[Weekly Compilation of Presidential Documents Volume 43, Number 32 (Monday, August 13, 2007)]
[Pages 1056-1066]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
The President's News Conference

August 9, 2007

    The President. Good morning, thank you. When I came into office in 
2001, our Nation was headed into a recession, so we cut the taxes across 
the board. And hard-working Americans have used this tax relief to 
produce strong and lasting economic growth.
    Since we began cutting taxes in 2001, our economy has expanded by 
more than $1.9 trillion. Since the tax cuts took full effect in 2003, 
our economy has added more than 8.3 million new jobs and almost 4 years 
of uninterrupted growth. Inflation is low; unemployment is low; real 
after-tax income has grown by an average of more than $3,400 per person 
since I took office. The American economy is the envy of the world, and 
we need to keep it that way.
    Our economy is growing in large part because America has the most 
ambitious, educated, and innovative people in the world--men and women 
who take risks, try out new ideas, and have the skills and courage to 
turn their dreams into new technologies and new businesses. To stay 
competitive in the global economy, we must continue to lead the world in 
human talent and creativity.
    So in my 2006 State of the Union Address, I announced the American 
Competitiveness Initiative, and I called on Republicans and Democrats in 
Congress to join me in this effort to encourage innovation throughout 
our economy. As part of this initiative, I asked Congress to expand 
America's investment in basic research, so we can support our Nation's 
most creative minds as they explore new frontiers in nanotechnology or 
supercomputing or alternative energy sources. I asked Congress to 
strengthen math and science education, so our children have the skills 
they need to compete for the jobs of the future. I asked Congress to 
make permanent the research and development tax credit, so we can 
encourage bolder private-sector initiatives in technology.
    Today I'm going to sign into law a bill that supports many of the 
key elements of the American Competitiveness Initiative. This 
legislation supports our efforts to double funding for basic research in 
physical sciences. This legislation authorizes most of the education 
programs I called for in the initiative I laid out at the State of the 
Union. These programs include Math Now proposals to improve instruction 
in mathematics and the Advanced Placement program my administration 
proposed to increase the number of teachers and students in AP and 
international baccalaureate classes.
    These are important steps forward, and so I'm going to sign the 
bill. I'm looking forward to it. Yet the bill Congress sent to my desk 
leaves some of the key priorities unfulfilled and authorizes unnecessary 
and duplicative programs. I will continue to focus my budget requests on 
the key priorities in the bill I outlined and will work with Congress to 
focus its spending on those programs that will be most effective.
    I will continue to press Congress to approve the remaining measures 
of the American Competitiveness Initiative. These measures include the 
Adjunct Teacher Corps program to encourage math and science 
professionals to take time out of their lives and

[[Page 1057]]

teach in our schools and to inspire the youth to become more interested 
in math and science. I believe Congress ought to make the research and 
development tax credit a permanent part of the Tax Code, to encourage 
investment.
    The bill I will sign today will help ensure that we do remain the 
most competitive and innovative nation in the world. I thank Members of 
Congress from both parties who worked hard to secure its passage. I 
particularly want to thank Senators Pete Domenici, Jeff Bingaman, Lamar 
Alexander, and John Ensign, as well as Congressmen Bart Gordon and Vern 
Ehlers.
    You know, this bill shows that we can work together to make sure 
we're a competitive nation. There's a lot of areas where we can seek 
common ground coming this fall, and I'm looking forward to working with 
members of both parties to do that.
    Thank you for coming. I'll be glad to answer some of your questions, 
starting with you, Terry [Terence Hunt, Associated Press].

Transportation Infrastructure

    Q. Mr. President, former chairman of the House Transportation 
Committee, Republican Don Young, says there are about 500 bridges around 
the country like the one that collapsed in Minneapolis last week. And 
Young and other Transportation Committee members are recommending an 
increase in Federal gasoline taxes to pay for repairs. Would you be 
willing to go along with an increase in gasoline taxes of 5 cents a 
gallon or more?
    The President. First of all, Secretary Peters is gathering 
information and will report to the White House and report to the Nation 
about what she finds about whether there are any structural design flaws 
that may be applicable to other bridges. She's in the process of 
gathering this information now.
    The American people need to know that we're working hard to find out 
why the bridge did what it did, so that we can assure people that the 
bridges over which they will be traveling will be safe. That's step one.
    You know, it's an interesting question about how Congress spends and 
prioritizes highway money. My suggestion would be that they revisit the 
process by which they spend gasoline money in the first place.
    As you probably know, the public works committee is the largest 
committee--one of the largest committees in the House of 
Representatives. From my perspective, the way it seems to have worked is 
that each member on that committee gets to set his or her own priority 
first, and then whatever is left over is spent through a funding 
formula. That's not the right way to prioritize the people's money. So 
before we raise taxes which could affect economic growth, I would 
strongly urge the Congress to examine how they set priorities. And if 
bridges are a priority, let's make sure we set that priority first and 
foremost before we raise taxes.

