crusade against Obamacare — one that everyone knew was going to lead to nothing, and everyone across the country who has even a tangential relationship with the government is suffering as a consequence.
Q But I’m talking about this window that seemed to be open yesterday of a short-term debt ceiling increase, short-term funding and some negotiations that could happen in the interim. Would the White House be open to an agreement that did away with much of that sequester in exchange for some entitlement reforms, for instance, things that the President had endorsed — means testing Medicare, modest entitlement reforms, reopen the government —
MR. CARNEY: Let me just say that I’m not going to negotiate a future budget agreement that can be worked out between the White House, Democrats and Republicans after Republicans agree to leave the matches and the gasoline outside of the room and sit down and negotiate — that they open the government, they turn on the lights, and they remove the threat of default.
What I will say is that we have often seen proposals that basically say, give us what we want in exchange for giving us what we want. And the President has made clear, as he did in his budget, that he is willing to make tough choices — ones that have caused consternation among Democrats, as part of a balanced package that reduces our deficit and invests in the necessary areas of research and development, in education, in infrastructure that will help our economy grow and make us stronger in the future.
So I’m not negotiating specifics, but I think it’s important to remember where we’ve been and how far we’ve come and how we can move forward, and moving forward requires a balanced approach.
Q Now, I’m asking for a principle here, not the specifics, but the principle. Is the White House open to an agreement that would trade sequester cuts — which you’ve cited as being so bad — for longer-term entitlement reforms?
MR. CARNEY: I believe many Republicans have cited sequester cuts, including most specifically the significant cuts to the Defense Department, as bad as well. And what I’m not going to do, again, is negotiate a budget deal here when Congress’s first and foremost responsibility right now is to reopen the government and assure the American people that — because leaders are answering the call of a minority within their representation in Congress, are willing to threaten default. We’re not going to pay a ransom to the tea party so that the United States pays its bills. It’s an irresponsible and reckless approach to governing.
Q Did the President think that the Pay Our Military Act did cover this particular aspect?
MR. CARNEY: Let me just tell you one more time, Major –when the President found out —
Q I’m just saying, fair-minded people could look at that legislation and think it solved the problem. I’m just asking —
MR. CARNEY: What I’m saying is when he learned of this problem he was disturbed and he directed the Department of Defense to work with OMB and his lawyers to develop a possible solution. And at his direction, they are finding a solution and we expect one today.
Q And does that mean by definition that the original interpretation with Defense Department lawyers was erroneous?
MR. CARNEY: Again, no, I’m not saying that. I’m simply saying that Congress was informed of all of the implications and consequences of a potential lapse in funding by the Department of Defense, including that they would be unable to — legally unable to pay death benefits, and that unfortunately, this issue was not explicitly addressed in the legislation that we’ve discussed here, the Pay Our Military Act. Upon learning that that was the case and that this issue had not been resolved, the President directed that a solution be found. And that is underway right now.
Q And does that mean there’s no need for legislation to explicitly address this problem?
MR. CARNEY: We expect a solution today.
Q So Congress doesn’t need to send anything, and if it did, the President wouldn’t sign it?
MR. CARNEY: Well, we expect a solution to this problem today.
Q The President alluded to this yesterday and I want to make sure I understand it correctly, that if — following along Jon and Jim’s questions — if there’s a process on the side, it has to encompass all the various issues of budget and taxation. The President is not interested in and wouldn’t be willing to endorse a process that did not envision a conversation, negotiation about higher revenues?
MR. CARNEY: What can’t be the case, generally speaking — and this has been our approach all year long and our position all year long, reflected in the President’s budget and every time he’s talked about this — is that you can’t say everything is on the table and then say that revenue is off the table.
Q Revenue has to be on the table.
