[Weekly Compilation of Presidential Documents Volume 40, Number 52 (Monday, December 27, 2004)]
[Pages 2995-3007]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
The President's News Conference

December 20, 2004

    The President. Good morning, and happy holidays to you all. I 
thought I'd come and answer some of your questions. Before I do so, I've 
got a statement I'd like to make.
    We're nearing the end of a year where--of substantial progress at 
home and here--and abroad. In 2004, the United States grew in 
prosperity, enhanced our security, and served the cause of freedom and 
peace. Our duties continue in the new year. I'm optimistic about 
achieving results. America's economy is on solid footing, growth is 
strong,

[[Page 2996]]

and the Nation's entrepreneurs have generated more than 2 million jobs 
in this year alone.
    There's more we must do to keep this economy flexible, innovative, 
and competitive in the world. In a time of change, we must reform 
systems that were created to meet the needs of another era. Soon I will 
appoint a citizens panel to recommend ways we can transform the outdated 
Tax Code. I'll work with the new Congress to make health care more 
accessible and affordable, to reform the legal system, to raise 
standards of achievement in public schools, especially our high schools, 
and to fix the Social Security system for our children and our 
grandchildren.
    Early in the year, I will also submit a budget that fits the times. 
We will provide every tool and resource for our military. We'll protect 
the homeland, and we'll meet other priorities of the Government. My 
budget will maintain strict discipline in the spending of tax dollars 
and keep our commitment to cutting the deficit in half over 5 years.
    All of these goals require the energy and dedication of members of 
both political parties. Working in a spirit of bipartisanship, we will 
build the foundation of a stronger, more prosperous country. We'll meet 
our obligations to future generations as we do so.
    Our duties to future generations include a sustained effort to 
protect our country against new dangers. Last week, I signed legislation 
that continues the essential reorganization of our Government by 
improving the Nation's intelligence operations. Because we acted, our 
vast intelligence enterprise will be more unified, coordinated, and 
effective than ever before, and the American people will be more secure 
as a result.
    Our country is also safer because of the historic changes that have 
come around the world in places like Afghanistan. This year brought the 
first Presidential election in the 5,000-year history of that country. 
And the Government of President Hamid Karzai is a steadfast ally in the 
war on terror. President Karzai and the Afghan people can be certain of 
America's continued friendship and America's support as they build a 
secure and hopeful democracy.
    In Iraq, a people that endured decades of oppression are also 
preparing to choose their own leaders. Next month, Iraqis will go to the 
polls and express their will in free elections. Preparations are 
underway for an energetic campaign, and the participation is wide and 
varied. More than 80 parties and coalitions have been formed, and more 
than 7,000 candidates have registered for the elections. When Iraqis 
vote on January the 30th, they will elect 275 Members to a transitional 
National Assembly as well as local legislatures throughout the country.
    The new National Assembly will be responsible for drafting a 
constitution for a free Iraq. By next October, the constitution will be 
submitted to the people for ratification. If it is approved, then, by 
December, the voters of Iraq will elect a fully democratic 
constitutional government. My point is, the elections in January are 
just the beginning of a process, and it's important for the American 
people to understand that.
    As the Iraqi people take these important steps on the path to 
democracy, the enemies of freedom know exactly what is at stake. They 
know that a democratic Iraq will be a decisive blow to their ambitions, 
because free people will never choose to live in tyranny. And so the 
terrorists will attempt to delay the elections, to intimidate people in 
their country, to disrupt the democratic process in any way they can. No 
one can predict every turn in the months ahead, and I certainly don't 
expect the process to be trouble-free. Yet, I am confident of the 
result. I'm confident the terrorists will fail, the elections will go 
forward, and Iraq will be a democracy that reflects the values and 
traditions of its people.
    America and our coalition have a strategy in place to aid the rise 
of a stable democracy in Iraq. To help the Iraqi Government provide 
security during the election period, we will increase U.S. troop 
strength. Coalition forces will continue hunting the terrorists and the 
insurgents. We will continue training Iraqi security forces so the Iraqi 
people can eventually take responsibility for their own security.
    We have a vital interest in the success of a free Iraq. You see, 
free societies do not export terror. Free governments respect the

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aspirations of their citizens and serve their hopes for a better life. 
Free nations are peaceful nations. And free nations in the heart of the 
Middle East will show what is possible to others who want to live in a 
free society.
    In Iraq and elsewhere, we've asked a great deal of the men and women 
of our Armed Forces. Especially during this holiday season, those on 
duty far from home will be in our thoughts and our prayers. Our people 
in uniform and our military families are making many sacrifices for our 
country. They have the gratitude of our whole country.
    Now I will be glad to answer some questions. Hunt [Terence Hunt, 
Associated Press].

