Press Conference by President Bush

    WASHINGTON, Aug. 9 /PRNewswire-USNewswire/ -- The following is a
 transcript of a press conference by President Bush:
     James S. Brady Briefing Room
     10:33 A.M. EDT
     THE PRESIDENT: Good morning, thank you. When I came into office in
 2001, our nation was headed into a recession. So we cut the taxes across
 the board. And hardworking Americans have used this tax relief to produce
 strong and lasting economic growth.
     Since we began cutting taxes in 2001, our economy has expanded by more
 than $1.9 trillion. Since the tax cuts took full effect in 2003, our
 economy has added more than 8.3 million new jobs, and almost four years of
 uninterrupted growth. Inflation is low, unemployment is low, real after-tax
 income has grown by an average of more than $3,400 per person since I took
 office. The American economy is the envy of the world, and we need to keep
 it that way.
     Our economy is growing in large part because America has the most
 ambitious, educated and innovative people in the world -- men and women who
 take risks, try out new ideas, and have the skills and courage to turn
 their dreams into new technologies and new businesses. To stay competitive
 in the global economy, we must continue to lead the world in human talent
 and creativity.
     So in my 2006 State of the Union address, I announced the American
 Competitiveness Initiative, and I called on Republicans and Democrats in
 Congress to join me in this effort, to encourage innovation throughout our
 economy. As part of this initiative, I asked Congress to expand America's
 investment in basic research, so we can support our nation's most creative
 minds as they explore new frontiers in nano-technology or supercomputing or
 alternative energy sources. I asked Congress to strengthen math and science
 education, so our children have the skills they need to compete for the
 jobs of the future. I asked Congress to make permanent the research and
 development tax credit, so we can encourage bolder private-sector
 initiatives in technology.
     Today I'm going to sign into law a bill that supports many of the key
 elements of the American Competitiveness Initiative. This legislation
 supports our efforts to double funding for basic research in physical
 sciences. This legislation authorizes most of the education programs I
 called for in the initiative I laid out at the State of the Union. These
 programs include Math Now proposals to improve instruction in mathematics,
 and the advanced placement program my administration proposed, to increase
 the number of teachers and students in AP and international baccalaureate
 classes.
     These are important steps forward, and so I'm going to sign the bill.
 I'm looking forward to it. Yet the bill Congress sent to my desk leaves
 some of the key priorities unfulfilled, and authorizes unnecessary and
 duplicative programs. I will continue to focus my budget requests on the
 key priorities in the bill I outlined, and will work with Congress to focus
 its spending on those programs that will be most effective.
     I will continue to press Congress to approve the remaining measures of
 the American Competitiveness Initiative. These measures include the Adjunct
 Teacher Corps program to encourage math and science professionals to take
 time out of their lives and teach in our schools, and to inspire the youth
 to become more interested in math and science. I believe Congress ought to
 make the research and development tax credit a permanent part of the tax
 code, to encourage investment.
     The bill I will sign today will help ensure that we do remain the most
 competitive and innovative nation in the world. I thank members of Congress
 from both parties who worked hard to secure its passage. I particularly
 want to thank Senators Pete Domenici, Jeff Bingaman, Lamar Alexander and
 John Ensign, as well as Congressmen Bart Gordon and Vern Ehlers.
     You know, this bill shows that we can work together to make sure we're
 a competitive nation. There's a lot of areas where we can seek common
 ground coming this fall, and I'm looking forward to working with members of
 both parties to do that.
     Thank you for coming. I'll be glad to answer some of your questions.
 Starting with you, Terry.
     Q Mr. President, former Chairman of the House Transportation Committee,
 Republican Don Young, says there are about 500 bridges around the country
 like the one that collapsed in Minneapolis last week. And Young and other
 Transportation Committee members are recommending an increase in federal
 gasoline taxes to pay for repairs. Would you be willing to go along with an
 increase in gasoline taxes of five cents a gallon or more?
     THE PRESIDENT: First of all, Secretary Peters is gathering information
 and will report to the White House and report to the nation about what she
 finds about whether there are any structural design flaws that may be
 applicable to other bridges. She's in the process of gathering this
 information now.
     The American people need to know that we're working hard to find out
 why the bridge did what it did so that we can assure people that the
 bridges over which they will be traveling will be safe. That's step one.