MR. CARNEY: I mean, look, you’ve seen the President’s budget. You’ve seen our approach. The Speaker of the House claimed, and I have no reason to doubt him, that he was willing to put a significant amount of revenue on the table. That was his supposed offer at the end of the year last year. He said that there were hundreds of billions of dollars available in revenue that could achieve — that could be achieved through closing corporate tax loopholes, for example, and through other means. And the President also made an offer at the time that included some tough choices by Democrats that were not universally welcomed by Democrats. He left his offer on the table after the Speaker walked away from it. I haven’t seen — maybe you have — I haven’t seen the Speaker’s offer again since December.
We would very much like to engage with lawmakers of both parties in a constructive conversation and negotiation — after the tea party allows the government to reopen, after the tea party allows us not to default — about our future budget priorities. And the President has always approached this in a spirit of compromise.
As he said yesterday, between him and his Chief of Staff, they’ve had more than 20 meetings and conversations with Republicans about this subject this year, including congressional leaders. So he looks forward to continuing that.
What is absolutely irrefutable is that Republicans demanded that the Senate pass a budget, because they wanted a return to regular order.
Q I got that.
MR. CARNEY: And once Democrats did what Republicans demanded, they then refused to conference. That’s not an irrelevant fact, Major.
Q I got it. I got it. The President also said yesterday that it would be best for the country, for the legislative process to avoid this cycle of near crisis and potential crisis.
MR. CARNEY: Unquestionably.
Q Does not short-term debt limit increase invite that?
MR. CARNEY: It might. The President obviously supports — as I’ve said and others have said — a longer term — a bill that would raise the debt ceiling —
Q Right, but doesn’t deciding something short term invite a process of cyclical repetition of this —
MR. CARNEY: It is up to Congress to decide for how long it will raise the debt ceiling to ensure that the United States can pay its bills without facing this obstacle again. What is absolutely the case is, whether Congress acts to raise the debt ceiling through a clean bill for the short term, the medium term, or the long term, the President will not pay ransom on behalf of the American people to the tea party and Republicans in Congress in exchange for doing that — fulfilling that responsibility for the next time, or the next time, or any other time as long as he is President of the United States.
And he does that because it’s the right thing to do for the American people, it’s the right thing to do for our democratic system and for future Presidents of both parties.
Q Right, I understand that. So his preference is longer term.
MR. CARNEY: Correct.
Q But to avoid default, he would accept — though he would prefer not to — something that’s shorter term, correct?
MR. CARNEY: I think the President said exactly that yesterday.
Q Exactly. So let me just follow up on that. His preference is not to change any of the existing health care law in the context of any default conversation. That’s his preference — clearly stated, reinforced by the Supreme Court — I understand all that. But in the question of a short-term debt limit, he is choosing something that avoids default, though that’s not his preference. Could he not do the same thing on the President’s health care law — it’s not his preference to change it, but agree to some negotiation or some changes or modification to avoid default?
MR. CARNEY: The President will not pay ransom in exchange for default — for the Congress fulfilling its responsibility not to default. Congress has some basic functions. One of them is to pay our bills; another one is to fund the government. Right now, Congress — because of a minority of one party in Congress, one branch of government, the American economy, the American middle class, all of us, are being held hostage. And it would be irresponsible to engage in a ransom exchange because you set a precedent whereby every President in the future —
Q — presidential prerogatives and powers, I understand.
MR. CARNEY: Well, it would just — no, here is the thing. I think it’s very important to note it’s not about presidential prerogatives and powers. It’s about the impact on our long-term economy and the middle class of going through this every three months, or six months, or every year, where the opposition party in Congress, even when it’s driven by a faction within it, in one house, could refuse to pay our bills and therefore threaten default every time it couldn’t get what it wanted through a President. And that would be true if there were a Republican President and a Democratic Congress, or it would be true again in the future if we had a situation like we have today with a Democratic President and a Republican House.
