    [Public Papers of the Presidents of the United States: George W. Bush (2008, Book II)]
    [July 15, 2008]
    [Pages 1016-1028]
    [From the U.S. Government Publishing Office www.gpo.gov]

    The President's News Conference
    July 15, 2008

        The President. Good morning. It's been a difficult time for many
    American families who are coping with declining housing values and high
    gasoline prices. This week, my administration took steps to help address
    both these challenges.
        To help address challenges in the housing and financial markets, we
    announced temporary steps to help stabilize them and increase confidence
    in Fannie Mae and Freddie Mac. These two enterprises play a central role
    in our housing finance system, so Treasury Paulson has worked with the Federal Reserve Chairman,
    Bernanke, so that the companies and the
    Government regulators--put the companies and the Government regulators
    on a plan to strengthen these enterprises. We must ensure they can
    continue providing access to mortgage credit during this time of
    financial stress.
        I appreciate the positive reaction this plan has received from many
    Members of Congress. I urge Members to move quickly to enact the plan in
    its entirety, along with the good oversight legislation that we have
    recommended for both Fannie Mae and Freddie Mac. This is a part of a--
    should be part of the housing package that is moving its way through the
    Congress. And I hope they move quickly. The newly proposed authorities
    will be temporary and used only if needed. And as we work to maintain
    the health of Fannie Mae and Freddie Mac, we'll work to ensure that they
    remain shareholder-owned companies.
        To help address the pressure on gasoline prices, my administration
    took action this week to clear the way for offshore exploration on the
    Outer Continental Shelf. It's what's called OCS. Congress has restricted
    access to key parts of the OCS since the early 1980s. I've called on
    Congress to remove the ban. There was also an executive prohibition on
    exploration--offshore exploration. So yesterday I issued a memorandum to
    lift this executive prohibition. With this action, the executive
    branch's restrictions have been removed, and this means that the only
    thing standing between the American people and these vast oil resources
    is action from the U.S. Congress. Bringing OCS resources on line is
    going to take time, which means that the need for congressional action
    is urgent. The sooner Congress lifts the ban, the sooner we can get
    these resources from the ocean floor to the refineries to the gas pump.
        Democratic leaders have been delaying action on offshore
    exploration, and now they have an opportunity to show that they finally
    heard the frustrations of the American people. They should match the
    action I have taken, repeal the congressional ban, and pass legislation
    to facilitate responsible offshore exploration.
        Congress needs also to pass bills to fund our Government in a
    fiscally responsible way. I was disappointed to learn the Democratic
    leaders in the House postponed committee consideration of the defense
    appropriations bill, and they did so yesterday. They failed to get a
    single one of the 12 annual appropriation bills to my desk. In fact,
    this is the latest that both the House and the Senate have failed to
    pass any of their annual spending bills in more than two decades.
        There are just 26 legislative days left before the end of the fiscal
    year. This means that to get their fundamental job done, Congress would
    have to pass a spending bill nearly every other day. This is not a
    record to be proud of, and I think the American people deserve better.
        Our citizens are rightly concerned about the difficulties in the
    housing markets and high gasoline prices and the failure of the
    Democratic Congress to address these and

    [[Page 1017]]

    other pressing issues. Yet despite the challenges we face, our economy
    has demonstrated remarkable resilience. While the unemployment rate has
    risen, it remains at 5.5 percent, which is still low by historical
    standards. And the economy continued to grow in the first quarter of
    this year. The growth is slower than we would have liked, but it was
    growth nonetheless.
        We saw the signs of a slowdown early and enacted a bipartisan
    economic stimulus package. We've now delivered more than $91 billion in
    tax relief to more than 112 million American households this year. It's
    going to take some time before we feel the full benefit of the stimulus
    package, but the early signs are encouraging. Retail sales were up in
    May and June and should contribute--and will contribute--to economic
    growth. In the months ahead, we expect more Americans to take advantage
    of these stimulus payments and inject new energy into our economy.
        The bottom line is this: We're going through a tough time, but our
    economy has continued growing, consumers are spending, businesses are
    investing, exports continue increasing, and American productivity
    remains strong. We can have confidence in the long-term foundation of
    our economy, and I believe we will come through this challenge stronger
    than ever before.
        And now I'll be glad to take some questions from you.
        Mr. Hunt [Terence Hunt, Associated Press].