     You know, it's an interesting question about how Congress spends and
 prioritizes highway money. My suggestion would be that they revisit the
 process by which they spend gasoline money in the first place.
     As you probably know, the Public Works Committee is the largest
 committee -- one of the largest committees in the House of Representatives.
 From my perspective, the way it seems to have worked is that each member on
 that committee gets to set his or her own priority first, and then whatever
 is left over is spent through a funding formula. That's not the right way
 to prioritize the people's money. So before we raise taxes which could
 affect economic growth, I would strongly urge the Congress to examine how
 they set priorities. And if bridges are a priority, let's make sure we set
 that priority first and foremost before we raise taxes.
     Q Thank you, Mr. President. One of your chief allies in the war on
 terrorism, President Musharraf of Pakistan, has faced so much instability
 and civil strife recently that there has been talk of declaring a state of
 emergency. How concerned are you about President Musharraf's situation and
 whether this might undermine Pakistani efforts against the Taliban and al
 Qaeda elements in the bordering areas of his country, which have been
 roundly criticized recently?
     THE PRESIDENT: You know, I've seen the reports of what they call an
 emergency declaration. I have seen no such evidence that he's made that
 decision. In my discussions with President Musharraf, I have reminded him
 that we share a common enemy: extremists and radicals who would like to do
 harm to our respective societies -- in his case, they would like to kill
 him, and they've tried.
     I have made it clear to him that I would expect there to be full
 cooperation in sharing intelligence, and I believe we've got good
 intelligence sharing. I have indicated to him that the American people
 would expect there to be swift action taken if there is actionable
 intelligence on high-value targets inside his country. Now, I recognize
 Pakistanis a sovereign nation, and that's important for Americans to
 recognize that. But it's also important for Americans to understand that he
 shares the same concern about radicals and extremists as I do and as the
 American people do.
     So my focus in terms of the domestic scene there is that he have a free
 and fair election. And that's what we have been talking to him about and
 I'm hopeful they will.
     Yes, we'll just go down the line here.
     Q Thank you, Mr. President. You speak often about taking care of the
 troops and honoring their sacrifice. But the family of Corporal Pat Tillman
 believes there was a cover up regarding his death, and some say perhaps he
 was even murdered, instead of just friendly fire. At a hearing last week on
 Capitol Hill your former Defense Secretary, Donald Rumsfeld, other
 officials used some version of "I don't recall" 82 times. When it was his
 term to step up, Pat Tillman gave up a lucrative NFL career, served his
 country and paid the ultimate sacrifice. Now you have a chance to pledge to
 the family that your government, your administration will finally get to
 the bottom of it. Can you make that pledge to the family today, that you'll
 finally, after seven investigations, find out what really happened?
     THE PRESIDENT: Well, first of all, I can understand why Pat Tillman's
 family, you know, has got significant emotions, because a man they loved
 and respected was killed while he was serving his country. I always admired
 the fact that a person who was relatively comfortable in life would be
 willing to take off one uniform and put on another to defend America. And
 the best way to honor that commitment of his is to find out the truth. And
 I'm confident the Defense Department wants to find out the truth, too, and
 we'll lay it out for the Tillman family to know.
     Q But, Mr. President, there have been seven investigations and the
 Pentagon has not gotten to the bottom of it. Can you also tell us when you,
 personally, found out that it was not enemy fire, that it was friendly
 fire?
     THE PRESIDENT: I can't give you the precise moment. But obviously the
 minute I heard that the facts that people believed were true were not true,
 that I expect there to be a full investigation and get to the bottom of it.
     Q Sir, on Monday, at Camp David, when you met with President Karzai
 from Afghanistan, you were asked if you had actionable intelligence in
 Pakistan of top al Qaeda leaders; would you take action unilaterally, if in
 fact you felt that President Musharraf simply, for one reason or another,
 just simply couldn't get his people there in time, would you move in? And
 you said, if we had actionable -- good, actionable intelligence, we would
 get the job done.