Russia-U.S. Relations

    Q. Thank you, Mr. President. A month ago in Chile, you asked 
Vladimir Putin to explain why he has taken actions widely seen as a move 
away from democracy. What do you think Mr. Putin's intentions are, and 
do you think that Russia's behavior has chilled relations with the 
United States?
    The President. As you know, Vladimir Putin and I have got a good 
personal relationship, starting with our meeting in Slovenia. I intend 
to keep it that way. It's important for Russia and the United States to 
have the kind of relationship where, if we disagree with decisions, we 
can do so in a friendly and positive way.
    When Vladimir made the decision, for example, on the--whether to 
elect Governors or appoint Governors, I issued a statement that said in 
a free society, in a society based upon Western values, we believe in 
the proper balance of power. I think he took that on and absorbed that 
in the spirit in which it was offered, the spirit of two people who've 
grown to appreciate each other and respect each other. I'll continue to 
work with him in a new term. Obviously, we have some disagreements. He 
probably has disagreements over some of the decisions I've made. 
Clearly, one such decision was in Iraq. But this is a vital and 
important relationship.
    And it's a relationship where it's complicated--it's complex, rather 
than complicated. It's complex because we have joint efforts when it 
comes to sharing intelligence to fight terrorism. We've got work to do 
to secure nuclear materials. I look forward to working with the Russians 
to continue to expand cooperation. I think one of the things we need to 
do is to give the Russians equal access to our sites, our nuclear 
storage sites, to see what works and what doesn't work, to build 
confidence between our two Governments.
    Obviously, there's a lot of trade that's taking place between Russia 
and the West and the United States. And that trade relationship is an 
important relationship. I told Vladimir that we would work in a new term 
for--to see if Russia could then be admitted to the WTO. I think that 
would be a positive step for relations between our two countries. And 
I'll continue to express my belief that balanced government, the sharing 
of power amongst government will lead to a--will lead to stability in 
Russia. And the relationship is an important relationship, and I would 
call the relationship a good relationship.

Defense Secretary Rumsfeld

    Q. Thank you, Mr. President. Several Republican lawmakers recently 
have criticized Secretary Rumsfeld. What does he need to do to rebuild 
their trust?
    The President. Well, first of all, when I asked the Secretary to 
stay on as Secretary of Defense, I was very pleased when he said yes. 
And I asked him to stay on because I understand the nature of the job of 
the Secretary of Defense, and I believe he's doing a really fine job.
    The Secretary of Defense is a complex job. It's complex in times of 
peace, and it's complex even more so in times of war. And the Secretary 
has managed this Department during two major battles in the war on 
terror, Afghanistan and Iraq. And at the same time, he's working to 
transform our military so it functions better, it's lighter, it's ready 
to strike on a moment's notice--in other words, that the force structure 
meets the demands we face in the 21st century.
    Not only is he working to transform the nature of the forces, we're 
working to transform where our forces are based. As you know, we have 
recently worked with the South Korean Government, for example, to 
replace manpower with equipment, to keep

[[Page 2998]]

the Peninsula secure and the Far East secure but, at the same time, 
recognizing we have a different series of threats. And he's done a fine 
job, and I look forward to continuing to work with him.
    And I know the Secretary understands the Hill. He's been around in 
Washington a long period of time, and he will continue to reach out to 
Members of the Hill, explaining the decisions he's made. And I believe 
that in a new term, Members of the Senate and the House will recognize 
what a good job he's doing.
    Let's see here. Let's go to the TV personalities. [Laughter] Let's 
start with you, Cochran [John Cochran, ABC News]. David [David Gregory, 
NBC News], prepare yourself.

Kerik Nomination/Vetting Process/Director of National Intelligence

    Q. Any lessons you have learned, sir, from the failed nomination of 
Bernard Kerik? As you look forward now to pick a new Director of the 
Homeland Security Department and also as you pick a Director of National 
Intelligence, any lessons learned in terms of vetting and particularly 
with the DNI? What sort of qualities are you going to be looking for in 
that man or that woman that you choose?
    The President. Well, first, let me say that I was disappointed that 
the nomination of Bernard Kerik didn't go forward. In retrospect, he 
made the right decision to pull his name down. He made the decision. 
There was a--when the process gets going, our counsel asks a lot of 
questions and a prospective nominee listens to the questions and answers 
them and takes a look at what we feel is necessary to be cleared before 
the FBI check and before the hearings take place on the Hill.
    And Bernard Kerik, after answering questions and thinking about the 
questions, decided to pull his name down. I think he would have done a 
fine job as the Secretary of Homeland Security, and I appreciate his 
service to our country.
    We've vetted a lot of people in this administration. We vetted 
people in the first. We're vetting people in the second term, and I've 
got great confidence in our vetting process. And so the lessons learned 
is, continue to vet and ask good questions and get these candidates, the 
prospective nominees, to understand what we expect a candidate will face 
during a background check--FBI background check as well as congressional 
hearings.
    Now, in terms of the NDI--DNI, I'm going to find someone that knows 
something about intelligence, and capable and honest and ready to do the 
job. And I will let you know at the appropriate time when I find such a 
person.
    Gregory.