    Fannie Mae and Freddie Mac Corporations/U.S. Financial Institutions

        Q. Mr. President, are America's banks in trouble? And does the
    rescue of Freddie Mae and Fannie Mac make more bailouts inevitable by
    sending the message that there are some institutions that are too big to
    fail and that it's okay to take risks?
        The President. First, let me talk about Fannie Mae and Freddie Mac.
    A lot of people in the country probably don't understand how important
    they are to the mortgage markets. And it's really important for people
    to have confidence in the mortgage markets and that there be stability
    in the mortgage markets. And that's why Secretary Paulson announced the plan this weekend, which says that he
    needs authorities from the Congress to come up with a line of credit for
    these institutions, if needed, and that he ought to have the authority
    to invest capital, if needed.
        And so the purpose was to send a clear signal that, one, we
    understand how important these institutions are to the mortgage markets,
    and two, to kind of calm nerves. The truth of the matter is, by laying
    this out, it is--makes it less likely we'll need to use this kind of
    authority to begin with, which, by the way, is temporary authority.
        As you--talked about banks. Now, if you're a commercial bank in
    America and your deposit--and you have a deposit in a commercial bank in
    America, your deposit is insured by the Federal Government up to
    $100,000. And so therefore, when you hear nervousness about your bank,
    you know, people start talking about how nervous they are about your
    bank's condition, the depositor must understand that the Federal
    Government, through the FDIC, stands behind the deposit up to $100,000.
    And therefore--which leads me to say that if you're a depositor, you're
    in--you're protected by the Federal Government.
        I happened to have witnessed a bank run in Midland, Texas, one time.
    I'll never forget the guy standing in the bank lobby saying, ``Your
    deposits are good. We got you insured. You don't have to worry about it
    if you got less than $100,000 in the bank.'' The problem was, people
    didn't hear. And there's a--became a nervousness. My hope is, is that
    people take a deep breath and realize that their deposits are protected
    by our Government.
        So these are two different instances, mortgage markets on the one
    hand, banking on the other.

    [[Page 1018]]

        Q. And banking, do you think the system is in trouble?
        The President. I think the system basically is sound, I truly do.
    And I understand there's a lot of nervousness. And--but the economy's
    growing, productivity is high, trade's up, people are working. It's not
    as good as we'd like, but--and to the extent that we find weakness,
    we'll move. That's one thing about this administration, we're not afraid
    of making tough decisions. And I thought the decision that Secretary
    Paulson recommended on Fannie Mae and
    Freddie Mac was the right decision.
        Matt [Matt Spetalnick, Reuters].

    National Economy/Legislative Agenda

        Q. Mr. President, you mentioned the latest retail sales, but they
    actually show a smaller boost than economists had expected from the
    Government rebate checks. Given the latest economic data, are you still
    insisting that the United States is not headed for a recession? And are
    you willing to consider a second stimulus package if needed?
        The President. Matt, I--all I can tell you is we grew in the first
    quarter. I can remember holding a press conference here and that same
    question came about, assuming that we weren't going to grow. But we
    showed growth. It's not the growth we'd like; we'd like stronger growth.
    And there are some things we can do. One is wait for the stimulus
    package to fully kick in and not raise taxes. If the Democratic leaders
    had their way in Congress, they would raise taxes, which would be the
    absolute wrong thing to do.
        Secondly, they can pass housing legislation that reforms FHA as well
    as Fannie Mae and Freddie Mac. And by the way, a part of that--as I
    mentioned in my opening statement, a part of that reform will be a
    strong regulator to help these institutions stay focused on the core
    mission, which is mortgages.
        They can pass energy legislation. I readily concede that, you know,
    it's not going to produce a barrel of oil tomorrow, but it is going to
    change the psychology that demand will constantly outstrip supply. As I
    said in my remarks, it's going to take a while to get these reserves on
    line. But it won't take a while to send a signal to the world that we're
    willing to use new technologies to find oil reserves here at home.
        And the other thing Congress can do is work on trade legislation.
    One of the positives in the economy right now is the fact that we're
    selling more goods overseas. And they need to open up markets to
    Colombia and South Korea and Panama.
        John [John Yang, NBC News].

    National Economy

        Q. Mr. President, just to follow up with Terry's question a little
    bit. You talked about the mortgage markets and banks. Are there other
    entities in the economy that are so crucial to the stability and
    confidence in the economy--I'm thinking particularly of General Motors,
    which today is cutting jobs, announcing they're going into the credit
    market to raise billions of dollars--are there other entities that are
    so crucial to stability that require Government action to show support
    for them?
        The President. Government action--if you're talking about bailing
    out--if your question is, should the Government bail out private
    enterprise? The answer is, no, it shouldn't. And by the way, the
    decisions on Fannie Mae and Freddie Mac--I hear some say bailout--I
    don't think it's a bailout. The shareholders still own the company.
    That's why I said we want this to continue to be a shareholder-owned
    company.
        In this case, there is a feeling that the Government will stand
    behind mortgages through these two entities. And therefore, we felt a
    special need to step up and say that we are going to provide, if needed,
    temporary assistance through either debt or capital.
        In terms of private enterprises, no, I don't think the Government
    ought to be

    [[Page 1019]]

    involved with bailing out companies. I think the Government ought to
    create the conditions so that companies can survive. And I've listed
    four. And one of the things I'm deeply troubled about is people who feel
    like it's okay to raise taxes during these times. And it would be a huge
    mistake to raise taxes right now.
        Plante [Bill Plante, CBS News].