     My question, one, is, who is "we"? Does that we include the Pakistanis,
 or -- because the question says, Musharraf wouldn't be able to be in --
 would you do it unilaterally? And one reason this is a hot question this
 week is that one of the Democratic presidential candidates, Barack Obama,
 talked about taking unilateral action. He kind of got beaten up by people
 in the Democratic Party, and by Mitt Romney in your party, Romney comparing
 him to Dr. Strangelove. I don't know if you would agree with that, or if
 you would feel --
     THE PRESIDENT: John, I suspect that over the course of the next months,
 when I hold a press conference, you'll be trying to get me to engage in
 presidential politics; trying to get me to opine about what candidates are
 saying, whether they be Republicans or Democrats. And hopefully I'll be
 disciplined enough not to fall prey to your question, not to fall into that
 trap.
     To the question you asked, and to my answer in Camp David, I said I'm
 confident that we -- both the Paks and the Americans -- will be able to
 work up a plan, based upon actionable intelligence, that will bring the top
 al Qaeda targets to justice. I meant what I said. We spend a lot of time
 with the leadership in Pakistan, talking about what we will do with
 actionable intelligence. And the question was, am I confident that they
 will be brought to justice, and my answer to you is, yes, I am confident.
     Q Are you confident -- permit me to have one follow-up, sir?
     THE PRESIDENT: Sure. We're getting into kind of a relaxed period here.
 I'll try to be more accommodating to fellows like you.
     Q It's widely assumed that the CIA operatives are in Pakistan,
 cooperating with the Pakistanis and that they're sharing everything with
 you, and vice versa. Is that a fair assumption?
     THE PRESIDENT: John, what's fair is -- what you must assume is that I'm
 not going to talk about ongoing intelligence matters.
     Q Mr. President, I was talking with a journalist about an hour ago in
 Baghdad who says to be a cynic in Iraqis to be naive at this point; that
 there is discernable progress, undeniable progress on the battlefield, but
 there is just as discernable and undeniable lack of progress on political
 reconciliation. Given the premise of the surge is to give the Iraqi
 government breathing space to gets its business done, given that they're
 not getting their business done, are the American people entitled to hear
 from you more than, I've told Prime Minister Maliki he's got to do better?
     THE PRESIDENT: As you know, General Petraeus and Ambassador Crocker
 will be coming back to report on the findings of the success of the surge.
 The surge success will not only include military successes and military
 failures, but also political successes and political failures. And my own
 perspective is, is that they have made some progress, but not enough. I
 fully recognize this is a difficult assignment. One of the things that --
 it's difficult because of years of tyrannical rule that have created a lot
 of suspicions. And there's a lot of -- these folks need to trust each other
 more.
     Secondly, from my perspective, we're watching leaders learn how to be
 leaders. This is a new process for people to be democratic leaders. Now, no
 question they haven't passed some of the law we expected them to pass up to
 now. That's where a lot of people will focus their attention. On the other
 hand, there is a presidency council, with people from different political
 parties, trying to work through some of these difficult issues, trying to
 work through the distrust that has caused them not to be able to pass some
 of the law we expect.
     And the July 15th report that I submitted to Congress, there were
 indications that they had met about half the benchmarks, and some of the
 political benchmarks they were falling short. One of the things I found
 interesting is that the assembly -- elected parliament has passed about 60
 pieces of legislation this year, some of which are directly relevant to
 reconciliations, like judicial reform; some of which were unwinding
 Saddam's laws in the past.
     One of the questions I recently asked about, is there a functioning
 government, is there -- a lot of Americans look at it and say, there's
 nothing happening there; there's, like, no government at all, I expect
 they're saying. So I asked about the budgeting process -- in other words,
 is there a centralized budgeting system that takes the oil revenues? I
 understand about 97 percent of the Iraqi revenues to date come from oil.
 And do they have a rational way of spending that money for the good of
 society? Now most of the money, it turns out, is going into their military
 operations -- operating expenses and capital expenses.
     But one of the things I found interesting in my questions was there is
 revenue sharing -- in other words, a central government revenue sharing to
 provincial governments. It surprised me, frankly, because the impression
 you get from people who are reporting out of Iraq is that it's like totally
 dysfunctional -- that's what your -- I guess your kind of -- your friend or
 whoever you talked to is implying.