There are long-term consequences to this kind of managing of our affairs. We are the economic power that we are in no small measure because the world looks to us as the beacon of stability in the global economy. That is a very valuable, priceless even, stature that we hold. And to risk it and threaten it because you don’t like a law that provides access to health insurance is unconscionable. If you don’t like the law, change it through the legislative process, or try to. And they have, and they haven’t succeeded. So then they can try to change the representation in government to the point where they have a President who will overturn it or a Congress who will overturn it, and they’re welcome to try that.
Instead, they’re threatening default because they don’t want this law that provides insurance access to millions of Americans to take effect, and that’s just wrong.
Q Do you have anything on the — there are some conflicting reports about what Iran has proposed are not willing to put on the table in terms of either limiting certain production of weapons-grade plutonium or various nuclear facilities. Do you have any overall assessment of what you’ve heard in the last 24 to 48 hours and whether or not they are continuing what you have asserted is a productive arc in terms of perhaps dealing with the situation?
MR. CARNEY: I do not have any new information with regards to the process of determining whether or not Iran is serious about trying to resolve its conflict with the international community over its nuclear weapons program. We continue to see, as I think the public does, signs of a new willingness to address this problem and a generally new posture by the Iranian government. But when it comes to the specific negotiations, I think we’ll look to the P5-plus-1 talks later this month for an indication as to whether —
Q Wait until they put it on the table.
MR. CARNEY: — well, as to whether the Iranians are serious about moving this forward and coming to terms with the international community and fulfilling their obligations when it comes to their nuclear —
Q So no comment until they put it on the table.
MR. CARNEY: Well, again, I wouldn’t have anything to comment on beyond what we’ve seen generally, which we’ve talked a lot about.
Q Jay, when did the President learn specifically that the military death benefits would not be paid?
MR. CARNEY: Again, Ed, for the third time —
Q No, I didn’t hear that question.
MR. CARNEY: Yes, and I — well, it was asked. I can tell you that when he did learn, he asked —
Q Today? Yesterday?
MR. CARNEY: Ed, I don’t know specifically. I can tell you that when he learned that these benefits were not explicitly dealt with in the Pay Our Military Act, he was very disturbed and he asked for the OMB and his lawyers to take action.
Q So why didn’t he have that action taken before today, though?
MR. CARNEY: You have to work out a process. Unless —
Q Because there were news reports about it yesterday.
MR. CARNEY: Unless you’re willing to write the check, Ed, I mean, we —
Q Well, there are people in the country who would write that check —
MR. CARNEY: It takes some time —
Q — and care about this.
MR. CARNEY: It takes some time to — and are you suggesting we don’t, Ed?
Q I’m saying there are people who care about it who want to get it done quickly.
MR. CARNEY: And it’s getting done today.
Q The President said he’s doing it today. Why won’t you tell us what day he learned? Was it yesterday? The day before?
MR. CARNEY: Ed, what I can tell you is when the President —
Q It’s a simple fact.
MR. CARNEY: Right. And when the President found out, he was disturbed and he asked his lawyers and the OMB to get to work on a solution, and we expect a solution today.
What Congress did not do, when it was informed by the Department of Defense that the DOD would be legally unable to pay these death benefits, was take action, A, to keep the government open. That did not seem to disturb the Republicans who thought it was the right thing to do to shut the government down, just as it did not seem to be particularly disturbing to Republicans when they would cause all the other consequences of shutdown. They chose instead to shut the government down.
Unfortunately, this was not addressed in the Pay Our Military Act, which is a bill that was supported broadly, with bipartisan support as well as from the President and signed into law. And I mean, this is not that complicated. I know you’re trying to make a partisan issue out of it, but the —
Q I’m not trying to make a partisan — no, nice try.
MR. CARNEY: But, Ed —
Q Except you won’t tell us the simple fact of when the President learned. You’re trying to say he’s outraged by it, so he wants to move quickly. If he learned last Tuesday, or yesterday, or the day before —
MR. CARNEY: I’m saying that when he learned about it, he asked for — directed those who work for him to find a solution, and we expect a solution today. What I haven’t seen is a solution from Congress, but the President will have one today.