    Fannie Mae and Freddie Mac Corporations

        Q. Mr. President, you just said twice that the--Fannie Mae and
    Freddie Mac should remain shareholder-owned companies. If that's the
    case, because of the implicit Government guarantee that they have, or
    that is understood--has been understood by the markets--their exposure
    is higher and their reserves are lower than any normal business's--
    should they be privatized altogether and be subject to normal business
    rules?
        The President. Well, the first step is to make sure that there's
    confidence and stability in the mortgage markets through the actions
    that we have taken. Secondly, we strongly believe there ought to be a
    regulator. That's something--this is the position I have been advocating
    for a long time. And the reason why is, it's going to be very important
    for these institutions to focus on their core mission, which is to
    provide refinancing for the mortgage industry. And hopefully, these
    measures will instill the confidence in the people. And we'll see how
    things go.
        Q. But they should still have that public guarantee then?
        The President. You know, there is an implicit guarantee, as you
    said. They ought to be focusing on the missions they're expected to do.
    We have advocated reform for a long period of time. But these need to
    remain private enterprises, and that's what our message is.

    Price of Gasoline/Oil Supply

        Q. Mr. President, in February, you were asked about Americans facing
    the prospect of four-dollar-a-gallon gasoline, and you said you hadn't
    heard of that at the time. Gas prices----
        The President. Heard of it now.
        Q. Gas prices are now approaching $5 a gallon in some parts of the
    country. Offshore oil exploration is obviously a long-term approach.
    What is the short-term advice for Americans? What can you do now to help
    them?
        The President. First of all, there is a psychology in the oil market
    that basically says, supplies are going to stay stagnant while demand
    rises. And that's reflected, somewhat, in the price of crude oil.
    Gasoline prices are reflected--the amount of a gasoline price at the
    pump is reflected in the price of crude oil. And therefore, it seems
    like it makes sense to me to say to the world that we're going to use
    new technologies to explore for oil and gas in the United States--
    offshore oil, ANWR, oil shale projects--to help change this psychology,
    to send a clear message that the supplies of oil will increase.
        Secondly, obviously, good conservation measures matter. I've been
    reading a lot about how the automobile companies are beginning to
    adjust--people, consumers are beginning to say, ``Wait a minute, I don't
    want a gas guzzler anymore; I want a smaller car.'' So the two need to
    go hand in hand. There is no immediate fix. This took us a while to get
    in this problem; there is no short-term solution. I think it was in the
    Rose Garden where I issued this brilliant statement: If I had a magic
    wand. But the President doesn't have a magic wand. You just can't say,
    low gas. It took us a while to get here, and we need to have a good
    strategy to get out of it.

    Strategic Petroleum Reserve

        Q. But you do have the strategic oil petroleum reserve. What about
    opening that?
        The President. The strategic oil petroleum reserve is for, you know,
    emergencies. But that doesn't address the fundamental

    [[Page 1020]]

    issue. And we need to address the fundamental issue--which I, frankly,
    have been talking about since I first became President--which was a
    combination of using technology to have alternative sources of energy,
    but at the same time, finding oil and gas here at home. And now is the
    time to get it done. I heard somebody say, ``Well, it's going to take 7
    years.'' Well, if we'd have done it 7 years ago, we'd have--be having a
    different conversation today. I'm not suggesting we'd have completely
    created--you know, changed the dynamics in the world, but it certainly
    would have been--we'd have been using more of our own oil and sending
    less money overseas.
        Yes, Ed [Ed Henry, Cable News Network].

    Former White House Press Secretary Scott B. McClellan/Military Operations in Iraq

        Q. Thank you, Mr. President. Good morning.
        The President. Thank you. It is a good morning.
        Q. It is.
        The President. Every day is a good morning when you get to serve the
    country.
        Q. Absolutely. And we know you prize loyalty, so I wonder whether
    you felt betrayed by Scott McClellan's assessment of the war in Iraq?
    And moving forward, since there have been positive signs on the ground
    in Iraq, Senator Obama is about to take a trip there. What would be your
    advice to him as he tries to assess the situation on the ground?
        The President. I have had no comment on--no comment now on Scott's
    book.
        Secondly, I would ask him to listen carefully to Ryan
    Crocker and General Petraeus. It's--there's a temptation to kind of get--let the
    politics at home get in the way with the considered judgment of the
    commanders. That's why I strongly rejected an artificial timetable of
    withdrawal. It's kind of like an arbitrary thing, you know--``We will
    decide in the Halls of Congress how to conduct our affairs in Iraq based
    upon polls and politics, and we're going to impose this on people''--as
    opposed to listening to our commanders and our diplomats, and listening
    to the Iraqis, for that matter. The Iraqis have invited us to be there.
    But they share a goal with us, which is to get our combat troops out, as
    conditions permit. Matter of fact, that's what we're doing. Return on
    success has been the strategy of this administration, and our troops are
    coming home, but based upon success.
        And so I would ask whoever goes there--whatever elected official
    goes there, to listen carefully to what is taking place and understand
    that the best way to go forward is to listen to the parties who are
    actually on the ground. And that's hard to do. I understand for some in
    Washington there's a lot of pressure. You got these groups out there--
    MoveOn.org, you know--banging away on these candidates, and it's hard to
    kind of divorce yourself from the politics.
        And so I'm glad all the--a lot of these elected officials are going
    over there, because they'll get an interesting insight, something that
    you don't get from just reading your wonderful newspapers or listening
    to your TV shows.
        John [John McKinnon, Wall Street Journal].
        Q. Mr. President----
        The President. Don't you call them TV shows? Newscasts, yes.