     In 2006, the central government allocated $2.3 billion to the
 provinces. You know, I'm not exactly sure how the funding formula worked,
 but a quick analysis, there is no question that Shia and Sunni provinces
 and Kurdish provinces were receiving money. Of the $2.3 billion, $1.9
 billion had been obligated or spent. Now, some of that money is being
 better spent now because of bottom up reconciliation that's taken place in
 places like Anbar, particularly with the help of our provincial
 reconstruction teams. The PRTs are helping. That's not to say what -- my
 point to you there is that there needs still to be work in making sure that
 the provincial governments are functioning well, to earn the trust of the
 people -- it's not just the central government that we're working with,
 we're also working with provincial governments to make sure that people
 have -- are inspired to believe that the state is in their interest.
     The point I'm making to you on this, Jim, is that there is a lot of
 work left to be done, don't get me wrong. If one were to look hard, they
 could find indications that -- more than indications, facts that show the
 government is learning how to function. People say we need an oil revenue
 sharing law. I agree with that, that needs to be codified. However, there
 is oil revenue sharing taking place, is my point. There's a lot of work to
 be done, and the fundamental question facing America is, is it worth it,
 does it matter whether or not we stay long enough for an ally in this war
 against radicals and extremists to emerge? And my answer is it does matter.
 Long-term consequences will face our country if we leave before the job is
 done. How the troops are configured, what the deployment looks like will
 depend upon the recommendations of David Petraeus.
     David.
     Q Mr. President, I want to get your thoughts about the volatility in
 the financial markets, but specifically, a series of questions. Do you
 think that housing prices will continue to fall? Do you think that the
 inability of people to borrow money the way they used to is going to
 spillover into economy generally? And what are you prepared to do about it?
 And, specifically, are you considering some kind of government bailout for
 people who might lose their homes?
     THE PRESIDENT: David, I'm wise enough to remind you that I'm not an
 economist, and that I would ask you direct predictions and forecasts about
 economic matters to those who make a living making forecasts and
 predictions. I suspect you'll find on the one hand, on the other hand, in
 how they predict. (Laughter.)
     Now, what I focus on are the fundamentals of our economy. My belief is
 that people will make rational decision based upon facts. And the
 fundamentals of our economy are strong. I mentioned some of them before.
 Job creation is strong. Real after-tax wages are on the rise. Inflation is
 low. Interestingly enough, the global economy is strong, which has enabled
 us to gain more exports, which helped the second quarter growth numbers to
 be robust, at 3.4 percent.
     Another factor one has got to look at is the amount of liquidity in the
 system. In other words, is there enough liquidity to enable markets to be
 able to correct? And I am told there is enough liquidity in the system to
 enable markets to correct. One area where we can help consumer -- and
 obviously anybody who loses their home is somebody with whom we must show
 enormous empathy.
     The word "bailout," I'm not exactly sure what you mean. If you mean
 direct grants to homeowners, the answer would be no, I don't support that.
 If you mean making sure that financial institutions like the FHA have got
 flexibility to help these folks refinance their homes, the answer is yes, I
 support that.
     One thing is for certain, is that there needs to be more transparency
 in the -- in financial documents. In other words, a lot of people sign up
 to something they're not exactly sure what they're signing up for. More
 financial literacy, I guess, is the best way to put it. We've had a lot of
 really hardworking Americans sign up for loans, and the truth of the matter
 is they probably didn't fully understand what they were signing up for. And
 therefore, I do believe it's a proper role for government to enhance
 financial education initiatives, and we're doing that, we've got money in
 the budget to do that.
     Let's see here --
 
     Q    Can I just ask one follow up, sir?  Come on.  (Laughter.)
 
     THE PRESIDENT:  Sure.
     Q Because you weren't this circumspect when you were talking to
 reporters yesterday about the economy.
     THE PRESIDENT:  How do you know?  You weren't there, David.
 
     Q    Well, you're right, I wasn't, but --
     THE PRESIDENT: I'm curious to know why you weren't there. Ask Baker, he
 was there. (Laughter.)
     Q Only economics reporters were allowed.
     THE PRESIDENT: I think I pretty much said the same thing yesterday, in
 all due respect.
     Q What's going on in the housing market, is it a correction or a
 crisis, in your view? Can you assess that?
     THE PRESIDENT: Yesterday I did comment upon that, that there was a -- I
 talked about the different scenarios that I had been briefed on about
 whether or not there would be a precipitous decline in housing or whether
 it would be what one would call a soft landing, and it appeared at this
 point that it looks we're headed for a soft landing. And that's what the
 facts say.
     Thank you. Mike.