Situation in Pakistan

    Q. Thank you, Mr. President. One of your chief allies in the war on 
terrorism, President Musharraf of Pakistan, has faced so much 
instability and civil strife recently that there has been talk of 
declaring a state of emergency. How concerned are you about President 
Musharraf's situation and whether this might undermine Pakistani efforts 
against the Taliban and Al Qaida elements in the bordering areas of his 
country, which have been roundly criticized recently?
    The President. You know, I've seen the reports of what they call an 
emergency declaration. I have seen no such evidence that he's made that 
decision. In my discussions with President Musharraf, I have reminded 
him that we share a common enemy, extremists and radicals who would like 
to do harm to our respective societies. In his case, they would like to 
kill him, and they've tried.
    I have made it clear to him that I would expect there to be full 
cooperation in sharing intelligence, and I believe we've got good 
intelligence sharing. I have indicated to him that the American people 
would expect there to be swift action taken if there is actionable 
intelligence on high-value targets inside his country. Now, I recognize 
Pakistan is a sovereign nation, and that's important for Americans to 
recognize that. But it's also important for Americans to understand that 
he shares the same concern about radicals and extremists as I do and as 
the American people do.

[[Page 1058]]

    So my focus in terms of the domestic scene there is that he have a 
free and fair election. And that's what we have been talking to him 
about, and I'm hopeful they will.
    Yes, we'll just go down the line here. Yes, you.

Pat Tillman

    Q. Thank you, Mr. President. You speak often about taking care of 
the troops and honoring their sacrifice. But the family of Corporal Pat 
Tillman believes there was a coverup regarding his death, and some say 
perhaps he was even murdered, instead of just friendly fire. At a 
hearing last week on Capitol Hill your former Defense Secretary, Donald 
Rumsfeld, other officials used some version of ``I don't recall'' 82 
times. When it was his term to step up, Pat Tillman gave up a lucrative 
NFL career, served his country, and paid the ultimate sacrifice. Now you 
have a chance to pledge to the family that your Government, your 
administration will finally get to the bottom of it. Will you make that 
pledge to the family today, that you'll finally, after seven 
investigations, find out what really happened?
    The President. Well, first of all, I can understand why Pat 
Tillman's family, you know, has got significant emotions, because a man 
they loved and respected was killed while he was serving his country. I 
always admired the fact that a person who was relatively comfortable in 
life would be willing to take off one uniform and put on another to 
defend America. And the best way to honor that commitment of his is to 
find out the truth. And I'm confident the Defense Department wants to 
find out the truth too, and we'll lay it out for the Tillman family to 
know.
    Q. But, Mr. President, there have been seven investigations and the 
Pentagon has not gotten to the bottom of it. Can you also tell us when 
you, personally, found out that it was not enemy fire, that it was 
friendly fire?
    The President. I can't give you the precise moment. But obviously, 
the minute I heard that the facts that people believed were true were 
not true, that I expect there to be a full investigation and get to the 
bottom of it.

2008 Presidential Election/Al Qaida in Pakistan

    Q. Sir, on Monday at Camp David, when you met with President Karzai 
from Afghanistan, you were asked if you had actionable intelligence in 
Pakistan of top Al Qaida leaders, would you take action unilaterally, if 
in fact you felt that President Musharraf simply, for one reason or 
another, just simply couldn't get his people there in time, would you 
move in? And you said, if we had actionable--good, actionable 
intelligence, we would get the job done.
    My question, one, is, who is ``we''? Does that we include the 
Pakistanis or--because the question says, Musharraf wouldn't be able to 
be in--would you do it unilaterally? And one reason this is a hot 
question this week is that one of the Democratic Presidential 
candidates, Barack Obama, talked about taking unilateral action. He kind 
of got beaten up by people in the Democratic Party and by Mitt Romney in 
your party, Romney comparing him to Dr. Strangelove. I don't know if you 
would agree with that, or if you would feel----
    The President. John [John Cochran, ABC News], I suspect that over 
the course of the next months, when I hold a press conference, you'll be 
trying to get me to engage in Presidential politics; trying to get me to 
opine about what candidates are saying, whether they be Republicans or 
Democrats. And hopefully I'll be disciplined enough not to fall prey to 
your question, not to fall into that trap.
    To the question you asked and to my answer in Camp David, I said I'm 
confident that we--both the Paks and the Americans--will be able to work 
up a plan, based upon actionable intelligence, that will bring the top 
Al Qaida targets to justice. I meant what I said. We spend a lot of time 
with the leadership in Pakistan, talking about what we will do with 
actionable intelligence. And the question was, am I confident that they 
will be brought to justice? And my answer to you is, yes, I am 
confident.
    Q. Are you confident--permit me to have one followup, sir?
    The President. Sure.