    Price of Gasoline/Oil Supply/Alternative Fuel Sources

        Q. ----following up on the question about oil, in the past, when oil
    prices have gone up a lot, they've wound up going down a lot afterward.
    But I wonder if you're able to say that oil prices in the future are
    going to come down a lot.
        The President. I can't predict it, John. I mean, look, my attitude
    is, is that unless there is a focused effort--in the short term--unless
    there's a focused effort to

    [[Page 1021]]

    bring more supplies to market, there's going to be a lot of upward
    pressure on price. We got 85 million barrels a day and--of demand and 86
    million barrels of production. And it's just--it's too narrow a spread,
    it seems like to me.
        Now, I'm encouraged by, you know, the Caspian Basin exploration. I'm
    encouraged that the Saudis are reinvesting a lot into their older
    fields. And remember, some of these oil fields get on the decline rate,
    which requires a lot of investment to keep their production up to
    previous levels. So one thing we look at is how much money is being
    reinvested in some of those fields. I'm encouraged by that.
        I am discouraged by the fact that some nations subsidize the
    purchases of product, like gasoline, which, therefore, means that demand
    may not be causing the market to adjust as rapidly as we'd like. I was
    heartened by the fact that the Chinese the other day announced that
    they're going to start reducing some of their subsidies--which all of a
    sudden, you may have some, you know, demand-driven changes in the
    overall balance.
        But, look, if we conserve and find more energy, we will done--have
    done our part to address, you know, the global market right now. And the
    other thing is that this is just a transition period. I mean, all of us
    want to get away from reliance upon hydrocarbons, but it's not going to
    happen overnight. One of these days, people are going to be using
    battery technologies in their cars. You've heard me say this a lot. And
    I'm confident it's going to happen. And the throwaway line, of course,
    is that your car won't have to look like a golf cart.
        But the question then becomes, where are we going to get
    electricity? And that's why I'm a big believer in nuclear power to be
    able to make us less dependent on oil and better stewards of the
    environment. But there is a transition period during the hydrocarbon
    era, and it hasn't ended yet, as our people now know. Gasoline prices
    are high.
        I don't--again, I don't want to be a told-you-so, but if you go back
    and look at the strategy we put out early on in this administration, we
    understood what was coming. We knew the markets were going to be tight.
    And therefore, we called for additional exploration at home, plus what
    has been happening, which is an acceleration of new technologies,
    including ethanol technologies, to get us less dependent on crude oil
    from overseas.
        Let's see here, Steven Lee. Steven Lee [Steven Lee Myers, New York
    Times].

    Guantanamo Bay Detainees

        Q. Mr. President, thank you. I wonder in light of the Supreme
    Court's decision if you could tell us what you plan to do with
    Guantanamo?
        The President. Steven Lee, we're still analyzing--``we'' being the
    Justice Department--are still analyzing the effects of the decision,
    which, as you know, I disagreed with. And secondly, we're working with
    Members of Congress on a way forward. This is a very complicated case;
    it complicated the situation in Guantanamo.
        My view all along has been, either send them back home or give them
    a chance to have a day in court. I still believe that makes sense. We're
    just trying to figure out how to do so in light of the Supreme Court
    ruling.
        Eggen [Dan Eggen, Washington Post].

    Zimbabwe

        Q. Mr. President, last week, China joined Russia in blocking the
    sanctions--Mugabe regime in Zimbabwe. I can't imagine this pleased you
    very much. Do you have any reaction to, particularly, the Chinese move?
    And also, where do you go from here to try to make sure that the regime
    doesn't----
        The President. Yes. No, you read my reaction right; I was
    displeased. We spent a lot of time on this  subject  at  the  G-8, and
    there was great concern by most of the nations there--well, the G-8
    nations

    [[Page 1022]]

    that were there--about what was taking place in Zimbabwe. And it's
    frankly unacceptable, and it should be unacceptable to a lot of folks.
        And so we discussed the need for, you know, U.N. Security Council
    resolutions. And I was disappointed that the Russians vetoed. I didn't--
    I hadn't spent any time with the Chinese leader
    talking about--specifically talking about any Security Council
    resolutions; I'd had with President Medvedev.
        And so I think the thing we need to do now is for us to analyze
    whether or not we can have some more bilateral sanctions on regime
    leaders. After all, these sanctions were not against the Zimbabwe
    people; these were against the people that--in the Mugabe regime that made the decisions it made. We got the
    Treasury Department and State Department--are now working on a potential
    U.S. action.
        Bret [Bret Baier, FOX News].