     Q Mr. President, thank you. There is more evidence of Iranian weapons
 ending up in Iraq and ultimately killing U.S. troops. And I'm wondering
 today, sir, if you have a message to the regime in Tehran about these
 weapons ending up in Iraq and obviously doing harm to American citizens?
     THE PRESIDENT: One of the main reasons that I asked Ambassador Crocker
 to meet with Iranians inside Iraq was to send the message that there will
 be consequences for people transporting, delivering EFPs, highly
 sophisticated IEDs that kill Americans in Iraq. Prime Minister Maliki is
 visiting in Tehran today. His message, I'm confident will be, stabilize,
 don't destabilize. And the sending of weapons into Iraqis a destabilizing
 factor. That's why we -- yes, we've sent the message, Peter, and in that
 meeting.
     Holly.
     Q Sir, getting back to the credit crunch caused by defaults in sub-
 prime mortgages, should Fannie Mae and Freddie Mac be allowed to buy
 mortgages beyond their current limits, or play any additional role that
 could help revive mortgage finance?
     THE PRESIDENT: As you know, we put up a robust reform package for these
 two institutions, a reform package that will cause them to focus on their
 core mission, first and foremost; a reform package that says like other
 lending institutions, there ought to be regulatory oversight. And
 therefore, first things first when it comes to those two institutions.
 Congress needs to get them reformed, get them streamlined, get them
 focused, and then I will consider other options.
     Baker.
     Q Thank you, sir. A two-part question. The New Yorker reports that the
 Red Cross has found the interrogation program in the CIA detention
 facilities use interrogation techniques that were tantamount to torture.
 I'm wondering if you have read that report and what your reaction to it is?
 And the second part of the question is, more than a year ago you said that
 you wanted to close the detention facility at Guantanamo, and a year later
 nothing has actually happened in that regard. And the Vice President,
 Attorney General and Homeland Security Secretary are reported to be
 resisting such a move. I wonder if you could tell us who's really in charge
 on this issue, are you doing anything about it, do you expect Guantanamo to
 be open or closed when you leave office?
     THE PRESIDENT: I did say it should be a goal of the nation to shut down
 Guantanamo. I also made it clear that part of the delay was the reluctance
 of some nations to take back some of the people being held there. In other
 words, in order to make it work, we've got to have a place for these people
 to go. I don't know if you noticed a resolution of the Senate the other
 day, where all but three senators said we don't want these prisoners in the
 country. I don't know if it was a 97-3 vote, but it was something-to-three
 vote. In other words, part of the issue, Peter, is the practical issue of,
 what do we do with the people. And you say nothing has taken place. I
 strongly disagree with that. First of all, we are working with other
 nations to send folks back. Again, it's a fairly steep order. A lot of
 people don't want killers in their midst, and a lot of these people are
 killers.
     Secondly, of course, we want to make sure that when we do send them
 back, they're treated as humanely as possible. The other issue was whether
 or not we can get people to be tried. One of the things I'm anxious about,
 want to see happen, is that there to be trials. Courts have been involved
 with deciding how to do this, and Defense is trying to work out mechanisms
 to get the trials up and running. And the sooner we can get that up and
 running, the better it is, as far as I'm concerned. I don't want to make
 any predictions about whether Guantanamo will be available or not. I'm just
 telling you it's a very complicated subject.
     And I laid out an aspiration. Whether or not we can achieve that or
 not, we'll try to. But it is not as easy a subject as some may think on the
 surface. Again, I refer to you to the Senate vote. When asked whether or
 not you want to shut down Guantanamo, and therefore receive some of those
 prisoners in your home state, there didn't seem to be a lot of support for
 it. Like, three people said, it's okay by me, in the Senate.
     Your other question, sir?
 
     Q    Red Cross report?
 
     THE PRESIDENT:  I haven't seen it.  We don't torture.
     Yes, Jim.
     Q Thank you, Mr. President. I'd like to pivot off of what you were
 talking about earlier, with Prime Minister Maliki's visit to Iran. Reports
 out of Iran today, out of Iran, say that Prime Minister Maliki told
 President Ahmadinejad that he appreciated Iran's positive and constructive
 stance. The pictures from the visit are very warm. I'm wondering, do you
 and your Iraqi counterparts see eye-to-eye on Iran, and what kind of
 message do those images send to your allies in the region and Americans who
 are skeptical about the Prime Minister's role?