Training Iraqi Forces/Polls

    Q. Mr. President, thank you. A year ago we were in this room, almost 
to the day, and you were heralding the capture of Saddam Hussein and 
announcing the end of Ba'athists' tyranny in Iraq. A year later, the 
chairman of the Armed Services Committee in the Senate said, after 
returning from Iraq, that--talking about Iraqi troops--the raw material 
is lacking in the willpower and commitment after they receive military 
training. At the same time, here at home a higher percentage of 
Americans is less confident of a successful conclusion in Iraq, 48 
percent less confident to 41 percent. What's going wrong?
    The President. Well, first let me talk about the Iraqi troops. The 
ultimate success in Iraq is for the Iraqis to secure their country. I 
recognize that; the American people recognize that. That's the strategy. 
The strategy is to work to provide security for a political process to 
go forward. The strategy is to help rebuild Iraq. And the strategy is to 
train Iraqis so they can fight off the thugs and the killers and the 
terrorists who want to destroy the progress of a free society.
    Now, I would call the results mixed in terms of standing up Iraqi 
units who are willing to fight. There have been some cases where when 
the heat got on, they left the battlefield. That's unacceptable. Iraq 
will never secure itself if they have troops that when the heat gets on, 
they leave the battlefield. I fully understand that. On the other hand, 
there were some really fine units in Fallujah, for example, in Najaf, 
that did their duty. And so the--our military trainers, our military 
leaders have analyzed what worked

[[Page 2999]]

and what didn't work. And I met with General Abizaid and General Casey 
in the White House last week. And I think it was before the--I think it 
was Thursday morning, if I'm not mistaken--I was going to say before the 
interminable press conference--I mean press party. Anyway. [Laughter]
    Here's what--first of all, recruiting is strong. The place where the 
generals told me that we need to do better is to make sure that there is 
a command structure that connects the soldier to the strategy in a 
better way, I guess is the best way to describe it. In other words, 
they've got some generals in place and they've got foot soldiers in 
place, but the whole command structure necessary to have a viable 
military is not in place. And so they're going to spend a lot of time 
and effort on achieving that objective. And so the American people are 
taking a look at Iraq and wondering whether the Iraqis are eventually 
able--going to be able to fight off these bombers and killers. And our 
objective is to give them the tools and the training necessary to do so.
    Q. What about that percentage, though, 48 to 41? More Americans 
losing confidence----
    The President. You know, polls change, Dave. Polls go up. Polls go 
down. I can understand why people--they're looking on your TV screen and 
seeing indiscriminate bombing where thousands of innocent--or hundreds 
of innocent Iraqis are getting killed, and they're saying whether or not 
we're able to achieve the objective. What they don't see are the small 
businesses starting; 15 of the 18 provinces are relatively stable, where 
progress is being made; life is better now than it was under Saddam 
Hussein. And so there is--there are very hopeful signs.
    But no question about it, the bombers are having an effect. You 
know, these people are targeting innocent Iraqis. They're trying to 
shake the will of the Iraqi people and, frankly, trying to shake the 
will of the American people. And car bombs that destroy young children 
or car bombs that indiscriminately bomb in religious sites are effective 
propaganda tools. But we must meet the objective, which is to help the 
Iraqis defend themselves and at the same time have a political process 
to go forward. It's in our long-term interests that we succeed, and I'm 
confident we will.
    I saw an interesting comment today by somebody, I think in the 
Karbala area or Najaf area, who said, ``Look, what they're trying to 
do''--``they'' being the terrorists--``are trying to create sectarian 
violence.'' He said, ``They're not going to intimidate us from voting. 
People want to vote. People want to live in a free society.'' And our 
job in these tough times is to work and complete our strategy.
    Yes, John [John King, Cable News Network]. And then John [John 
Roberts, CBS News].
    Q. Mr. President, thank you.
    The President. I had to work my way through all the mass medias.

Syria and Iran

    Q. You mentioned that meeting with General Abizaid and General 
Casey. One of their complaints now and a complaint we have heard dating 
back more than a year ago, even to when combat was underway in Iraq, is 
what some called meddling, interference from Syria and Iran, people 
coming across the border, people going back across the border, sometimes 
money. Now they say meddling in the political process. What specifically 
is the problem now, in your view? And there are some who watch this and 
see a series of complaints from the administration, but they say, ``Will 
there ever be consequences?''
    The President. Well, the--yes, I spent some time talking to our 
generals about whether or not there are former Saddam loyalists in 
Syria, for example, funneling money to the insurgents. And my attitude 
is, if there's any question that they're there, we ought to be working 
with the Syrian Government to prevent them from either sending money 
and/or support of any kind. We have sent messages to the Syrians in the 
past, and we will continue to do so. We have tools at our disposal, a 
variety of tools, ranging from diplomatic tools to economic pressure. 
Nothing is taken off the table. And when I said the other day that I 
expect these countries to honor the political process in Iraq without 
meddling, I meant it. And, hopefully, those Governments heard what I 
said.
    John.

[[Page 3000]]