    Military Operations in Iraq and Afghanistan

        Q. Thank you, Mr. President. I have a two-part question on the war,
    in light of increasing violence in Afghanistan. Do you believe current
    U.S. troop levels in Iraq are hindering efforts to put more U.S. troops
    into Afghanistan?
        And secondly, this morning in his prepared remarks, Senator Obama
    will say this: ``By any measure, our single-minded, open-ended focus on
    Iraq is not a sound strategy for keeping America safe. In fact, as
    should have been apparent to President Bush and Senator McCain, the
    central front in the war on terror is not Iraq, and it never was.''
        The President. Well, as you know, I'm loath to respond to a
    particular Presidential candidate, and so I will try not to. My view is,
    is that the war on terror is being fought out on two simultaneous fronts
    that are noted--noticeable to the American people and on other fronts
    that aren't. And so the first question that anybody running for
    President gets: Is this a war? Or is this like law enforcement? Is it
    a--does this require full use of U.S. assets in order to protect the
    American people? As you know, I made the decision that it does require
    those assets.
        Secondly, that these are two very important fronts, both of which
    are important to the future of the country. And therefore, we got to
    succeed in both.
        Thirdly, one front right now is going better than the other, and
    that's Iraq, where we're succeeding, and our troops are coming home
    based upon success. And Afghanistan is a tough fight. It's a tough fight
    because, one, this is a state that had been just ravaged by previous
    wars, and there wasn't a lot of central Government outreach to the
    people.
        Secondly, there is a tough enemy, and they're brutal. And they kill
    at the drop of a hat in order to affect behavior. It's a little bit
    reminiscent of what was taking place in Iraq a couple of years ago,
    where the enemy knows that they can affect the mentality of the American
    people if they just continue to kill innocent folks. And they have no
    disregard [regard]* for human life.
        And it's really important we succeed there as well as in Iraq. We do
    not want the enemy to have safe haven. Of course--unless, of course,
    your attitude is, this isn't a war. So then if that's the case, it
    wouldn't matter whether we succeed or not.
    ---------------------------------------------------------------------------
        *White House correction.
    ---------------------------------------------------------------------------
        But it is a two-front war. And I say there's other fronts, but
    there's other fronts where we're taking covert actions, for example.
        Go ahead.

    Troop Levels in Afghanistan/War on Terror

        Q. Should Americans expect a troop surge in Afghanistan?
        The President. We are surging troops in Afghanistan this way and
    committed----
        Q. Even more?

    [[Page 1023]]

        The President. Well, we'll analyze the situation, of course, make a
    determination based upon the conditions on the ground. But we did surge
    troops. We surged troops; France surged troops. I said in Bucharest,
    we'll add more troops. And then, of course, we got to make sure the
    strategy works--you know, have a counterinsurgency strategy that not
    only provides security, but also provides economic followup after the
    security has been enhanced.
        The question really facing the country is, will we have the patience
    and the determination to succeed in these very difficult theaters? And I
    understand exhaustion, and I understand people getting tired. And--but I
    would hope that whoever follows me understands that we're at war, and
    now is not the time to give up in the struggle against this enemy. And
    that while there hasn't been an attack on the homeland, that's not to
    say people don't want to attack us. And safe havens become very
    dangerous for the American people. And we've got to deny safe haven and,
    at the same time, win the struggle by advancing democracy.
        This is an ideological struggle we're involved in. These people kill
    for a reason. They want us to leave. They want us to, you know, not push
    back. They don't want democracy to succeed. And yet, if given a chance,
    democracy will succeed. And so these two theaters are the big challenge
    of the time, and the war itself is the challenge.
        Yes, Roger [Roger Runningen, Bloomberg News].

    National Economy/Legislative Agenda

        Q. Thank you, sir. I want to follow up on Matt's question about a
    second economic stimulus----
        The President. On whose question?
        Q. Matt's question about a second economic stimulus package.
        The President. Brilliant question, Matt. Now they're going to start
    quoting you, you know. Congratulations. [Laughter]
        Q. Maybe I missed it, but did you rule out one or----
        The President. I said we ought to see how this one--first one works.
    Let it run its course.
        Q. Is it too late to consider a second one in your administration?
        The President. You know, we--we're always openminded to things, but
    I--let's see how this stimulus package works, and let us deal with the
    housing market with good piece of housing legislation and the energy
    issue with good energy legislation and the trade issue with good trade
    legislation.
        People say, ``Aww, man, you're running out of time; nothing is going
    to happen.'' I'll remind people what did happen: We got a good troop
    funding bill with no strings; got a GI bill; we got FISA. What can we
    get done? We can get good housing legislation done. We can get good
    energy legislation done. We can get trade bills done. I mean, there's
    plenty of time to get action with the United States Congress, and they
    need to move quickly. We can get judges approved.
        And so I'm--we'll see what happens up there. I'm confident that if
    they put their mind to it, we can get good legislation.
        Let's see here, yes, Mark [Mark Smith, Associated Press].