     THE PRESIDENT: Jim, I haven't seen the reports. Before I would like to
 comment upon how their meetings went, I would like to get a readout from
 our embassy, who of course will be in touch with the Prime Minister, and
 get his readout. And so it's a -- you're asking me to be a little
 speculative on the subject. I haven't seen the picture.
     Look, generally the way these things work is you try to be cordial to
 the person you're with, and so you don't want the picture to be kind of,
 you know, ducking it out. Okay, put up your dukes. That's an old boxing
 expression. (Laughter.)
     Q Once more, please?
     THE PRESIDENT: And so, I don't know, Jim. You've obviously followed
 this a lot -- you've seen the reports. I'm sure you're confident that what
 you've asked me is verifiable. I'm not surprised that there's a picture
 showing people smiling.
     Q However --
     THE PRESIDENT: Let me finish, please. And so it's a -- anyway, let me
 get the facts on what happened. Now if the signal is that Iran is
 constructive, I will have to have a heart-to-heart with my friend, the
 Prime Minister, because I don't believe they are constructive. I don't
 think he, in his heart of heart, thinks they're constructive, either. Now
 maybe he's hopeful in trying to get them to be constructive by laying out a
 positive picture. You're asking me to speculate.
     Should I be concerned of a picture -- should the American people be
 concerned about Iran? Yes, we ought to be very concerned about Iran.
 They're a destabilizing influence. They are a government that has -- its
 declared policy is very troubling, obviously, when they announce -- when
 Ahmadinejad has announced that the destruction of Israelis part of its
 foreign policy.
     That's something, obviously, we cannot live with. They have expressed
 their desire to be able to enrich uranium, which we believe is a step
 toward having a nuclear weapons program. That, in itself, coupled with
 their stated foreign policy, is very dangerous for world stability. They
 are funders of Hezbollah. Hezbollah is intent upon battling forces of
 moderation. It's a very troubling nation right now.
     Iran can do better. The government is isolating its people. The
 government has caused America and other nations, rational nations, to say,
 we will work together to do everything we can to deny you economic
 opportunity because of the decisions you are making. My message to the
 Iranian people is, you can do better than this current government; you
 don't have to be isolated; you don't have to be in a position where you
 can't realize your full economic potential. And the United States of
 America will continue to work with our friends and allies in the Security
 Council and elsewhere to put you in a position to deny you your rightful
 place in the world, not because of our intention, because of your
 government's intention.
     So it is a very -- it's a difficult issue, Jim. And the American people
 should be concerned about Iran. They should be concerned about Iran's
 activity in Iraq, and they ought to be concerned about Iran's activity
 around the world.
     Q In your previous conversations with Prime Minister Maliki, have you
 been confident that he shares your view on Iraq[sic]?
     THE PRESIDENT:  On Iran?
 
     Q    Yes.
     THE PRESIDENT: Yes. He knows that weaponry being smuggled into Iraq
 from Iran and placed in the hands of extremists over which the government
 has no control, all aimed at killing innocent life, is a destabilizing
 factor. He absolutely understands that.
     I don't know if you saw yesterday, there was a -- we talked to General
 Petraeus, or I talked to General Petraeus and Ambassador Crocker yesterday.
 I noticed in the papers today there was a description of a military
 operation that took place in Sadr City. The military operation in Sadr City
 was going after extremist elements, Shia extremist elements. And it was a
 very robust operation. Obviously, it -- well, I shouldn't say "obviously"
 -- it was done with the full understanding of the Maliki government.
     Now, I don't know whether this extremist element had been fueled by
 Iran, but I do know that Maliki is committed against extremist elements who
 are trying to create enough chaos and confusion that this young government
 and young democracy is not able to progress. So the first thing I looked
 for was commitment against the extremists. The second thing is does he
 understand with some extremist groups there is connections with Iran, and
 he does. And I'm confident.
     Now, is he trying to get Iran to play a more constructive role? I
 presume he is. But that doesn't -- what my question is -- well, what my
 message to him is, is that when we catch you playing a non-constructive
 role there will be a price to pay.
     Let's see here, Mark.
     Q Mr. President, are you considering a plan to cut corporate taxes? Do
 you believe America's corporations are not making enough money these days?