Q So you’ve repeatedly said today and previous days that you don’t want to do all of this in a piecemeal fashion; Republicans should pass a clean CR. We understand — you’ve said that again and again. But you have had to deal with piecemeal, for example, on this issue — the President wants a solution on this.
Yesterday, there was an immigration reform rally in Washington. The National Park Service had to staff it. They say they do that because it was on First Amendment grounds. But how do you — how can you justify letting a rally like that go forward, that could happen yesterday, it could happen next week, before something like military death benefits are taken care of? Like, why is a rally so —
MR. CARNEY: Again, Ed, I’ll answer it now and I look forward to the piece that you’ll do on it. When the President learned that this —
Q I’m talking about the immigration rally.
MR. CARNEY: — that this issue had not been explicitly taken care of in the Pay Our Military Act, he was disturbed and he asked those who work for him to find a solution, and they are busy at that work now and we expect a solution today.
The broader question you ask goes right to the heart of the fact that there are myriad consequences to shutdown, and you can’t run around trying to fix all of them. That’s not the way the United States of America should operate. You should simply open the government.
We’re not — look, the President has never asked for anything in return for Congress fulfilling its responsibility to open the government. He didn’t ask for funding levels that are reflected in the budget he submitted. Neither did the Democrats. The Senate passed a budget as the Republicans demanded, and you will note that the CR that the Senate passed and Democrats support, and the House could pass if the Speaker would allow it to come to the floor and Democrats would support, does not represent funding levels that Democrats have requested. In fact, they fall far short of what Democrats have requested.
But the Democrats believe that because permits need to be issued, because death benefits need to be paid, because Head Start programs need to be opened, because hundreds of thousands of Americans need to get back to work, that we ought to open the government. It’s as simple as that. Just vote and open the government.
Q Great. Two other quick ones on debt. The first one being, the chief economist at J.P. Morgan today suggested something that you probably want to comment on, which is that — Michael Feroli — he said that if we go into default, he thinks there’s going to be a recession that could come within weeks. The President talked about economic chaos yesterday, but I did not hear him use the “R” word. Does the White House believe we’ll go into recession?
MR. CARNEY: I think I’ve said a number of times that the consequences are unknowable and that one of those consequences could be — could be — recession. Some on the outside, in the financial world, have predicted if Congress fails to pay our bills, that we could have a recession on the scale of what we saw in 2007 and 2008, or even worse. That’s the problem with this — we don’t know. All we know is that it would be bad. All we know is that the full faith and credit of the United States would be in doubt, and that it would be unknowable to predict how severe the consequences would be, except — beyond knowing that they would be severe.
Q Great. And the last one — unknowable indeed, but Moody’s, I think you would agree, is pretty fair in looking at these things, studying what could happen and what might not happen. They have a memo circulating on the Hill today suggesting that they believe the government would still pay interest and principal on debt, and they believe, they claim that U.S. creditworthiness would still be intact. And they’re saying that this is less of a threat now than in 2011 because of what you’ve pointed out previously, that the budget deficit is lower now, so we have less short-term debt. Long-term debt is still there, but we have less short-term debt. So my question is, how do you answer Moody’s coming in today and telling lawmakers that they think the full faith and credit of the U.S. will be intact even if we potentially reach this?
MR. CARNEY: Here is what I can tell you. The Treasury Secretary has informed Congress that the United States will run out of borrowing authority when it exhausts its so-called extraordinary measures, no later than October 17th. He estimates that at that time, we will be left to meet our country’s commitments with approximately and only $30 billion of cash on hand.
Now, this would amount — which sounds like a lot — would be far short of net expenditures on certain individual days, which can be as high as $60 billion. At that point, meeting our nation’s financial obligations, including Social Security and Medicare benefits, payments to our military and veterans, and contracts with private suppliers, will be put at risk.