    Price of Gasoline/Energy Consumption

        Q. Mr. President, understanding what you say about energy supplies
    being tight and the debate over energy, which has gone on for years and
    will continue long through the campaign and into the next
    administration, one thing nobody debates is that if Americans use less
    energy----
        The President. Correct.
        Q. ----the supply/demand equation would improve. Why have you not
    sort of called on Americans to drive less and to turn down the
    thermostat?
        The President. They're smart enough to figure out whether they're
    going to drive less or not. I mean, you know, it's interesting what the
    price of gasoline has

    [[Page 1024]]

    done--is it caused people to drive less. That's why they want smaller
    cars, they want to conserve. But the consumer is plenty bright, Mark.
    The marketplace works.
        Secondly, we have worked with Congress to change CAFE standards and
    had a mandatory alternative fuel requirement.
        So no question about it, what you just said is right. One way to
    correct the imbalance is to save, is to conserve. And as you noticed in
    my statement yesterday, I talked about good conservation. And people can
    figure out whether they need to drive more or less; they can balance
    their own checkbooks.
        Q. But you don't see the need to ask--you don't think--see the value
    in your calling for a campaign----
        The President. I think people ought to conserve and be wise about
    how they use gasoline and energy. Absolutely. And there's some easy
    steps people can take. You know, if they're not in their home, they
    don't keep their air-conditioning running. There's a lot of things
    people can do.
        But my point to you, Mark, is that, you know, it's a little
    presumptuous on my part to dictate to consumers how they live their
    lives. The American people are plenty capable and plenty smart people,
    and they'll make adjustments to their own pocketbooks. That's why I was
    so much in favor of letting them keep more of their own money. You know?
    It's a philosophical difference: Should the Government spend their
    money, or should they spend their own money? And I've got faith in the
    American people.
        And as much as I regret that the gasoline prices are high--and they
    are--I also understand that people are going to make adjustments to meet
    their own needs. And I suspect you'll see, in the whole, Americans using
    less gasoline. I bet that's going to happen. And in the meantime,
    technologies will be coming on the market that will enable them to drive
    and save money, compared to the automobiles they're using before. And as
    you notice, the automobile industry is beginning to adjust here at home
    as consumer demand changes. And the great thing about our system, it is
    the consumer that drives our system; it's the individual Americans and
    their collection that end up driving the economy.
        Yes, Ann [Ann Compton, ABC News].

    Iraq

        Q. Could I follow up on a couple of points, please?
        The President. Okay.
        Q. You never mention oil companies. Are you confident that American
    oil producers are tapping all of the sources they have out there,
    including offshore? And on Iraq, will you sign an interim agreement with
    Prime Minister Maliki on American operations in Iraq, leaving it to your
    successor to do a more permanent agreement?
        The President. There are--let me start with Iraq. We're in the
    process of working on a strategic framework agreement with the Iraqi
    Government that will talk about cooperation on a variety of fronts:
    diplomacy, economics, justice. Part of that agreement is a security
    agreement, and I believe that, you know, they want to have an
    aspirational goal as to how quickly the transition to what we have
    called overwatch takes place. Overwatch will mean that the U.S. will be
    in a training mission, logistical support as well as special ops.
        In order for our troops to be in a foreign country, there must be an
    understanding with the Government. There must be authorities to operate
    as well as protections for our troops. We're in the process of
    negotiating that as well. And it needs to be done prior to the year
    because--unless, of course, the U.N. mandate is extended. And so there
    are two aspects to the agreement. This is people seem to conflate the
    two--and we're working both of them simultaneously.
        Let's see here.

    [[Page 1025]]

    Oil Supply

        Q. American oil producers?
        The President. Oh, what was the question again on that?
        Q. Well, you talked about offshore----
        The President. What about them? Do I think they're investing capital
    to find more reserves with the price at $140 a barrel? Absolutely. Take
    an offshore exploration company--first of all, it costs a lot of money
    to buy the lease, so they tie up capital. Secondly, it takes a lot of
    money to do the geophysics, to determine what the structure may or may
    not look like. That ties up capital. Then they put the rig out there.
    Now, first of all, in a Federal offshore lease, if you're not exploring
    within a set period of time, you lose your bonus; you lose the amount of
    money that you paid to get the lease in the first place.
        And once you explore--your first exploratory, if you happen to find
    oil or gas, it is--you'll find yourself in a position where a lot of
    capital is tied up. And it becomes in your interest, your economic
    interest, to continue to explore so as to reduce the capital costs of
    the project on a per-barrel basis. And so I think they're exploring. And
    hopefully, a lot of people continue to explore so that the supply of oil
    worldwide increases relative to demand.
        Now, people say, ``What about the speculators?'' I think you can't
    help but notice there is some volatility in price in the marketplace,
    which, obviously, there are some people in the--buying and selling on a
    daily basis. On the other hand, the fundamentals are what's really
    driving the long-term price of oil, and that is, demand for oil has
    increased, and supply has not kept up with it. And so part of our
    strategy in our country has got to be to say, okay, here are some
    suspected reserves, and that we ought to go after them in an
    environmentally friendly way.
        A buddy of mine said, ``Well, what about the reefs?'' So I'm
    concerned about the reefs. I'm a fisherman; I like to fish. Reefs are
    important for fisheries. But the technology is such that you can protect
    the reefs. You know? You don't have to drill on top of a reef. You can
    drill away from a reef and then have a horizontal hole to help you
    explore a reservoir.
        It's like in Alaska, you know. In the old days, you would have had
    to have--if you ever go out to west Texas, you'll see--there's like a
    rig every 20 acres, depending upon the formation. In Alaska, you can
    have one pad with a lot of horizontal drilling, which enables you to
    exploit the resources in a way that doesn't damage the environment.
    These are new technologies that have come to be, and yet we've got an
    old energy policy that hasn't recognized how the industry has changed.
    And now is the time to get people to recognize how the industry has
    changed.
        April [April Ryan, American Urban Radio Networks].