Second Term Agenda/Social Security Reform

    Q. Thank you, Mr. President. You've made Social Security reform the 
top of your domestic agenda for a second term. You've been talking 
extensively about the benefits of private accounts. But by most 
estimations, private accounts may leave something for young workers at 
the end but wouldn't do much to solve the overall financial problem with 
Social Security.
    And I'm just wondering, as you're promoting these private accounts, 
why aren't you talking about some of the tough measures that may have to 
be taken to preserve the solvency of Social Security, such as increasing 
the retirement age, cutting benefits, or means testing for Social 
Security?
    The President. Yes, I appreciate that question. First of all, let me 
put the Social Security issue in proper perspective. It is a very 
important issue, but it's not the only issue, very important issue we'll 
be dealing with. I expect the Congress to bring forth meaningful tort 
reform. I want the legal system reformed in such a way that we are 
competitive in the world. I'll be talking about the budget, of course. 
There is a lot of concern in the financial markets about our deficits, 
short-term and long-term deficits. The long-term deficit, of course, is 
caused by some of the entitlement programs, the unfunded liabilities 
inherent in our entitlement programs. I will continue to push on an 
education agenda. There's no doubt in my mind that the No Child Left 
Behind Act is meaningful, real, reform that is having real results. And 
I look forward to strengthening No Child Left Behind. Immigration reform 
is a very important agenda item as we move forward.
    But Social Security as well is a big item. And I campaigned on it, 
as you're painfully aware, since you had to suffer through many of my 
speeches. I didn't duck the issue like others have done have in the 
past. I said this is a vital issue, and we need to work together to 
solve it. Now, the temptation is going to be, by well-meaning people 
such as yourself, John, and others here, as we run up to the issue, to 
get me to negotiate with myself in public, to say, you know, ``What's 
this mean, Mr. President? What's that mean?'' I'm not going to do that.
    I don't get to write the law. I will propose a solution at the 
appropriate time, but the law will be written in the Halls of Congress. 
And I will negotiate with them, with the Members of Congress, and they 
will want me to start playing my hand: ``Will you accept this? Will you 
not accept that? Why don't you do this hard thing? Why don't you do 
that?'' I fully recognize this is going to be a decision that requires 
difficult choices, John. Inherent in your question is, do I recognize 
that? You bet I do. Otherwise, it would have been done.
    And so I am--I just want to try to condition you. I'm not doing a 
very good job, because the other day in the Oval when the press pool 
came in, I was asked about this, a series of question on--a question on 
Social Security with these different aspects to it. And I said, ``I'm 
not going to negotiate with myself,'' and I will negotiate at the 
appropriate time with the law writers. And so thank you for trying.
    The principles I laid out in the course of the campaign and the 
principles we laid out at the recent economic summit are still the 
principles I believe in. And that is, nothing will change for those near 
our Social Security; payroll--I believe you were the one who asked me 
about the payroll tax, if I'm not mistaken--will not go up.
    And I know there's a big definition about what that means. Well, 
again, I will repeat, don't bother to ask me. Or you can ask me. I 
shouldn't--I can't tell you what to ask. It's not the holiday spirit. 
[Laughter] It is all part of trying to get me to set the parameters 
apart from the Congress, which is not a good way to get substantive 
reform done.
    As to personal accounts, it is, in my judgment, essential to make 
the system viable in the out years to allow younger workers to earn an 
interest rate more significant than that which is being earned with 
their own money now inside the Social Security trust. But the first step 
in this process is for Members of Congress to realize we have a problem.
    And so for a while, I think it's important for me to continue to 
work with members

[[Page 3001]]

of both parties to explain the problem. Because if people don't think 
there's a problem, we can talk about this issue until we're blue in the 
face, and nothing will get done. And there is a problem. There's a 
problem because now it requires three workers per retiree to keep Social 
Security promises. In 2040, it will require two workers per employee to 
meet the promises. And when the system was set up and designed, I think 
it was, like, 15 or more workers per employee. That is a problem. The 
system goes into the red. In other words, there's more money going out 
than coming in, in 2018. There is an unfunded liability of $11 trillion. 
And I understand how this works. Many times, legislative bodies will not 
react unless the crisis is apparent, crisis is upon them. I believe that 
crisis is.
    And so for a period of time, we're going to have to explain to 
Members of Congress, the crisis is here. It's a lot less painful to act 
now than if we wait.
    Q. Can I ask a followup?
    The President. No. [Laughter] Otherwise, it will make everybody else 
jealous, and I don't want that to happen.
    Angle [Jim Angle, FOX News].

Personal Retirement Accounts

    Q. Thank you, sir. Mr. President, on that point, there is already a 
lot of opposition to the idea of personal accounts, some of it fairly 
entrenched among the Democrats. I wonder what your strategy is to try to 
convince them to your view? And specifically, they say that personal 
accounts would destroy Social Security. You argue that it would help 
save the system. Can you explain how?
    The President. I will try to explain how without negotiating with 
myself. It's a very tricky way to get me to play my cards. I understand 
that. I think what you--people ought to do is to go look at the Moynihan 
Commission report. The other day, in the discussions at the economic 
summit, we discussed the role of a personal account, in other words, 
what--how a personal account would work. And that is, the people could 
set aside a negotiated amount of their own money in an account that 
would be managed by that person, but under serious guidelines. As I 
said, you can't use the money to go to the lottery or take it to the 
track. There would be--it's like the--some of the guidelines that some 
of the Thrift Savings Plans right here in the Federal Government.
    And the younger worker would gain a rate of return which would be 
more substantial than the rate of return of the money now being earned 
in the Social Security trust. And over time, that rate of return would 
enable that person to be--have an account that would make up for the 
deficiencies in the current system. In other words, the current system 
can't sustain that which has been promised to the workers. That's what's 
important for people to understand, and the higher rate of return on the 
negotiated amount of money set aside would enable that worker to more 
likely get that which was promised.
    Now, the benefits, as far as I'm concerned, of the personal savings 
account, is, one, it encourages an ownership society. One of the 
philosophies of this Government is, if you own something, it is--it 
makes the country a better--if more people own something, the country is 
better off. You have a stake in the future of the country if you own 
something. Secondly, it's capital available for--when people save, it 
provides capital for entrepreneurial growth and entrepreneurial 
expansion, which is positive. In other words, it enhances savings. And 
thirdly, it means that people can take their own assets, their own 
retirement assets, and pass them on, if they so choose, to their family 
members, for example. That's positive. That's a step.
    The Social Security system was designed in a--obviously, in an era 
that is long gone, and it has worked in many ways. It's now in a 
precarious position, and the question is whether or not our society has 
got the will necessary to adjust from a defined benefit plan to a 
defined contribution plan. And I believe the will will be there, but I'm 
under no illusions. It's going to take hard work. It's going to take 
hard work to convince a lot of people, some of whom would rather not 
deal with the issue--why deal with the issue unless there is a crisis?--
and some of whom have got preconceived notions about the benefits of 
what may be possible.
    Okay, let's get away from the media. Yes, Carl [Carl Cannon, 
National Journal], thank

