11:58 A.M. EST

 

 

MR. CARNEY:  Good afternoon.  Thanks for being here.  Or good morning still, right?  Just barely.  Good day, ladies and gentlemen.

 

As you know, the President, not long from now, will be heading to Virginia where he will meet with a family that is one of the many, many thousands of families that submitted their stories to #My2K — part of that effort to explain what tax cuts for the middle class would mean for them.  There is a document available online that lays out what raising taxes on the middle class would do to Virginians.

 

On January 1st, as you know, income taxes are scheduled to go up for 2.9 million middle-class Virginia families.  And tax cuts, such as the expanded child tax credit, the 10 percent tax bracket, marriage penalty relief, and the American Opportunity Tax Credit would all expire.  If Congress fails to act, every American family’s taxes will automatically increase, including the 98 percent of Virginia families who make less than $250,000 a year and the 97 percent of American small businesses that earn less than $250,000 a year.

 

A typical Virginia family of four earning $86,000 could see its income taxes rise by $2,200.  That’s, in the President’s view, unacceptable.  To do that to 98 percent of the American people because of an insistence that the wealthiest Americans get a tax cut would be profoundly wrong and profoundly bad policy.  It would have a negative impact on those families across the country and a negative impact on the economy.  

 

So the President will, as he has done consistently, urge the House of Representatives to take action, to follow the Senate’s lead to extend tax cuts next year for 98 percent of the American people, and by doing so, to take a significant step towards dealing with the fiscal cliff.

 

With that, I’ll take your questions.  Ben.

 

Q    Thank you, Jay.  Regarding the phone call between the President and the Speaker of the House, how would you characterize it?

 

MR. CARNEY:  I wouldn’t characterize it.  As I’ve said before, I’m not going to give readouts of phone calls and conversations and meetings.  Our interest here is in working with Congress, working with numerous stakeholders towards the goal of achieving a compromised deal that averts the fiscal cliff and does the important work of putting together a balanced package that achieves $4 trillion in deficit reduction.  

 

The President spoke with Speaker of the House Boehner as he has in the past and as he will in the future.  But beyond that I don’t have a characterization.

 

Q    Last week there had been a report, which it sounds like you disputed at the time, that the last call was curt, and a different characterization in the length of the call were not even to the point where you could —

 

MR. CARNEY:  I don’t have a characterization to dispute today, so I won’t.

 

Q    It was curt.  (Laughter.) 

 

MR. CARNEY:  Okay, I applaud that.  That was good.

 

I honestly have no — nothing more to offer except to confirm that there was a phone conversation.

 

Q    From the view of the White House, can you say where we are?  I ask because Cantor said yesterday that we’re nowhere, and there’s a sense — there’s at least a sense in this town right now that talks are not going well or that there aren’t talks.  Obviously, the Speaker and the President spoke, but in a broad sense for the public can you give us an update about where we are?

 

MR. CARNEY:  I’ll say a few things about that.  First of all, I think in my briefing yesterday, the sense of — the consensus here was the fact that I couldn’t report a conversation between the Speaker of the House and the President of the United States was proof that talks were nowhere; as you know, shortly after that, we were confirming a talk between the President and the Speaker.

 

However, it is our view that simply having conversations with congressional leaders will not produce a deal.  What will produce a deal is an acknowledgement by Republicans, Republican leaders, that rates on the top 2 percent — the wealthiest Americans — have to rise.  There is no deal without that acknowledgement and without a concrete, mathematically sound proposal around which both sides can come together and get this done.

 

Now, the fact is, conversations continue.  Lines of communication remain open between the White House and Congress.  Multiple other conversations and communications continue to occur as we press for an agreement.  And I would simply note if you take a step back that in the wake of the election we have seen an acknowledgement by Republicans of all kinds — including Republican leaders — that revenue has to be a part of this.  We acknowledged at the time that that was progress; we do to this day acknowledge that that is progress.

 

Since then, we have seen increasing numbers of Republicans, including elected lawmakers, acknowledge that raising rates is going to have to be part of this, and we welcome that acknowledgement.  That’s progress.  

 

But we’re not there yet.  What we don’t have is a specific, concrete proposal from Republicans on the revenue side to discuss one that recognizes that rates have to go up, and one that recognizes that in order to achieve the $4 trillion deficit-reduction package that the President seeks and that every bipartisan commission says we need to achieve the goal of putting our economy on a sustainable fiscal path requires a certain size of revenue to make it balanced and fair.

 

Q    One question on Governor Christie’s meeting today with the President.  The Democrats on the Hill have said that the White House is pushing a supplemental in the range of $50 billion to help states that have suffered with — through the storm.  Governors in the region, including Christie, want more than that, maybe in the range of $80 billion.  Can you describe the nature of this conversation between the two leaders?  And also, what the White House is basing its figures on?

 

MR. CARNEY:  I’ll say a couple of things.  First of all, Governor Christie had a meeting with Chief of Staff, Jack Lew; with OMB acting director, Jeff Zients; with Deputy Chief of Staff Alyssa Mastromonaco, and other senior members.  Prior to that meeting he did meet with the President.  I’m not going to 

— I don’t have a read out for you of the meeting.

 

The President is very focused, as you know, and has directed his administration to be very focused on assisting New Jersey, New York, other affected states in their recovery efforts.  And we have obligated more than $2.3 billion to support response and recovery efforts, and that includes $1 billion already approved in direct assistance to thousands of individuals affected by the storm.  