Now, some in Congress seem to think that they can keep us from failing to pay our nation’s bills by simply raising the debt ceiling right before the moment our cash balance is drawn down to zero. This is misguided for several reasons. For one, it is not possible for the U.S. Treasury to know with precision when that moment will be, because outgoing payments and incoming receipts vary significantly each day. Operating on a small cash balance creates the real danger that we run out of cash and hit zero sooner than expected, which could be catastrophic.
At the same time, we are relying on investors from all over the world to continue to hold U.S. bonds. Every Thursday — this is something that is kind of astounding for people who don’t follow these things — every Thursday, the United States rolls over approximately $100 billion in U.S. bills. If U.S. bondholders — these are investors around the world, including sovereign funds, foreign countries — if U.S. bondholders decided that they wanted to be repaid rather than continuing to roll over their investments, we would unexpectedly dissipate our entire cash balance like that.
So think about it. If you look at your checking account and you have a balance of $500 — so you’re in the black $500 — but you know you’ve written checks for $2,000, you just don’t know when those checks are going to be cashed and when those obligations will be owed, that is a hugely risky proposition. And it is certainly not a situation that the United States of America should find itself in simply because a group of lawmakers with an ideological agenda are angry that they haven’t gotten what they wanted through the normal legislative or electoral process. We can’t have that.
Q Jay, thanks. Just following up on the question of when President Obama found out, I hear you saying you’re not quite sure. Can you take the question and get back to us?
MR. CARNEY: I will take the question. What I can tell you again —
Q Because I think we need to know specifically —
MR. CARNEY: — is that the Commander-in-Chief, when he found out —
Q We just need to know when.
MR. CARNEY: — he was disturbed and he directed those who work for him to find a solution, because the shutdown — as Congress was informed — makes DOD legally unable to pay these benefits. And the President wants a solution.
Q And I think we just want to know if he found out today or if it was yesterday or several days ago. So if you could just take the question.
MR. CARNEY: Again, and what I can tell you is when he found out, he directed that action be taken. And we expect a solution today.
Q I think the concern is that clearly action hasn’t been taken quickly enough, because it’s had a real impact so far.
MR. CARNEY: It’s correct that Congress — Republicans shut the government down knowing that this would happen and haven’t taken action. The President, when he found out that the Pay Our Military Act did not explicitly address this problem, has ordered that we find a solution through the administration, and we’re working on that.
Q I know you said he’s disturbed, but what would he say to these families who have been impacted who are outraged?
MR. CARNEY: That it’s unconscionable that the Congress of the United States would not open the government and ensure that these benefits — and benefits of all different kinds to our veterans and others — be available and paid on time. And in this specific case, because it is so important, he is directing that a solution be found.
Q I want to ask you about The Washington Post report that says that the administration was warned beforehand by insurers, health care officials about potential problems with the health care website. Can you confirm that? And if that is the case, why weren’t those problems vetted? Why wasn’t the start date delayed by a few days or a few weeks so that people could actually go online and sign up and get health care?
MR. CARNEY: Sure. What I can tell you is that, as we’ve said all along in the run-up, that there would be, in an enterprise of this nature that had not been done before — much as was the case with the startups of other significant government programs, including Medicare Part D under President George W. Bush — we expected there would be problems and glitches that needed to be fixed along the way.
Q So you weren’t warned?
MR. CARNEY: I don’t think — again, I’m not aware of the specific conversations that are reported there. What I can say is that everyone was aware and we told you that there would be glitches and there would be problems. And we have told you and been very transparent about the fact that the interest has been even greater than we expected, which is a high-class problem. So what I can tell you is that, as was the case when the new operating system for the Apple iPhone was released, they didn’t pull it off the market and nobody called for Apple to stop selling iPhones. They fixed the problem and moved forward — and that’s what we’re doing.
Every day, we’re taking steps to address this problem. Every day, the situation improves, and more and more Americans — the millions who have demonstrated their interest in finding out about the opportunities for health insurance through the marketplaces — are finding that experience easier. We’ve taken action to ensure that you can enroll and shop through the call centers to alleviate some of the burden created by the issues with the website. But each day, this is going to get better.