[[Page 3002]]

you. I accused Carl of trying to look like Johnny Damon. [Laughter]

Timetable for Iraq/Training Iraqi Forces

    Q. Mr. President, it's--140,000 Americans are spending this 
Christmas in Iraq, as you know, some of them their second Christmas 
there. Now, you outlined your vision for Iraq, both in your statement 
and in response to David Gregory. My question is, how long do you think 
it will take that vision to be realized, and how long will those troops 
be there?
    The President. No, it's a very legitimate question, Carl. And I get 
asked that by family members I meet with, and people say, ``How long do 
you think it will take?'' And my answer is, you know, we would like to 
achieve our objective as quickly as possible. It is our commander--
again--I can--the best people that reflect the answer to that question 
are people like Abizaid and Casey, who are right there on the ground. 
And they are optimistic and positive about the gains we're making.
    Again, I repeat, we're under no illusions that this Iraqi force is 
not ready to fight. They're--in toto, there are units that are, and that 
they believe they'll have a command structure stood up pretty quickly, 
that the training is intense, that the recruitment is good, the 
equipping of troops is taking place. So they're optimistic that as soon 
as possible it can be achieved. But it's--I'm also wise enough not to 
give you a specific moment in time because, sure enough, if we don't 
achieve it, I'll spend the next press conference I have with you 
answering why we didn't achieve this specific moment.
    Sanger [David Sanger, New York Times].

North Korea/Iran

    Q. Thank you, Mr. President. You spent a good deal of time before 
the Iraq war, some in this room, explaining to us why the combination of 
Saddam Hussein as a dictator and the weapons that you thought at the 
time he had assembled made a case for regime change. In the case of 
North Korea and Iran, you have not declared yourself on the question of 
regime change, though North Korea, your intelligence agencies believe, 
may have added six or seven nuclear weapons in the past 2 years. And 
Iran seems to have a covert program, or at least your Government 
believes it does. Where do you stand on regime change? And how would it 
be accomplished?
    The President. I'll tell you where I stand, David. I stand on the--
continuing the six-party talks with North Korea to convince Kim Chong-il 
to give up his weapons systems. As you might remember, our countries 
tried a strategy of bilateral relationships in hopes that we can 
convince Kim Chong-il. It didn't work. As a matter of fact, when we 
thought we had in good faith agreed to an agreement--I mean, agreed to a 
plan that would work, he, himself, was enriching uranium, or saw to it 
that the uranium was enriched. In other words, he broke the agreement.
    I think it's an important lesson for this administration to learn 
and that the best way to convince him to disarm is to get others to 
weigh in as well--the Iranian situation as well. We're relying upon 
others, because we've sanctioned ourselves out of influence with Iran, 
to send a message that we expect them to--in other words, we don't have 
much leverage with the Iranians right now, and we expect them to listen 
to those voices, and we're a part of the universal acclaim.
    I believe that--and so, therefore, we're dealing--this is how we're 
dealing with the issue. And it's much different between the situation in 
Iraq and Iran because of this. Diplomacy had failed for 13 years in 
Iraq. As you might remember, and I'm sure you do, all the U.N. 
resolutions that were passed out of the United Nations, totally ignored 
by Saddam Hussein.
    And so diplomacy must be the first choice and always the first 
choice of an administration trying to solve an issue of, in this case, 
nuclear armament. And we'll continue to press on diplomacy.
    Now, in terms of my vision for the future of the world, I believe 
everybody ought to be free. I believe the world is more peaceful as 
liberty takes hold. Free societies don't fight each other. And so we'll 
work to continue to send a message to reformers around the world that 
America stands strong in our belief that freedom is universal, and that 
we hope at some point in time, everybody is free.
    Yes.