[[Page 1059]]

Intelligence/Pakistan

    Q. I assume the CIA----
    The President. See, we're getting into kind of a relaxed period 
here. I'll try to be more accommodating to fellows like you.
    Q. It's widely assumed that the CIA operatives are in Pakistan, 
cooperating with the Pakistanis, and that they're sharing everything 
with you and vice versa. Is that a fair assumption?
    The President. John, what's fair is--what you must assume is that 
I'm not going to talk about ongoing intelligence matters.

Progress in Iraq

    Q. Mr. President, I was talking with a journalist about an hour ago 
in Baghdad who says to be a cynic in Iraq is to be naive at this point; 
that there is discernable progress, undeniable progress on the 
battlefield, but there is just as discernable and undeniable lack of 
progress on political reconciliation. Given the premise of the surge is 
to give the Iraqi Government breathing space to gets its business done, 
given that they're not getting their business done, are the American 
people entitled to hear from you more than, ``I've told Prime Minister 
Maliki he's got to do better''?
    The President. As you know, General Petraeus and Ambassador Crocker 
will be coming back to report on the findings of the success of the 
surge. The surge success will not only include military successes and 
military failures but also political successes and political failures. 
And my own perspective is, is that they have made some progress but not 
enough. I fully recognize this is a difficult assignment. One of the 
things that--it's difficult because of years of tyrannical rule that 
have created a lot of suspicions. And there's a lot of--these folks need 
to trust each other more.
    Secondly, from my perspective, we're watching leaders learn how to 
be leaders. This is a new process for people to be democratic leaders. 
Now, no question they haven't passed some of the law we expected them to 
pass up to now. That's where a lot of people will focus their attention. 
On the other hand, there is a Presidency Council, with people from 
different political parties, trying to work through some of these 
difficult issues, trying to work through the distrust that has caused 
them not to be able to pass some of the law we expect.
    And the July 15th report that I submitted to Congress, there were 
indications that they had met about half the benchmarks and some of the 
political benchmarks they were falling short. One of the things I found 
interesting is that the assembly--their elected Parliament has passed 
about 60 pieces of legislation this year, some of which are directly 
relevant to reconciliations, like judicial reform, some of which were 
unwinding Saddam's laws in the past.
    One of the questions I recently asked about, is there a functioning 
government? Is there--a lot of Americans look at it and say, ``There's 
nothing happening there. There's, like, no government at all,'' I expect 
they're saying. So I asked about the budgeting process. In other words, 
is there a centralized budgeting system that takes the oil revenues? As 
I understand, about 97 percent of the Iraqi revenues to date come from 
oil. And do they have a rational way of spending that money for the good 
of society? Now most of the money, it turns out, is going into their 
military operations, operating expenses and capital expenses.
    But one of the things I found interesting in my questions was there 
is revenue sharing. In other words, a central Government revenue sharing 
to Provincial governments. It surprised me, frankly, because the 
impression you get from people who are reporting out of Iraq is that 
it's, like, totally dysfunctional. That's what your--I guess your kind 
of--your friend or whoever you talked to is implying.
    In 2006, the central Government allocated $2.3 billion to the 
Provinces. You know, I'm not exactly sure how the funding formula 
worked, but a quick analysis, there is no question that Shi'a and Sunni 
Provinces and Kurdish Provinces were receiving money. Of the 2.3 
billion, 1.9 had been obligated or spent. Now, some of that money is 
being better spent now because of bottom-up reconciliation that's taken 
place in places like Anbar, particularly with the help of our Provincial 
Reconstruction Teams. The PRTs are helping. That's not to say what--my 
point to you there is that there needs still to be