And it’s a six-month — in answer to your question, it’s a six-month enrollment period. And this problem is being — this situation is being addressed day-by-day, and improving day-by-day. And we expect that to be the case.
Q The primary explanation that you have given for these glitches is the unexpectedly high volume of traffic that you got. This report suggests that that’s not entirely true. So do you stand by that as an explanation? Or are there other reasons for these glitches?
MR. CARNEY: The central problem caused, including the issues with the servers I discussed the other day, are driven by high volume. There’s no question that there are fixes that are being made and need to be made, because these problems have been
exposed and exacerbated by the volume. But they’re driven by the volume.
And again, I’m not saying that this is a situation that doesn’t need fixing; it does — which is why we’re making improvements every day. People are working overnight to make those improvements to the website. What is absolutely the case, and you’ve seen it anecdotally reported across the country, is that Americans are finding out that they have, for the first time, affordable health insurance available to them. Americans are making the choice to enroll and purchase that insurance.
And I think that, as I’ve said in the past, that one of the reasons why we’re having this impasse and tea party Republicans shut down the government over Obamacare is because they know that it’s the law of the land, as the Speaker of the House said after last year’s election, and it’s being implemented. And as it gets implemented, more and more Americans are discovering that there are benefits available to them that will improve their lives, make their lives more secure.
And if you’re a family of four and you’re a father or mother who votes Republican every time, who voted against Barack Obama and voted against Democrats who supported Obamacare, and you find out that you can affordably purchase health insurance for your family — good, quality insurance and coverage — you’re going to do it because it’s the right thing to do.
And right now, this is not about — when it comes to the provision of these benefits to the American people, it’s not about politics anymore. It’s just about individuals and families deciding what’s right for them, and finding out that there are protections and services available to them through the Affordable Care Act that they never had before.
And that’s why we’re going to continue to work to make sure that the Healthcare.gov site is improved and to make sure that the millions of Americans who have demonstrated their interest in finding out about these marketplaces and the many options available to them are getting the best possible consumer experience they can.
Q Do you know, Jay, if by chance — and this is to follow up on that —
MR. CARNEY: Lynn.
Q Thank you. (Laughter.) We know that President Obama is an early adaptor, he has handheld devices. Do you know — and a lot of consumer experiences he can’t take part in because of his job. Do you know if he has tried to use or to log on to Healthcare.gov? If he goes back to the site for his namesake program —
MR. CARNEY: There’s no question that he’s capable when it comes to using technology. I don’t know that he’s — he gets briefed on implementation regularly and is shown how the system works, so I know he’s very familiar with it. I don’t know if he has personally gone on the website absent those briefings that he’s had. But he is up to date on the implementation process. He’s up to date on the steps being taken to address the problems with the website. And he has instructed his team to work 24/7 to resolve these problems.
Q Could you take the question, if he has tried it?
MR. CARNEY: I can take the question, Lynn. You can ask me a lot of things about what he is reading or looking at; I may know. But I can tell you that he — I can guarantee you he knows in great detail how the website works, what the issues are, the number of people across the country who have been going to the website and exploring the options available to them. And he has made clear to his team that he wants them to take every measure necessary to improve the consumer experience.
Q Back to the debt limit issue for a minute. You painted a pretty dire portrait of what would happen to the economy, and the President talked about this yesterday. Are there specific things that ordinary Americans should be doing to prepare for default? Should they be saving more money? Should they spend less? Should they delay a home renovation or delay a car purchase?
MR. CARNEY: I would not be in a position to offer that kind of advice. What I think every American would hope is that the people they send to Washington make wise choices about how they are stewards of our economy. And the wise choice in this case is to ensure that we pay our debts, that the United States does not default, and that we don’t inflict any more wounds — wholly unnecessary wounds on our economy right when it’s growing and there are signs of further recovery.