[[Page 3003]]

Federal Spending/Budget Process

    Q. Thank you, Mr. President. You talked earlier about the importance 
of spending discipline in the Federal budget, but you went your entire 
first term without vetoing a single spending bill, even though you had a 
lot of tough talk on that issue in your first term. And I'm wondering, 
this time around, what are you going to do to convince Congress you 
really are serious about cutting Federal spending? Will you veto 
spending bills this time?
    The President. Here's what happened. I submitted a budget, and 
Congress hit our number, which is a tribute to Senator Hastert and--I 
mean, Senator Frist and Speaker Hastert's leadership. In other words, we 
worked together. We came up with a budget, like we're doing now. We went 
through the process of asking our agencies, ``Can you live with this,'' 
and, ``If you don't like it, counter-propose.''
    And then we came up with a budget that we thought was necessary, and 
we took it to the leadership, and they accepted the budget. And they 
passed bills that met our budget targets. And so how could you veto a 
series of appropriations bills if the Congress has done what you've 
asked them to do?
    Now, I think the President ought to have a line-item veto, because 
within the appropriations bills there may be some differences of opinion 
on how the money is being spent. But overall, they have done a superb 
job of working with the White House to meet the budget numbers we 
submitted, and so the appropriations bill I just signed was one that 
conformed with the budget agreement we had with the United States 
Congress. And I really do appreciate the leadership not only of Speaker 
Hastert and Senator Frist but also the budget committee chairman. I 
talked to Senator Gregg this morning, as a matter of fact, who's 
running--he'll be heading the budget committee in the United States 
Senate.
    And we're working very closely with Members of Congress as we 
develop the budget. And it's going to be a tough budget, no question 
about it, and it's a budget that I think will send the right signal to 
the financial markets and to those concerned about our short-term 
deficits. As well, we've got to deal with the long-term deficit issues. 
That's the issue that John Roberts talked about, which is the unfunded 
liabilities when it comes to some of the entitlement programs.
    Ed [Ed Chen, Los Angeles Times].

Social Security Reform

    Q. Good morning, Mr. President. I'd like to ask you, on Social 
Security, you said that you don't like to come to the table with--having 
negotiated with yourself. Yet, you have ruled out tax cuts and no cuts 
in benefits for the retired and the near-retired. I wonder how you 
square that statement. And also, what do you--in your mind, what is 
near-retired?
    The President. Yes, well, that's going to fall in the negotiating 
with myself category. But look, it was very important for me in the 
course of the campaign, and it's going to very important for all of us 
who feel like we have a problem that needs to be fixed, to assure 
Americans who are on Social Security that nothing will change.
    Part of the problem, politically, with this issue in the past, Ed, 
as you know, is the minute you bring up Social Security reform, people 
go running around the country saying, ``Really what he says is he's 
going to take away your check,'' or ``That which you have become 
dependent upon will no longer be available for you to live on.'' And so, 
therefore, part of setting the stage or laying the groundwork for there 
to be a successful reform effort is assuring our seniors that they just 
don't have to worry about anything. When they hear the debate that is 
taking place on the floor of the Congress, they just need to know that 
the check they're getting won't change, that promises will be met, that, 
you know, if there is to be an increase in their check, they'll get 
their check. In other words, the formula that has enabled them to the--
to a certain extent--the formula they're relying on won't change, let me 
put it that way. I was trying to be really brilliant.
    Now, what was the other part of your question?
    Q. If I could just follow up. Why----
    The President. Is this a followup or part of the question?
    Q. You asked, though. [Laughter]

[[Page 3004]]

    The President. Okay, yes, you're right. [Laughter]

Medicare Reform

    Q. Why did you choose to take on Social Security and not Medicare, 
which some people believe is a worse problem?
    The President. Well, I appreciate that, Ed, but we did take on 
Medicare. And it was the Medicare reform bill that really began to 
change Medicare as we knew it. In other words, it introduced market 
forces for the first time. It provided a prescription drug coverage for 
our seniors, which I believe will be cost effective. I recognize some of 
the actuaries haven't come to that conclusion yet. But the logic is 
irrefutable, it seems like to me, that if the Government is willing to 
pay $100,000 for heart surgery but not a dime for the prescription drug 
that would prevent the heart surgery from happening in the first place, 
aren't we saving money when we provide the money necessary to prevent 
the surgery from being needed in the first place? I think we are. That's 
one of the differences of opinion that I had with the actuaries.
    I readily concede I'm out of my lane. I'm not pretending to be an 
actuary. But I know that we made progress in modernizing the Medicare 
system. And there's more work to be done, no question about it. But as 
you know, it's a 3-year phase-in on Medicare--or 2-year phase-in from 
now. And in 2006, the prescription drug coverage will become available 
for our seniors. And I look forward to working with Members of Congress 
to make sure the Medicare system is solvent in the long run.
    Let's have somebody new. Mike [Mike Allen, Washington Post], you 
want to--no, you're not new. [Laughter] That is a cheap shot. Go ahead--
that is generous.