[[Page 1060]]

work in making sure that the Provincial governments are functioning 
well, to earn the trust of the people. It's not just the central 
Government that we're working with; we're also working with Provincial 
governments to make sure that people have--are inspired to believe that 
the state is in their interest.
    The point I'm making to you on this, Jim [Jim Axelrod, CBS News], is 
that there is a lot of work left to be done, don't get me wrong. If one 
were to look hard, they could find indications that--more than 
indications, facts that show the government is learning how to function. 
People say we need an oil revenue sharing law. I agree with that; that 
needs to be codified. However, there is oil revenue sharing taking 
place, is my point. There's a lot of work to be done, and the 
fundamental question facing America is, is it worth it? Does it matter 
whether or not we stay long enough for a ally in this war against 
radicals and extremists to emerge? And my answer is, it does matter. 
Long-term consequences will face our country if we leave before the job 
is done. How the troops are configured, what the deployment looks like 
will depend upon the recommendations of David Petraeus.
    David [David Gregory, NBC News].

National Economy/Home Loan Industry/Financial Literacy

    Q. Mr. President, I want to get your thoughts about the volatility 
in the financial markets, but specifically, a series of questions. Do 
you think that housing prices will continue to fall? Do you think that 
the inability of people to borrow money the way they used to is going to 
spill over into economy generally? And what are you prepared to do about 
it? And specifically, are you considering some kind of government 
bailout for people who might lose their homes?
    The President. David, I'm wise enough to remind you that I'm not an 
economist, and that I would ask you direct predictions and forecasts 
about economic matters to those who make a living making forecasts and 
predictions. I suspect you'll find, ``on the one hand; on the other 
hand,'' in how they predict. [Laughter]
    Now, what I focus on are the fundamentals of our economy. My belief 
is that people will make rational decision based upon facts. And the 
fundamentals of our economy are strong. I mentioned some of them before. 
Job creation is strong; real after-tax wages are on the rise; inflation 
is low. Interestingly enough, the global economy is strong, which has 
enabled us to gain more exports, which helped the second-quarter growth 
numbers to be robust at 3.4 percent.
    Another factor one has got to look at is the amount of liquidity in 
the system. In other words, is there enough liquidity to enable markets 
to be able to correct? And I am told there is enough liquidity in the 
system to enable markets to correct. One area where we can help 
consumer--and obviously anybody who loses their home is somebody with 
whom we must show enormous empathy.
    The word ``bailout,'' I'm not exactly sure what you mean. If you 
mean direct grants to homeowners, the answer would be no, I don't 
support that. If you mean making sure that financial institutions like 
the FHA have got flexibility to help these folks refinance their homes, 
the answer is yes, I support that.
    One thing is for certain, is that there needs to be more 
transparency in the--in financial documents. In other words, a lot of 
people sign up to something they're not exactly sure what they're 
signing up for. More financial literacy, I guess, is the best way to put 
it. We've had a lot of really hard-working Americans sign up for loans, 
and the truth of the matter is, they probably didn't fully understand 
what they were signing up for. And therefore, I do believe it's a proper 
role for Government to enhance financial education initiatives. And 
we're doing that; we've got money in the budget to do that.
    Let's see here----

Housing Market

    Q. Can I just ask one followup, sir? Come on. [Laughter]
    The President. Sure.
    Q. Because you weren't this circumspect when you were talking to 
reporters yesterday about the economy.
    The President. How do you know? You weren't there, David.
    Q. Well, you're right, I wasn't, but----

[[Page 1061]]

    The President. I'm curious to know why you weren't there. Ask Baker 
[Peter Baker, Washington Post], he was there. [Laughter]
    Q. Only economics reporters were allowed.
    The President. I think I pretty much said the same thing yesterday, 
in all due respect.
    Q. What's going on in the housing market, is it a correction or a 
crisis, in your view? Can you assess that?
    The President. Yesterday I did comment upon that, that there was a--
I talked about the different scenarios that I had been briefed on about 
whether or not there would be a precipitous decline in housing or 
whether it would be what one would call a soft landing. And it appeared 
at this point that it looks we're headed for a soft landing. And that's 
what the facts say.
    Thank you. Mike [Michael Emmanuel, FOX News].

Iran-Iraq Meeting/Iran

    Q. Mr. President, thank you. There is more evidence of Iranian 
weapons ending up in Iraq and ultimately killing U.S. troops. And I'm 
wondering today, sir, if you have a message to the regime in Tehran 
about these weapons ending up in Iraq and obviously doing harm to 
American citizens?
    The President. One of the main reasons that I asked Ambassador 
Crocker to meet with Iranians inside Iraq was to send the message that 
there will be consequences for people transporting, delivering EFPs, 
highly sophisticated IEDs that kill Americans in Iraq. Prime Minister 
Maliki is visiting in Tehran today. His message, I'm confident, will be, 
``Stabilize; don't destabilize.'' And the sending of weapons into Iraq 
is a destabilizing factor. That's why we--yes, we've sent the message 
Peter here and in that meeting.
    Holly [Holly Rosenkrantz, Bloomberg News].