    Sudan

        Q. Mr. President----
        The President. Yes.
        Q. Two questions; one on energy and another on Sudan.
        The President. On what?
        Q. Not energy, I'm sorry, the economy. When, in your guesstimation,
    will this country see a turnaround as relates to the softening economy?
    When will it become strong again?
        And also, on the Sudan, the Sudanese Government is looking to the
    United Nations for help in this situation with the ICC. And this is a
    body that they have ignored before. What are your thoughts about what's
    happening with the Sudan?
        The President. Well, we're not a member of the ICC, so we'll see how
    that plays out.
        My thought on Sudan is, is that the United Nations needs to work
    with this current Government to get those troops in to help save lives--
    AU hybrid force. I talked to Williamson, who's the Special

    [[Page 1026]]

    Envoy to Sudan, yesterday. There's two aspects to the Sudanese issue.
    One is the north-south agreement, and he was talking about the need to
    make sure that there is a clear understanding about how oil revenues
    will be shared between north and south in a certain part of the border
    region there, so as to make sure that there is--that this agreement that
    Ambassador Danforth negotiated stays intact
    and stays full.
        And the other aspect, obviously, is Darfur. And that's a very, very
    complex issue. We're trying to make--we're trying to work with the rebel
    groups so that they speak more with one voice. We're trying to work with
    Bashir to make sure he
    understands that there will be continued sanctions if he doesn't move
    forward. We're trying to help get this--AU troops in Africa--throughout
    Africa into Sudan. And we're working with the French on the issue of
    Chad.
        And it's a complex situation, and sadly enough, innocent people are
    being displaced and are losing their life. And it's very difficult and
    unacceptable. And as you know, I made the decision not to unilaterally
    send troops. Once that decision was made, then we had to reply upon the
    United Nations. And I brought this issue up at the G-8 with our partners
    there. There's the same sense of consternation and the same sense of
    frustration that things haven't moved quicker. I talked to Ban Ki-
    moon about the issue, and he told me--I think he
    told me that by the end of this year, a full complement of AU troops
    will be there. Then the question is, will the Government help expedite
    the delivery of humanitarian aid?
        Anyway, the other question?

    National Economy/Legislative Agenda

        Q. Yes, the other question----
        The President. When will the economy turn around?
        Q. Yes.
        The President. I'm not an economist, but I do believe that we're
    growing. And I can remember this press conference here where people
    yelling ``recession this,'' ``recession that''--as if you're economists.
    And I'm an optimist. I believe there's a lot of positive things for our
    economy. But I will tell you, it's not growing the way it should, and
    I'm sorry people are paying as high gasoline prices as they are. And all
    I know is, good policy will help expedite a--will strengthen our
    economy.
        Q. Do you think it will change before you leave office?
        The President. I certainly hope it changes tomorrow. But it's--I'm
    also realistic to know things don't change on a dime. But nevertheless,
    the economy is growing. There's obviously financial uncertainty. We've
    talked about the decisions on the GSEs here. People need to know that if
    they've got a deposit in a commercial bank, the Government will make
    good up to $100,000 worth of their deposit. There's no question, it's a
    time of uncertainty. There's a lot of events taking place at the same
    time. But we can pass some good law to help expedite the recovery.
        One such law is a good housing--piece of housing legislation. The
    Congress needs to get moving on it. Another such law is to send a signal
    that we're willing to explore for oil here at home. I fully understand
    that this is a transition period away from hydrocarbons, but we ought to
    be wise about how we use our own resources. I think it would be a
    powerful signal if we announce that we're going to really get after it
    when it comes to oil shale. There's enormous reserves in the western
    States. And I think if the world saw that we're willing to put a
    focused, concerted effort on using new technologies to bring those
    reserves to bear, which would then relieve some pressure on gasoline
    prices, it would have an impact.
        The other thing is, is that--I'm sure you know this, April, but we
    haven't built a refinery--a new refinery in the United

    [[Page 1027]]

