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April 18 White House Press Briefing

By The White House, The White House - April 18, 2011

The White House

Office of the Press Secretary

See below for an answer to a question (marked with an asterisk) posed in the briefing that required follow up.

* Secretary Geithner briefed the President on the S&P report on Saturday.

12:28 P.M. EDT

MR. CARNEY:  Good afternoon, everyone.  Before we get started with questions I just wanted to give you a readout of the President’s call with Israeli Prime Minister Netanyahu.

The President called the Israeli Prime Minister today to convey his best wishes before the start of Passover.  Noting that he would host a seder at the White House, the President recalled that the story of Passover is one of liberation and freedom, and expressed hope that the Israeli people would be able to celebrate in peace.  The two leaders also discussed U.S.-Israeli cooperation on counterterrorism, how best to move forward in efforts to advance Middle East peace, and the recent violence near the Gaza Strip.

Prime Minister Netanyahu expressed his deep appreciation for U.S. funding for the Iron Dome rocket and mortar defense system, which he noted has successfully intercepted several rockets aimed at Israeli communities.  The President congratulated the Prime Minister on his impressive -- on this impressive Israeli technological achievement and expressed his pride that Israel-American cooperation made it possible.

With the signing of the fiscal year 2011 budget appropriation, the President approved $205 million in U.S. funding for Iron Dome, which is above the annual package of foreign military financing for Israel.

The President and the Prime Minister agreed to stay in close touch on the range of issues facing the United States and Israel.

That is all I have to start this day, and I'll take your questions.  Ben.

Q    Thanks, Jay.  Two topics, please.  Standard and Poor’s downgraded its rating on U.S. long-term debt to negative and cited a material risk that Washington won't be able to get a deal to confront and address these deficits in the coming years, and then the stock market took a plunge.  Just to start with, what’s the President’s reaction to that kind of bond rating?

MR. CARNEY:  Well, first of all, the bond rating remained the same.  The S&P affirmed the AAA bond rating of the United States, but emphasized the importance of timely bipartisan cooperation and action on fiscal reform -- the same emphasis the President made when he gave his speech last Wednesday.  What the S&P analysis also said was that the American economy is strong, it’s growing, it’s diversified, it’s dynamic, it continues to be the most important and most powerful economy in the world.

As for its political analysis, we simply believe that the prospects are better.  We think the political process will outperform S&P expectations.  The President is committed, as he made clear in his speech on Wednesday, to moving forward in a bipartisan way to reach common ground on this important issue of fiscal reform.  And he believes that the fact that Republicans -- that he and the Republicans agree on a target -- $4 trillion in deficit reduction over 10 to 12 years -- is an enormously positive development.  They also agree that the problem exists.  So the third part is the hard part, which is reaching a bipartisan agreement.  But two out of three is important.  And it demonstrates progress.

Now, a statement that observes the fact that there is often gridlock in Washington and that the contentiousness between the two parties sometimes prevents us from getting things done is not one we would disagree with.  But the fact is when the issues are important, history shows that both sides can come together and get things done.  President Ronald Reagan did that with Tip O’Neill, Democratic Speaker of the House.  President Bill Clinton did it with Newt Gingrich, Republican Speaker of the House.  President Obama did it 10 days ago with John Boehner, Republican Speaker of the House.  We can do it again.  The President believes that’s possible and that it will happen.

Q    So I understand your point there that the White House thinks that Washington will outperform this outlook, but I just want to make sure I understand.  When the agency lowers the outlook on the long-term debt to negative, is it your view that  -- what is your view about the significance of that?

MR. CARNEY:  We think a reminder that it is important that we reach agreement on fiscal reform is always valuable, and that’s essentially what it is.  It is another indication on the  -- of the importance of both sides coming together and grappling with this problem and getting to a resolution.  Again, Republicans and Democrats, the President, all agree that there is a problem, that we need to do something about reducing our deficit.  Everyone agrees now on a target for deficit reduction  -- $4 trillion over 10 to 12 years.  That's significant.

And I would point you to Moody’s analysis.  In the wake of the President’s speech on Wednesday, Moody gave a very -- Moody’s gave a very positive assessment, and again today in its weekly report, made another positive assessment.  And the fact that both sides have the same or similar target, that they diagnose the problem similarly, and that the President has begun a process that he hopes will lead to bipartisan negotiations and lead to some sort of bipartisan agreement I think is all an indication of the seriousness with which he takes this issue and the importance that he places on moving forward and addressing it.

Q    One other quick topic, please.  On the severe weather down in the South, as you know, dozens of people have been killed over the last few days by tornadoes across the South.  Does the President have any plans to go to the region and talk to victims and inspect the damage?  As you know, that's often the role that Presidents play.

MR. CARNEY:  The President -- I don't have a scheduling update.  The President spoke with Governor Perdue and Governor Bentley yesterday to express his condolences and make sure they knew that the federal government stands ready through the Federal Emergency Management Agency to assist in the recovery efforts if needed.

FEMA, through its regional office in Atlanta, Georgia, is closely monitoring conditions following the severe storms.  It has dispatched preliminary damage assessment teams to North Carolina, Alabama and Mississippi, and we have folks on the ground assessing the situation and standing ready to provide assistance as necessary.

Q    Staying with S&P, does the warning on the direction and the outlook for the long-term debt rating make a deal over the deficit more urgent?

MR. CARNEY:  I would say that any call for a bipartisan agreement on deficit reduction on fiscal reform is a welcome one, and in that context, I think that it adds to what we believe is some momentum towards that end.

But again, I would point to some important factors here, that even in S&P’s analysis on the U.S. economy it said:  “The economy of the United States is flexible and highly diversified. The country’s effective monetary policies have supported output growth while containing inflationary pressures.  And a consistent global preference for the U.S. dollar over all other currencies gives the country unique external liquidity.”

It goes on with:  “Our ratings on the U.S. rest on its high income, highly diversified and flexible economy, backed by a strong track record of prudent and credible monetary policy.”

Again, there’s a lot here that describes the strength of the United States economy, the strength of our recovery.  And on the political question of whether achieving compromise is within reach, we believe it is, and we rest our faith in those prospects on historical precedent that is as fresh as the recent agreement between the Speaker of the House and the President and other leaders on the fiscal year 2011 budget, and on the seriousness with which this President and other serious parties are approaching this issue.

Q    Any other concrete evidence, apart from the deal over the government shutdown?  I mean, their analysis is based on --

MR. CARNEY:  Right.  I would say the fact that they share the $4 trillion target, they share an analysis of the problem and the fact that it needs to be addressed, and these are important steps toward a deal.  And the fact that it is recognized as an important matter adds to the momentum, we believe.

Q    Jay, there is some legitimate sentiment on the Hill that the talks on deficit reform that the President called for last week have really undermined the work that the Gang of Six has been doing, working on for months.  They’re just a few weeks from -- away from releasing their own plan.  Why not wait for them, or why not include them more in the talks?

MR. CARNEY:  Well, look, the President has said and others have said that we wholly endorse the fact that serious-minded lawmakers of both parties in that group and others have taken on this issue and approached it in a way that recognizes the importance of getting something done and the need to do it in a balanced way.

The fact that the President has come out with his vision should be a positive reinforcement, another indication that this is important work that needs to be done.  And the fact that the President built his vision by borrowing in many ways from the recommendations of the bipartisan commission on which a number of members of that Senate group sat, and that he has been -- his approach has been praised by people, independents, in this field, if you will, of fiscal reform -- like Pete Peterson and David Walker -- gives a good sign, a good indication, of the fact that there is a building consensus around the way to approach this problem.  So he thinks it’s very complementary to the process.

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