Fannie Mae and Freddie Mac Corporations

    Q. Sir, getting back to the credit crunch caused by defaults of 
subprime mortgages, should Fannie Mae and Freddie Mac be allowed to buy 
mortgages beyond their current limits or play any additional role that 
could help revive mortgage finance?
    The President. As you know, we put up a robust reform package for 
these two institutions, a reform package that will cause them to focus 
on their core mission, first and foremost; a reform package that says, 
like other lending institutions, there ought to be regulatory oversight. 
And therefore, first things first when it comes to those two 
institutions. Congress needs to get them reformed, get them streamlined, 
get them focused, and then I will consider other options.
    Baker.

Guantanamo Bay Detainees

    Q. Thank you, sir. A two-part question. The New Yorker reports that 
the Red Cross has found the interrogation program in the CIA detention 
facilities used interrogation techniques that were tantamount to 
torture. I'm wondering if you have read that report, and what your 
reaction to it is? And the second part of the question is, more than a 
year ago, you said that you wanted to close the detention facility at 
Guantanamo, and a year later, nothing has actually happened in that 
regard. Your Vice President, Attorney General, and Homeland Security 
Secretary are reported to be resisting such a move. I wonder if you 
could tell us who's really in charge on this issue, are you doing 
anything about it, do you expect Guantanamo to be open or closed when 
you leave office?
    The President. I did say it should be a goal of the Nation to shut 
down Guantanamo. I also made it clear that part of the delay was the 
reluctance of some nations to take back some of the people being held 
there. In other words, in order to make it work, we've got to have a 
place for these people to go. I don't know if you noticed a resolution 
of the Senate the other day, where all but three Senators said we don't 
want these prisoners in the country. I don't know if it was a 97-3 vote, 
but it was something-to-3 vote. In other words, part of the issue, 
Peter, is the practical issue of what do we do with the people? And you 
say nothing has taken place. I strongly disagree with that. First of 
all, we are working with other nations to send folks back. Again, it's a 
fairly steep order. A lot of people don't want killers in

[[Page 1062]]

their midst, and a lot of these people are killers.
    Secondly, of course, we want to make sure that when we do send them 
back, they're treated as humanely as possible. The other issue was 
whether or not we can get people to be tried. One of the things I'm 
anxious about, want to see happen, is that there to be trials. Courts 
have been involved with deciding how to do this, and Defense is trying 
to work out mechanisms to get the trials up and running. And the sooner 
we can get that up and running, the better it is, as far as I'm 
concerned. I don't want to make any predictions about whether Guantanamo 
will be available or not. I'm just telling you it's a very complicated 
subject.
    And I laid out an aspiration. Whether or not we can achieve that or 
not, we'll try to. But it is not as easy a subject as some may think on 
the surface. Again, I refer to you to the Senate vote. When asked 
whether or not you want to shut down Guantanamo and, therefore, receive 
some of those prisoners in your home State, there didn't seem to be a 
lot of support for it. Like, three people said, ``It's okay by me,'' in 
the Senate.
    Your other question, sir?

International Committee of the Red Cross Report on the Treatment of 
Prisoners of War

    Q. Red Cross report?
    The President. I haven't seen it. We don't torture.
    Yes, Jim [Jim Rutenberg, New York Times].