Immigration Reform

    Q. Thank you. [Laughter] Yes, Mr. President----
    The President. Yes, Mike, welcome.
    Q. ----since early in your first term you've talked about 
immigration reform, but yet, people in your own party on the Hill seem 
opposed to this idea. And you've gotten opposition even on the other 
side. Do you plan to expend some of your political capital this time to 
see this through?
    The President. Yes, I appreciate that--well, first of all, welcome. 
I'd like to welcome all the new faces--some prettier than others, I 
might add. [Laughter]
    Yes, I intend to work with Members of Congress to get something 
done. I think this is an issue that will make it easier for us to 
enforce our borders. And I believe it's an issue that is--that will show 
the--if when we get it right, the compassionate heart of American 
people. And no question, it's a tough issue, just like some of the other 
issues we're taking on. But my job is to confront tough issues and to 
ask Congress to work together to confront tough issues.
    Now let me talk about the immigration issue. First, we want our 
Border Patrol agents chasing crooks and thieves and drugrunners and 
terrorists, not good-hearted people who are coming here to work. And 
therefore, it makes sense to allow the good-hearted people who are 
coming here to do jobs that Americans won't do a legal way to do so. And 
providing that legal avenue, it takes the pressure off the border.
    Now, we need to make sure the border is modern, and we need to 
upgrade our Border Patrol. But if we expect the Border Patrol to be able 
to enforce a long border, particularly in the south--and the north, for 
that matter--we ought to have a system that recognizes people are coming 
here to do jobs that Americans will not do. And there ought to be a 
legal way for them to do so. To me, that is--and not only that, but once 
the person is here, if he or she feels like he or she needs to go back 
to see her family, to the country of origin, they should be able to do 
so within a prescribed--in other words, and the card, the permit would 
last for a prescribed period of time. It's a compassionate way to treat 
people who come to our country. It recognizes the reality of the world 
in which we live. There are some people--there are some jobs in America 
that Americans won't do and others are willing to do.
    Now, one of the important aspects of my vision is that this is not 
automatic citizenship. The American people must understand that, that if 
somebody who is here working wants to be a citizen, they can get in line 
like those

[[Page 3005]]

who have been here legally and have been working to become a citizen in 
a legal manner.
    And this is a very important issue, and it's a--and I look forward 
to working with Members of Congress. I fully understand the politics of 
immigration reform. I was the Governor of Texas, right there on the 
frontlines of border politics. I know what it means to have mothers and 
fathers come to my State and across the border of my State to work. 
Family values do not stop at the Rio Grande River, is what I used to 
tell the people of my State. People are coming to put food on the table; 
they're doing jobs Americans will not do.
    And to me, it makes sense for us to recognize that reality and to 
help those who are needing to enforce our borders; legalize the process 
of people doing jobs Americans won't do; take the pressure off of 
employers so they're not having to rely upon false IDs; cut out the 
``coyotes'' who are the smugglers of these people, putting them in the 
back of tractor trailers in the middle of August in Texas, allowing 
people to suffocate in the back of the trucks; stop the process of 
people feeling like they've got to walk miles across desert in Arizona 
and Texas in order just to feed their family, and they find them dead 
out there. I mean, this is a system that can be much better.
    And I'm passionate on it because the nature of this country is one 
that is good-hearted and compassionate. Our people are compassionate. 
The system we have today is not a compassionate system. It's not 
working. And as a result, the country is less secure than it could be 
with a rational system.
    Yes, sir. Let us take it overseas, across the pond.

Usama bin Laden/Guantanamo Detainees

    Q. Thank you very much, Mr. President. I wonder whether I could ask 
you two central questions about the war on terrorism. The first one is, 
do you have a sense of where Usama bin Laden is and why the trail on him 
seems to have gone cold? And secondly, how concerned are you by the 
reports of torture, to use your word, the interminable delays to 
justice, for the detainees held in Guantanamo and how much that damages 
America's reputation as a nation which stands for liberty and justice 
internationally?
    The President. Right, thank you. If I had to guess, I would guess 
that Usama bin Laden is in a remote region on the Afghan-Pakistan 
border. But I don't have to guess at the damage we have done to his 
organization. Many of his senior operators have been killed or detained. 
Pakistan Government has been aggressive in pursuit of Al Qaida targets 
in Waziristan.
    And I appreciate the work of President Musharraf. He came the other 
day, on a Saturday morning, to the White House, and it was an 
opportunity to thank him once again for some of the bold steps he's 
taken. And Al Qaida is dangerous, no question about it. But we've got a 
good strategy, and it's a strategy that requires cooperation with other 
nations, and the cooperation has been great when it comes to sharing 
intelligence and cutting off finances and arresting people or killing 
people. We'll stay on the hunt.
    In terms of the second part of your--oh, the damage. Look, we are a 
nation of laws and to the extent that people say, ``Well, America is no 
longer a nation of laws,'' that does hurt our reputation. But I think 
it's an unfair criticism. As you might remember, our courts have made a 
ruling. They looked at the jurisdiction, the right of people in 
Guantanamo to have habeas review, and so we're now complying with the 
court's decisions. We want to fully vet the court decision, because I 
believe I have the right to set up military tribunals. And so the law is 
working to determine what Presidential powers are available and what's 
not available. We're reviewing the status of the people in Guantanamo on 
a regular basis. I think 200 and some-odd have been released. But you've 
got to understand the dilemma we're in. These are people that got 
scooped up off a battlefield, attempting to kill U.S. troops. I want to 
make sure, before they're released, that they don't come back to kill 
again.
    I think it's important to let the world know that we fully 
understand our obligations in a society that honors rule of law to do 
that. But I also have an obligation to protect the American people, to 
make sure we understand the nature of the people that we hold, whether 
or not there's possible intelligence

[[Page 3006]]

we can gather from them that we could then use to protect us. So we'll 
continue to work the issue hard.
    Let's see here, yes, Hutch [Ron Hutcheson, Knight Ridder]. Go ahead 
and yell it out, Hutch.