It’s just, again, as I’ve said before, irresponsible and reckless to take this course of action. And let’s examine again — and I’ll do it briefly — how we got here. The Speaker of the House said his preferred course of action — he said earlier this year he couldn’t imagine attaching Obamacare to shutting down the government or defaulting. And he pursued a process that he said — a path that was going to allow for a clean continuing resolution.
And the Majority Leader and Leader Pelosi agreed that that was the responsible thing to do, even though a continuing resolution set at current funding levels does not represent their priorities, because we shouldn’t shut down the government.
And instead, as we all know, the Speaker changed his mind under pressure from Senator Cruz and others who were convinced, I suppose, that they could abolish or defund or delay the Affordable Care Act in return for keeping the government open.
And any sophisticated analysis of how that would play out would have told them that that wasn’t going to happen. And so, again, out of ideological — on an ideological crusade, they have led us to this path where the government is shut down and hundreds of thousands of Americans are at home unable to work and there are all sorts of consequences of shut down.
And then, now, with the same group driving the train up there, we’re now facing the possibility of Congress not paying our bills for the first time, which would — again, as the President has made clear — economic shutdown is an even more unimaginably severe consequence of this kind of congressional irresponsibility. And we should not allow it to happen.
Q But the Congress doesn’t seem any closer to a solution today and October 17th is pretty soon. So what should people be doing?
MR. CARNEY: That’s a good point. Again, I —
Q People looking at home, watching you guys paint this picture of the economic shutdown, what can they do about it?
MR. CARNEY: I think every American should be rightly concerned about the fact that a faction of one party in one house, in one branch of government is insisting that we keep the government shut down and threatening to default. And we have some members of the Republican Party on record suggesting that default wouldn’t be a bad thing, which is rather remarkable. So I think that should be of concern to the American people.
Mark, and then Michelle.
Q Jay, when you say that you expect a solution today to the death benefit issue, is that an administrative executive solution, or does it involve legislation?
MR. CARNEY: My understanding is it does not involve legislation. We obviously can’t pass legislation here.
Q No, I know that. But I ask, because the House today —
MR. CARNEY: Again, the President has directed the —
Q — passed a bill that would specifically fund the death benefits of which you speak. And you’re ruling that out, right?
MR. CARNEY: Well, what I’m saying is the President — we will have a solution to this problem today.
Q But you’re ruling out going along with the House bill, like all the others?
MR. CARNEY: I’m saying that the President has directed the OMB and his lawyers to find a solution to this. They’re working on it and we’ll have it today.
Q And on the issue of veterans’ benefits, which you raised earlier, the House has passed a veterans’ benefits measure, which the Senate won’t take up. Senator Reid ruled bringing it to the floor. And that’s still okay with you?
MR. CARNEY: You’ve asked me every day about why we shouldn’t be passing these piecemeal measures that the Republicans insist we pass. Because the way to fix all these problems is not to notice one in the press and then fix it a day, a week, two weeks or a month after people have been suffering the consequences of shutdown. The way to do it is to open the government. The way to do it is respond to the majority and open the government. Allow a vote. Move on. We can negotiate about the budget and our priorities, but not under threat of continued shutdown, not under threat of default.
And this piecemeal approach is gimmickry and it’s irresponsible. They should just — if they are concerned about the consequences of shutdown, they should open the government at funding levels that they themselves celebrated and set.
Q If you fix this specific problem, is that a fix? I mean, even if it’s a Band-Aid, Band-Aids can be useful.
MR. CARNEY: Again, Mark, I understand that Republicans, flailing for a strategy, have adopted this one, even though, overwhelmingly, they know the right thing to do is just to open the government. At what point do you just acknowledge that when you have countless negative consequences of shutdown, that the responsible thing to do is simply to end the shutdown, and then negotiate about how we decide and define our budget priorities in the future.
Q Thank you, Jay. I know you don’t want to get —
MR. CARNEY: Welcome back.