Iran-Iraq Meeting/Iran

    Q. Thank you, Mr. President. I'd like to pivot off of what you were 
talking about earlier, with Prime Minister Maliki's visit to Iran. 
Reports out of Iran today, out of Iran, say that Prime Minister Maliki 
told President Ahmadi-nejad that he appreciated Iran's positive and 
constructive stance. The pictures from the visit are very warm. I'm 
wondering, do you and your Iraqi counterparts see eye to eye on Iran? 
And what kind of message do those images send to your allies in the 
region and Americans who are skeptical about the Prime Minister's role?
    The President. Jim, I haven't seen the reports. Before I would like 
to comment upon how their meetings went, I would like to get a readout 
from our Embassy, who, of course, will be in touch with the Prime 
Minister and get his readout. And so it's a--you're asking me to be a 
little speculative on the subject. I haven't seen the picture.
    Look, generally the way these things work is you try to be cordial 
to the person you're with, and so you don't want the picture to be kind 
of, you know, duking it out; okay, put up your dukes. That's an old 
boxing expression. [Laughter]
    Q. Once more, please?
    The President. And so, I don't know, Jim. You've obviously followed 
this a lot. You've seen the reports. I'm sure you're confident that what 
you've asked me is verifiable. I'm not surprised that there's a picture 
showing people smiling.
    Q. However----
    The President. Let me finish, please. And so it's a--anyway, let me 
get the facts on what happened. Now if the signal is that Iran is 
constructive, I will have to have a heart to heart with my friend, the 
Prime Minister, because I don't believe they are constructive. I don't 
think he, in his heart of heart, thinks they're constructive either. Now 
maybe he's hopeful in trying to get them to be constructive by laying 
out a positive picture. You're asking me to speculate.
    Should I be concerned of a picture--should the American people be 
concerned about Iran? Yes, we ought to be very concerned about Iran. 
They're a destabilizing influence. They are a Government that has--its 
declared policy is very troubling, obviously, when they announce--when 
Ahmadi-nejad has announced that the destruction of Israel is part of its 
foreign policy.
    That's something, obviously, we cannot live with. They have 
expressed their desire to be able to enrich uranium, which we believe is 
a step toward having a nuclear weapons program. That, in itself, coupled 
with their stated foreign policy, is very dangerous for world stability. 
They are funders of Hizballah. Hizballah is intent upon battling forces 
of moderation. It's a very troubling nation right now.

[[Page 1063]]

    Iran can do better. The Government is isolating its people. The 
Government has caused America and other nations, rational nations, to 
say, ``We will work together to do everything we can to deny you 
economic opportunity because of the decisions you are making.'' My 
message to the Iranian people is, you can do better than this current 
Government; you don't have to be isolated; you don't have to be in a 
position where you can't realize your full economic potential. And the 
United States of America will continue to work with our friends and 
allies in the Security Council and elsewhere to put you in a position to 
deny you your rightful place in the world, not because of our intention, 
because of your Government's intention.
    So it is a very--it's a difficult issue, Jim. And American people 
should be concerned about Iran. They should be concerned about Iran's 
activity in Iraq, and they ought to be concerned about Iran's activity 
around the world.

Iraq/Iran

    Q. In your previous conversations with Prime Minister Maliki, have 
you been confident that he shares your view on Iraq?
    The President. On Iran?
    Q. Yes.
    The President. Yes. He knows that weaponry being smuggled into Iraq 
from Iran and placed in the hands of extremists over which the 
Government has no control, all aimed at killing innocent life, is a 
destabilizing factor. He absolutely understands that.
    I don't know if you saw yesterday, there was a--we talked to General 
Petraeus, or I talked to General Petraeus and Ambassador Crocker 
yesterday. I noticed in the papers today there was a description of a 
military operation that took place in Sadr City. The military operation 
in Sadr City was going after extremist elements, Shi'a extremist 
elements. And it was a very robust operation. Obviously, it--well, I 
shouldn't say obviously--it was done with the full understanding of the 
Maliki Government.
    Now, I don't know whether this extremist element had been fueled by 
Iran, but I do know that Maliki is committed against extremist elements 
who are trying to create enough chaos and confusion that this young 
Government and young democracy is not able to progress. So the first 
thing I looked for was commitment against the extremists. The second 
thing is, does he understand with some extremist groups there is 
connections with Iran, and he does. And I'm confident.
    Now, is he trying to get Iran to play a more constructive role? I 
presume he is. But that doesn't--what my question is--well, what my 
message to him is, is that when we catch you playing a nonconstructive 
role, there will be a price to pay.
    Let's see here, Mark [Mark Smith, Associated Press Radio].

Tax Reform

    Q. Mr. President, are you considering a plan to cut corporate taxes? 
Do you believe America's corporations are not making enough money these 
days?
    The President. Actually, we had an interesting discussion on this 
subject. And if you read carefully the penetrating report by the 
financial reporter--kind of like semi-financial reporter--[laughter]--
you'll find that it was--I was talking about an idea that has begun to 
surface as a result of meetings being held at the Treasury Department.
    And the whole reason to look at corporate rates is to determine 
whether or not they make us less competitive in a global economy. And if 
so--in other words, if the conclusion is, is that our tax structure 
makes it harder for businesses to compete, therefore making it harder 
for people to find work over time, then we need to address the 
competitive imbalance in our Tax Code.
    I also made it clear that we're at the very early stages of 
discussion and that, in my own judgment, anything that would be 
submitted to Congress--if submitted at all--would have to be revenue 
neutral. And therefore, what we'd really be talking about is a 
simplification of a very complex Tax Code that might be able to lower 
rates and, at the same time, simplify the Code, which is, like, 
shorthand for certain deductions would be taken away--in other words, 
certain tax preferences in the Code.
    My view all along has been, the more simple the Code, the better--
whether it be in the individual income tax side or the corporate tax 
side. However, I would readily