     THE PRESIDENT: Actually, we had an interesting discussion on this
 subject. And if you read carefully the penetrating report by the financial
 reporter -- kind of like semi-financial reporter -- (laughter) -- you'll
 find that it was -- I was talking about an idea that has begun to surface
 as a result of meetings being held at the Treasury Department.
     And the whole reason to look at corporate rates is to determine whether
 or not they make us less competitive in a global economy. And if so -- in
 other words, if the conclusion is, is that our tax structure makes it
 harder for businesses to compete, therefore making it harder for people to
 find work over time, then we need to address the competitive imbalance in
 our tax code.
     I also made it clear that we're at the very early stages of discussion
 and that in my own judgment, anything that would be submitted to Congress
 -- if submitted at all -- would have to be revenue neutral. And therefore,
 what we'd really be talking about is a simplification of a very complex tax
 code that might be able to lower rates and at the same time simplify the
 code, which is like shorthand for certain deductions would be taken away --
 in other words, certain tax preferences in the code.
     My view all along has been the more simple the code, the better --
 whether it be in the individual income tax side or the corporate tax side.
 However, I would readily concede to you this is a difficult issue because
 the reason there is tax preferences in the first place are there are
 powerful interests that have worked to get the preference in the code. And
 as I remarked to the distinguished group of writers I was talking to
 yesterday, it's much easier to get something in the code than get it out of
 the code.
     But I do think it's in the interests to constantly evaluate our
 competitive advantages and disadvantages. And what Hank Paulson told me was
 that there's a lot of folks who really believe the tax code creates a
 competitive disadvantage and therefore it's certainly worth looking at.
     Q On the subject of tax preferences, what about carried interest? Do
 you think that taxing those at capital gains rates is fair? A lot of people
 think it's not.
     THE PRESIDENT: First of all, I think, Mark, that what ends up happening
 is that in trying to deal with one particular aspect of partnerships is
 that you end up affecting all partnerships. And partnerships are an
 important vehicle to encourage investment and capital flows. They've been
 important vehicles to encourage the entrepreneurial spirit -- in other
 words, small businesses have been organized as limited partnerships. So
 we're very, very hesitant about trying to target one aspect of limited
 partnerships for fear of the spillover it'll have in affecting small
 business growth. So we don't support that.
     Ann.
     Q You've been clear about saying that you will veto overspending by
 Congress when they come back next month to do appropriations bills. You've
 also been clear you don't want to raise taxes. Can you do justice to the
 kind of programs the government needs for bridges, for housing, and also
 continue to spend as much as you do in the war in Iraq?
     THE PRESIDENT: One can meet priorities if they set priorities. The
 problem in Congress is they have trouble actually focusing on priorities.
 Appropriators take their title seriously and they all feel like they got to
 appropriate, which means there's a myriad of priorities. So the role of the
 President, it seems to me, is to help Congress focus on that which is
 important. We have a debate over that which is important, of course, but
 one thing that we shouldn't have a debate over is whether or not it's
 important to fund our troops in this war against radicals, extremists, the
 war on terror. And I think we'll be able to get that kind of cooperation. I
 would hope that they would get the defense bill to my desk as quickly as
 possible.
     Part of my concerns, of course, is that there are different sets of
 priorities in both bodies. And it seems like to me that the Congress needs
 to come together, solve their differences -- solve their differences first,
 and then bring them to the White House and see if we can find
 accommodation. I have proven in the past though, Ann, that one is able to
 set priorities -- keep taxes low, grow the economy and reduce the deficit.
 In other words, we have cut taxes, causing economic growth, which caused
 there to be this year alone $187 billion more tax dollars coming into the
 Treasury; the deficit is reduced to 1.5 percent of GDP, which on a 40-year
 historical average is very low, or is low, below the average. And we've
 proven that you can set priorities and meet obligations. And so the
 Congress needs to learn to do that itself.
     Q But you're confident that you can continue to sustain the kind of
 level of spending that you've invested in, in Iraq?
     THE PRESIDENT: I would certainly hope so, because when you say, sustain
 the level of spending, you're mainly talking about making sure our troops
 have what it takes to do the job we've asked them to do. I know there's a
 lot of members who don't agree with the decisions I've made; I would
 certainly hope they would agree, however, that once someone is in combat or
 in harm's way, that they get the full support of the federal government.