Defense Secretary Rumsfeld

    Q. Going for another new face, huh?
    The President. Yes. [Laughter]
    Q. I'd like to go back to Secretary Rumsfeld----
    The President. It's not a pretty face. [Laughter]
    Q. Thank you. [Laughter] You talked about the big picture elements 
of the Secretary's job, but did you find it offensive that he didn't 
take the time to personally sign condolence letters to the families of 
troops killed in Iraq? And if so, why is that an offense that you're 
willing to overlook?
    The President. Listen, I know how--I know Secretary Rumsfeld's 
heart. I know how much he cares for the troops. He and his wife go out 
to Walter Reed and Bethesda all the time to provide comfort and solace. 
I have seen the anguish in his--or heard the anguish in his voice and 
seen his eyes when we talk about the danger in Iraq and the fact that 
youngsters are over there in harm's way. And he is--he's a good, decent 
man. He's a caring fellow. Sometimes, perhaps, his demeanor is rough and 
gruff, but beneath that rough and gruff, no-nonsense demeanor is a good 
human being who cares deeply about the military and deeply about the 
grief that war causes.
    Deans [Bob Deans, Cox Newspapers].

Situation in the Middle East

    Q. Mr. President, I want to kick forward to the elections in Gaza in 
a few weeks if I could, please. As you know, Presidents back to Carter 
have searched for a solution to the Palestinian-Israeli conflict. Your 
dad worked hard for it. Your predecessor said once it was like going to 
the dentist without getting your gums numbed. I'm wondering what great--
--
    The President. Guy had a way with words. [Laughter]
    Q. I'm wondering, sir, what lesson you draw, though, from their 
efforts, how you think the war in Iraq may, at this point, have improved 
prospects for a Mideast peace, and whether you think you might sit in 
that diplomatic dental chair yourself this year?
    The President. I've been in the diplomatic dental chair for 4 years. 
This is an issue we talk about a lot, but it became apparent to me that 
peace would never happen so long as the interlocutor in the peace 
process was not really dedicated to peace or dedicated to a state.
    I was at--look, I gave the speech June 24, 2002, in the Rose Garden 
that laid out the vision about how to achieve--at least from my point of 
view, how to achieve a peaceful solution and something that I hope 
happens. But I'm realistic about how to achieve peace, and it starts 
with my understanding that there will never be peace until a true 
democratic state emerges in the Palestinian territory. And I'm hopeful 
right now because the Palestinians will begin to have elections, have--
will have elections, which is the beginning of the process toward the 
development of a state. It is not the sign that democracy has arrived. 
It is the beginning of a process.
    And we look forward to working with Israel to uphold her obligations 
to enable a Palestinian state to emerge. But we've got a good chance to 
get it done. And I just want the people--and I know the world is 
wondering whether or not this is just empty rhetoric or does--do I 
really believe that now is the time to move the process forward. And the 
answer is, now is the time to move the process forward. But we cannot 
shortcut the process by saying, you know, ``Well, the Palestinians can't 
self-govern. They're not suitable for a democracy.''
    I subscribe to this theory, that the only way to achieve peace is 
for there to be democracies living side by side. Democracies don't fight 
each other. And the last system didn't work, which was the hope that a 
Palestinian Authority, run by a singular head who on some days would 
say, ``We're for peace,'' and some days would say, ``Now is the time to 
attack,'' hope that everything would be fine. It just didn't work.
    So I look forward to working with the world, the new Secretary of 
State, to work with the Palestinians to develop the structures necessary 
for a democracy to emerge.

[[Page 3007]]

And I appreciate the fact that Prime Minister Tony Blair is willing to 
help that process by holding a conference with Palestinians that will 
help develop the state. And if the free world focuses on helping the 
Palestinians develop a state and there is leadership willing to accept 
the help, it's possible to achieve peace. And there are responsibilities 
for all parties. The Palestinians have responsibilities. The Israelis 
have responsibilities. The Americans have responsibilities. The EU has 
responsibilities. But we all have got to keep the big vision in mind in 
order to achieve the objective.
    Listen, thank you all very much. I wish everybody--truly wish 
everybody a happy holidays. For those of you coming to Crawford, I look 
forward to not seeing you down there. [Laughter]
    Thank you all.

Crawford Pirates

    Q. Are you going to the Rose Bowl?
    The President. No, I won't be going to the Rose Bowl. I'll be 
watching the Rose Bowl.
    And by the way, in case you're not following high school football in 
Texas--atta boy, Jackson [David Jackson, Dallas Morning News]--the 
Crawford Pirates are the State 2A, Division II champs. And we look 
forward--don't we--to wave the championship banner above the Crawford 
High School.
    All right, happy holidays.

Note: The President's news conference began at 10:32 a.m. in Room 450 of 
the Dwight D. Eisenhower Executive Office Building. In his remarks, he 
referred to President Hamid Karzai of Afghanistan; President Vladimir 
Putin of Russia; former President Saddam Hussein of Iraq; Gen. John P. 
Abizaid, USA, combatant commander, U.S. Central Command; Gen. George W. 
Casey, USA, commanding general, Multi-National Force--Iraq; professional 
baseball player Johnny Damon; Chairman Kim Chong-il of North Korea; 
Usama bin Laden, leader of the Al Qaida terrorist organization; 
President Pervez Musharraf of Pakistan; Joyce Rumsfeld, wife of 
Secretary of Defense Donald H. Rumsfeld; and Prime Minister Tony Blair 
of the United Kingdom. He also referred to the President's Commission to 
Strengthen Social Security (Moynihan Commission). The Office of the 
Press Secretary also released a Spanish language transcript of this news 
conference.