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concede to you this is a difficult issue, because the reason there is 
tax preferences in the first place are there are powerful interests that 
have worked to get the preference in the Code. And as I remarked to the 
distinguished group of writers I was talking to yesterday, it's much 
easier to get something in the Code than get it out of the Code.
    But I do think it's in the interests to constantly evaluate our 
competitive advantages and disadvantages. And what Hank Paulson told me 
was that there's a lot of folks who really believe the Tax Code creates 
a competitive disadvantage, and therefore, it's certainly worth looking 
at.
    Q. On the subject of tax preferences, what about carried interest? 
Do you think that taxing those at capital gains rates is fair? A lot of 
people think it's not.
    The President. First of all, I think, Mark, that what ends up 
happening is that in trying to deal with one particular aspect of 
partnerships is that you end up affecting all partnerships. And 
partnerships are an important vehicle to encourage investment and 
capital flows; they've been important vehicles to encourage the 
entrepreneurial spirit. In other words, small businesses have been 
organized as limited partnerships. So we're very, very hesitant about 
trying to target one aspect of limited partnerships for fear of the 
spillover it'll have in affecting small-business growth. So we don't 
support that.
    Ann [Ann Compton, ABC News].

Cooperation With Congress/Legislative Agenda

    Q. You've been clear about saying that you will veto overspending by 
Congress when they come back next month to do appropriations bills. 
You've also been clear you don't want to raise taxes. Can you do justice 
to the kind of programs the Government needs for bridges, for housing, 
and also continue to spend as much as you do in the war in Iraq?
    The President. One can meet priorities if they set priorities. The 
problem in Congress is they have trouble actually focusing on 
priorities. Appropriators take their title seriously, and they all feel 
like they got to appropriate, which means there's a myriad of 
priorities. So the role of the President, it seems to me, is to help 
Congress focus on that which is important. We have a debate over that 
which is important, of course, but one thing that we shouldn't have a 
debate over is whether or not it's important to fund our troops in this 
war against radicals, extremists, the war on terror. And I think we'll 
be able to get that kind of cooperation. I would hope that they would 
get the defense bill to my desk as quickly as possible.
    Part of my concerns, of course, is that there are different sets of 
priorities in both bodies. And it seems like to me that the Congress 
needs to come together, solve their differences--solve their differences 
first, and then bring them to the White House and see if we can find 
accommodation. I have proven in the past though, Ann, that one is able 
to set priorities--keep taxes low, grow the economy--and reduce the 
deficit. In other words, we have cut taxes, causing economic growth, 
which caused there to be this year alone 187 billion more tax dollars 
coming into the Treasury; the deficit is reduced to 1.5 percent of GDP, 
which on a 40-year historical average is very low, or is low, below the 
average; and we've proven that you can set priorities and meet 
obligations. And so the Congress needs to learn to do that itself.

Congressional Support for the U.S. Armed Forces

    Q. But you're confident that you can continue to sustain the kind of 
level of spending that you've invested in, in Iraq?
    The President. I would certainly hope so, because when you say, 
sustain the level of spending, you're mainly talking about making sure 
our troops have what it takes to do the job we've asked them to do. I 
know there's a lot of Members who don't agree with the decisions I've 
made. I would certainly hope they would agree, however, that once 
someone is in combat or in harm's way, that they get the full support of 
the Federal Government. That's exactly what their families expect, and 
that's what the Commander in Chief expects as well.