 That's exactly what their families expect and that's what the
 Commander-in-Chief expects, as well.
     Q Mr. President, I wanted to ask you about accountability. You're a big
 believer in it, you've talked about it with regard to the public schools.
 But given the performance of Iraqi leaders, given your decision to commute
 the sentence of Lewis Libby, you've also stood by the Attorney General
 recently -- there have been a lot of questions about your commitment to
 accountability. And I'm wondering if you could give the American people
 some clear examples of how you've held people accountable during your
 presidency?
     THE PRESIDENT: Lewis Libby was held accountable. He was declared guilty
 by a jury and he's paid a high price for it.
     Al Gonzales -- implicit in your questions is that Al Gonzales did
 something wrong. I haven't seen Congress say he's done anything wrong. As a
 matter of fact, I believe, David, we're watching a political exercise. I
 mean, this is a man who has testified, he's sent thousands of papers up
 there. There's no proof of wrong. Why would I hold somebody accountable who
 has done nothing wrong? I mean, frankly, I think that's a typical
 Washington, D.C. assumption -- not to be accusatory, I know you're a kind,
 open-minded fellow, but you suggested holding the Attorney General
 accountable for something he did wrong.
     And as a matter of fact, I would hope Congress would become more prone
 to deliver pieces of legislation that matter, as opposed to being the
 investigative body. I mean, there have been over 600 different hearings
 and, yet, they're struggling with getting appropriations bills to my desk.
     Q If I could follow -- sorry. Given the decision to commute the
 sentence of Libby and given the performance of Iraqi leaders, is it fair
 for people to ask questions about your commitment to accountability?
     THE PRESIDENT: I would hope people would say that I am deliberate in my
 decision-making; I think about all aspects of the decisions I make; and I'm
 a fair person.
     Back to Iraq, no question they haven't made as much progress as I would
 have hoped. But I also recognize how difficult the task is. And I repeat to
 you the fundamental question is, does it matter whether or not there is a
 self-governing entity that's an ally in the war on terror in Iraq? Does it
 matter? Does it matter to a guy living in Crawford, Texas? Does it matter
 to your children? As you know from these press conferences, I have come to
 the conclusion that it does matter. And it does matter because enemies that
 would like to do harm to the American people would be emboldened by
 failure.
     I recognize there's a debate here in America as to whether or not
 failure in Iraq would cause there to be more danger here in America. I
 strongly believe that's the case. It matters if the United States does not
 believe in the universality of freedom. It matters to the security of
 people here at home if we don't work to change the conditions that cause 19
 kids to be lured onto airplanes to come and murder our citizens.
     The first question one has to ask on Iraqis, is it worth it? I could
 not send a mother's child into combat if I did not believe it was necessary
 for our short-term and long-term security to succeed in Iraq. Once you come
 to the conclusion that it's worth it, then the question you must ask is,
 how difficult is the task of a young democracy emerging? Those who study
 the Articles of Confederation would recognize that there are difficult
 moments in young democracies emerging, particularly after, in this case,
 tyrannical rule.
     That's not to say that, Dave, we shouldn't be pushing hard for all
 opportunities for reconciliation. But for those of us who believe it's
 worth it, we'll see progress. For those who believe it's not worth it,
 there is no progress. And that's going to be the interesting debate. And
 what it's going to come down to is whether or not the United States should
 be in Iraq and in the region in a position to enable societies to begin to
 embrace liberty for the long-term. This is an ideological struggle.
     Now, I recognize some don't view it as an ideological struggle, but I
 firmly believe it is an ideological struggle. And I believe it's a struggle
 between the forces of moderation and reasonableness and good, and the
 forces of murder and intolerance. And what has made the stakes so high is
 that those forces of murder and intolerance have shown they have the
 capacity to murder innocent people in our own country. I put that in the
 context of accountability.
     In the case of Iraq, it's a lot more complicated than just the passage
 of four laws, even though I would hope they would get the four laws passed.
 But again, I repeat, the threshold question, does it matter, does it matter
 to our security here at home? And the answer is, absolutely, it does. It
 does. And then the second question really for a lot of Americans is, can we
 succeed? And in my mind, the answer to that is absolutely, not only we must
 succeed, we can succeed.
     Listen, thank you all for your time. I appreciate it.
     END                    11:18 A.M. EDT
 
 

SOURCE White House Press Office