Q Thank you. I know you don’t want to get ahead of the event this afternoon. But can you talk about what Janet Yellen’s nomination would mean for progress in getting women into top governing roles and if the White House believes there’s still a lot of room for improvement in that direction?
MR. CARNEY: Well, I would simply say that Janet Yellen is one of, if not the most, qualified nominee for this position ever, based on her experience and credentials. And it is certainly notable that she would be the first, if confirmed, female chair of the Federal Reserve. But equally notable is that she has served as a chair of the Council of Economic Advisors. She has been a regional Fed Bank president, and she is currently vice chair of the Federal Reserve. She also has enormous academic credentials. I would note that she is vice chair, the number-two job at the Fed, because the President appointed her to that post in 2010.
So this is a case of exceptional wisdom and experience, a tough, non-ideological approach to the responsibilities that she has now and would have if confirmed as chair of the Fed. And the President looks forward to the Senate considering this nomination and confirming her.
Q Is the White House confident that the nomination process in the Senate won’t distract from the other fiscal issues and deliberations?
MR. CARNEY: We’re confident that Dr. Yellen is enormously qualified and that the Senate will fulfill its responsibility in examining her qualifications, her experience, and will act accordingly, and that that will proceed and hopefully proceed expeditiously with the Senate fulfilling all of its responsibilities, and, hopefully, as we continue to deal with the obstacles to opening the government and paying our bills that the tea party has thrown up in recent days.
Q Thanks, Jay. I can’t think of the last time the President had the entire House Democratic caucus to the White House to discuss a policy matter — although I’m sure Mark could tell me. Does he see this as more of a give-and-take question-and-answer session, a pep rally, a brainstorming session? How would you characterize it?
MR. CARNEY: I would say that the President understands that the elected members of Congress of both houses are those who have the final say when it comes to — or at least the ultimate say to pass legislation to open our government and ensure that we pay our bills, and that he will express his views to the House Democratic caucus on these matters, and will, I’m sure, hear from some members of the caucus about their views.
You should know that we have extended invitations to the House Republican conference, the Senate Democratic caucus, and the Senate Republican conference to come to the White House as well in coming days. And as we nail those down, we’ll have more information for you.
So this isn’t about just one house or one party. This is about the President meeting with as many members of Congress as he can to talk about these very important issues and the need to make sure that we don’t inflict severe damage on our economy and on our middle class unnecessarily.
Q And because there are so few opportunities during the year for every member of Congress to come to the White House, is this purely mission-driven? Or will there also be a social component? Will there be —
MR. CARNEY: No, this is substance, this is not social.
Q Jay, the military benefit act and other issues — high-profile issues that have come up during the shutdown have led a lot of Republican critics to suggest that the White House has sort of targeted high-profile things to prolong the pain for them on this issue. Can you —
MR. CARNEY: I’m not sure I understand that. How could that be? They shut down the government and blame us for the consequences of the shutdown?
Q Well, can you assure us that the agencies that develop the contingency plans and decided which jobs to furlough did not have —
MR. CARNEY: Yes, I can. And what has been remarkably unreported is that every agency posted and briefed Congress on their plans for a lapse in funding, and those plans are consistent with past practice. And again, I’m not sure what charge you’re making, except that when it comes to the essential and unique responsibilities and services that our military men and women provide, the President has made clear that we need to take care of them, and in the case of this particular issue with death benefits, we need to take action to ensure that those are paid.
Q And you think that’s been across the board on all the agencies, there’s been no consideration of what might cause more headlines or more —
MR. CARNEY: I mean, you’re asking an open-ended question. Again, I’m not sure what you’re asking me. The answer is every agency, as I understand it — obviously there’s a number of them — in keeping with past practice, hoping there wouldn’t be a shutdown but understanding it was the responsible thing to do to plan for one, provided its contingency plans and posted them and did so responsibly.
Thank you all very much.
2:08 P.M. EDT