    States since the early seventies. It makes no sense. And yet you try to
    get one permitted, it is unbelievably difficult to do. People aren't
    willing to risk capital if they're deeply concerned about how their
    capital is going to be tied up in lawsuits or regulations. And we import
    a lot of gasoline, refined product, from overseas.
        So there's some things we can do to send signals that it's important
    that we can get the economy--take advantage of the positive aspects and
    get it moving stronger again.
        The other thing is trade. It is--I don't understand the decision on
    the Colombia free trade market--free trade agreement. The Congress has
    given preferential treatment to goods coming out of Colombia through the
    Andean Trade Preference Act. In other words, Colombia businesses can
    sell into our country relatively duty free. And yet we don't have the
    same--we don't get the same treatment. Now, why does that make sense? It
    doesn't.
        You know, trade--our trade or exports have helped keep the economy
    growing, April, as paltry as it may be. Doesn't it make sense for us to
    continue to open up further opportunities to sell goods? I think it
    does. I do not understand why it's okay for Colombia to be able to sell
    into our country close to duty free, and we don't have the same
    advantage. And secondly, turning our back on somebody like Uribe makes no sense at all. He is a courageous
    fighter against terrorists. And yet our Congress won't even bring up a
    free trade agreement with Colombia.
        Anyway, it's--politics is just choking good sense. And the other
    thing is, is that once we get moving on Colombia, we need to get moving
    on Panama and South Korea. It's in our country's interest we do that.
        Olivier. Olivier [Olivier Knox, Agence France-Presse].

    Afghanistan/Pakistan

        Q. Yes, sir. A follow-up on----
        White House Press Secretary Dana Perino.
    They look alike--[laughter].
        Q. Following up on Bret Baier's question----
        White House Press Secretary Perino. ----
    Olivier. [Laughter]
        The President. I know who Olivier is. I was just winking at Myers,
    you know. [Laughter]
        White House Press Secretary Perino. Oh, I
    see.
        The President. Yes, Olivier.
        Q. Thank you, sir. Following up on Bret Baier's question----
        The President. What was the question, Olivier? I'm 62, I'm having
    trouble remembering a lot of things.
        Q. It was about Afghanistan, sir.
        The President. Good, yes.
        Q. Okay. Afghan President----
        The President. I remember it now.
        Q. Afghan President Hamid Karzai has blamed Pakistan's intelligence
    services for a recent terrorist attack on his country, and recent
    reporting suggests that Al Qaida has regrouped to pre-September 11th
    levels along the border between Pakistan and Afghanistan. Is President
    Karzai correct? And do you think the new President--the new Government
    in Pakistan is willing and is able to fight the terrorists?
        The President. First of all, we'll investigate his charge and we'll
    work with his service to get to the bottom of his allegation. No
    question, however, that some extremists are coming out of parts of
    Pakistan into Afghanistan. And that's troubling to us, it's troubling to
    Afghanistan, and it should be troubling to Pakistan. We share a common
    enemy. That would be extremists who use violence to either disrupt
    democracy or prevent democracy from taking hold.
        Al Qaida is--they're there. We have hurt Al Qaida hard--hit them
    hard and hurt them in--around the world, including in Pakistan. And we
    will continue to keep the pressure on Al Qaida with our Pakistan
    friends.

    [[Page 1028]]

        I certainly hope that the Government understands the dangers of
    extremists moving in their country. I think they do. As a matter of
    fact, we'll have an opportunity to explore that further on Monday with
    the Prime Minister of Pakistan.
    Pakistan is an ally; Pakistan is a friend. And I repeat: All three
    countries--United States, Pakistan, and Afghanistan--share a common
    enemy.
        I remember very well the meeting I had at the White House with
    President Musharraf and President
    Karzai. And we talked about the need for cross-
    border cooperation to prevent dangerous elements from training and
    coming into Afghanistan, and then, by the way, returning home with a
    skill level that could be used against the Government.
        And there was some hopeful progress made. Obviously, it's still a
    tough fight there. And we were heartened by the Provincial elections in
    that part of the world. We will continue to work to help the Government,
    on the one hand, deal with extremists, and on the other hand, have a
    counter--effective counterinsurgency strategy that uses aid to foster
    economic development. And it's a challenge. And the three of us working
    together can deal with the challenge a lot better than if we don't work
    together.
        Okay, I've enjoyed it. Thank you very much for your time. Appreciate
    it.
        Q. Come back soon.
        The President. Yes. I will.

    Note: The President's news conference began at 10:22 a.m. in the James
    S. Brady Press Briefing Room at the White House. In his remarks, he
    referred to Democratic Presidential candidate Barack Obama; Gen. David
    H. Petraeus, USA, commanding general, Multi-National Force--Iraq;
    President Hu Jintao of China; President President Dmitry A. Medvedev of
    Russia; President Robert Mugabe of Zimbabwe; U.S. Special Envoy to Sudan
    Richard S. Williamson and former U.S. Special Envoy to Sudan John C.
    Danforth; President Umar Hassan Ahmad al-Bashir of Sudan; Secretary-
    General Ban Ki-moon of the United Nations; President Alvaro Uribe Velez
    of Colombia; President Hamid Karzai of Afghanistan; and Prime Minister
    Syed Yousuf Raza Gilani and President Pervez Musharraf of Pakistan.
    Reporters referred to Republican Presidential candidate John McCain; and
    Prime Minister Nuri al-Maliki of Iraq.