I. Lewis Libby/Attorney General Alberto R. Gonzales/Congressional 
Priorities

    Q. Mr. President, I wanted to ask you about accountability. You're a 
big believer in

[[Page 1065]]

it; you've talked about it with regard to the public schools. But given 
the performance of Iraqi leaders, given your decision to commute the 
sentence of Lewis Libby, you've also stood by the Attorney General 
recently--there have been a lot of questions about your commitment to 
accountability. And I'm wondering if you could give the American people 
some clear examples of how you've held people accountable during your 
Presidency?
    The President. Lewis Libby was held accountable. He was declared 
guilty by a jury, and he's paid a high price for it.
    Al Gonzales--implicit in your questions is that Al Gonzales did 
something wrong. I haven't seen Congress say he's done anything wrong. 
As a matter of fact, I believe, David [David Greene, National Public 
Radio], we're watching a political exercise. I mean, this is a man who 
has testified; he's sent thousands of papers up there. There's no proof 
of wrong. Why would I hold somebody accountable who has done nothing 
wrong? I mean, frankly, I think that's a typical Washington, DC, 
assumption. Not to be accusatory--I know you're a kind, open-minded 
fellow--but you suggested holding the Attorney General accountable for 
something he did wrong.
    And as a matter of fact, I would hope Congress would become more 
prone to deliver pieces of legislation that matter, as opposed to being 
the investigative body. I mean, there have been over 600 different 
hearings, and yet they're struggling with getting appropriations bills 
to my desk.

The Presidency/War on Terror in Iraq

    Q. If I could follow--sorry. Given the decision to commute the 
sentence of Libby and given the performance of Iraqi leaders, is it fair 
for people to ask questions about your commitment to accountability?
    The President. I would hope people would say that I am deliberate in 
my decisionmaking; I think about all aspects of the decisions I make; 
and I'm a fair person.
    Back to Iraq, no question they haven't made as much progress as I 
would have hoped. But I also recognize how difficult the task is. And I 
repeat to you the fundamental question is, does it matter whether or not 
there is a self-governing entity that's an ally in the war on terror in 
Iraq? Does it matter? Does it matter to a guy living in Crawford, Texas? 
Does it matter to your children? As you know from these press 
conferences, I have come to the conclusion that it does matter. And it 
does matter because enemies that would like to do harm to the American 
people would be emboldened by failure.
    I recognize there's a debate here in America as to whether or not 
failure in Iraq would cause there to be more danger here in America. I 
strongly believe that's the case. It matters if the United States does 
not believe in the universality of freedom. It matters to the security 
of people here at home if we don't work to change the conditions that 
cause 19 kids to be lured onto airplanes to come and murder our 
citizens.
    The first question one has to ask on Iraq is, is it worth it? I 
could not send a mother's child into combat if I did not believe it was 
necessary for our short-term and long-term security to succeed in Iraq. 
Once you come to the conclusion that it's worth it, then the question 
you must ask is, how difficult is the task of a young democracy 
emerging? Those who study the Articles of Confederation would recognize 
that there are difficult moments in young democracies emerging, 
particularly after, in this case, tyrannical rule.
    That's not to say that, Dave, we shouldn't be pushing hard for all 
opportunities for reconciliation. But for those of us who believe it's 
worth it, we'll see progress. For those who believe it's not worth it, 
there is no progress. And that's going to be the interesting debate. And 
what it's going to come down to is whether or not the United States 
should be in Iraq and in the region in a position to enable societies to 
begin to embrace liberty for the long term. This is an ideological 
struggle.
    Now, I recognize some don't view it as an ideological struggle, but 
I firmly believe it is an ideological struggle. And I believe it's a 
struggle between the forces of moderation and reasonableness and good 
and the forces of murder and intolerance. And what has made the stakes 
so high is that those forces of murder and intolerance have shown they 
have the capacity to murder innocent people in our own country. I put 
that in the context of accountability.

[[Page 1066]]

    In the case of Iraq, it's a lot more complicated than just the 
passage of four laws, even though I would hope they would get the four 
laws passed. But again, I repeat the threshold question, does it matter; 
does it matter to our security here at home? And the answer is, 
absolutely, it does. It does. And then the second question really for a 
lot of Americans is, can we succeed? And, in my mind, the answer to that 
is, absolutely; not only we must succeed, we can succeed.
    Listen, thank you all for your time. I appreciate it.

Note: The President's news conference began at 10:33 a.m. in the James 
S. Brady Press Briefing Room at the White House. In his remarks, he 
referred to Secretary of Transportation Mary E. Peters; Gen. David H. 
Petraeus, USA, commanding general, Multi-National Force--Iraq; U.S. 
Ambassador to Iraq Ryan C. Crocker; Prime Minister Nuri al-Maliki of 
Iraq; President Mahmud Ahmadi-nejad of Iran; and I. Lewis Libby, former 
Chief of Staff to the Vice President. He also referred to H.R. 2272, the 
America COMPETES Act. A reporter referred to Republican Presidential 
candidate Mitt Romney.