 

We are working on a request, but that request is still being developed.  And I don’t have numbers for you and I’m not going to speculate on what that request will look like.  We continue to hope that we’ll have that request sent up soon.  

 

Yes.

 

Q    Just to follow up probably on both those questions.  On the meeting with Governor Christie — but did the President make a commitment that he would in fact provide a certain amount of — a specific amount of aid in his discussions?

 

MR. CARNEY:  The request is still being worked on and still being developed, so I don’t have a number for you.

 

Q    Okay.  And on the conversation between the President and Speaker Boehner — no readout, obviously, but can you at least give a sense of — have both sides agreed effectively to impose a media blackout on these kinds of calls because of the sensitive nature of what they’re dealing with?

 

MR. CARNEY:  Well, I can’t speak for the Speaker’s office or the Speaker.  And it’s not a media blackout.  Look, I understand; I sat among you for a long, long time, and I know there is intense interest in this process.  The only reason not to read out every phone call and leak every proposal is because we believe it’s in the interest of achieving an agreement not to do that, and I’ve said that all along.

 

We’re trying to be helpful.  We have been very specific in what our proposals are, what the numbers say.  We had Jason Furman here, Principal Deputy Director of the National Economic Council with me yesterday who briefed you in detail about why proposals that purport to be able to achieve sizable revenues just by cutting — limiting deductions and closing loopholes upon further inspection don’t actually achieve that in a plausible way, which is why rates have to — rising rates for the wealthiest Americans have to be part of this.

 

So we’re being I think very clear about what our proposals are.  We’ve been specific.  But in our negotiations and our discussions, we’re trying to actually get to a deal, and we’ll continue to do that.

 

Q    Did the President and Speaker Boehner agree on — or schedule a face-to-face meeting? 

 

MR. CARNEY:  I have no announcements of meetings or phone calls to make and no characterization of the contents of the phone call.

 

Ann.

 

Q    Yesterday, Secretary Geithner said that absolutely the administration would follow through and head over the cliff if there isn’t agreement on that upper tax rate.  Is that — does that leave the impression that going over the cliff is an acceptable alternative to the President? 

 

MR. CARNEY:  Well, it’s a misimpression I think if you have it.  The Secretary of the Treasury simply reiterated what the President and I and others have said, which is that the President won’t accept a bad deal.  He will not accept a deal that doesn’t include rates rising for the top 2 percent.  

 

This is a debate that we had at length for more than a year.  It’s something that he’s been enormously clear about.  And his insistence on that is based on sound policy, not on a simple desire to have rates to go up.  It’s because we need that to happen as part of a balanced package that achieves this $4 trillion deficit-reduction goal.

 

And that’s an important number because the whole — again, deficit reduction in and of itself is not the goal here.  The reason to get our fiscal house in order, the reason to pass a deficit-reduction package that is balanced and allows for economic growth and job creation is to put our economy on a sustainable fiscal path, which then itself produces positive economic benefits and growth and jobs.  And that’s why that $4 trillion — roughly that $4 trillion figure is so important.  

 

And in order to get to $4 trillion, you need to look at the components, the legs of the stool.  And we’ve talked about that:  discretionary spending cuts — signed a trillion dollars’ of those into law.  Revenues have to be part of this — the President has put forward a very specific proposal for $1.6 trillion in revenues.  Entitlement reforms need to be a part of it.  Savings gleaned from our health care entitlements and other entitlement programs need to be a part of it.  The President has been specific about that.  And then, of course, the positive impact of reduced-interest payments contribute to an overall deficit-reduction package.

 

The size of the package matters.  The components of the package matter.

 

Q    And when the President yesterday said that he would not “play that game” next year with the debt ceiling, he stopped short of saying that he would insist on an agreement now as part of the — of a fiscal cliff deal.  And he also didn’t seem to indicate that he would like to have the authority to handle debt ceiling in the future.  Is he backing off of either of those?

 

MR. CARNEY:  Not at all.  We think that would be — Secretary Geithner made that clear when he presented the proposal.

 

Q    But the President didn’t in his remarks to the Business Roundtable.

 

MR. CARNEY:  The President, as he said and announced to you all, was speaking off the cuff; he wasn’t reading from a prepared text.  But that is our proposal — that we end this hostage-taking cycle by taking up Senator McConnell’s proposal that was enacted into law as part of the Budget Control Act, and moving it forward so that we do not engage in a process where members of Congress are threatening to default on the full faith and credit of the United States in order to achieve their objectives.  

 

And I heard somebody talking about a proposal where we should do this every month — was this Grover Norquist?  I think that’s just a profoundly bad idea that I think could not be more frightening for American businesses and American workers.

 

Julianna.

 

Q    Just to follow up on that — would the President veto a measure that would extend the tax rates for the middle class, let the rates for the top earners go up but didn’t deal with the debt ceiling?

 

MR. CARNEY:  I think I’ve said that we think it is entirely appropriate and expect Congress to deal with the debt ceiling as part of an end-of-the-year deal.  If they were to deal with it separately before the end of the year in a way that we find appropriate, that would also be fine with us.  I’m not going to speculate about how the package — how dealing with the debt ceiling in a responsible way, with no delay and no drama, takes place.  What the President insists on is that Congress do its job.  

 

One thing that I think is important — and I assume that at least some ordinary Americans out there are watching — when we talk about raising the debt ceiling, we’re not talking about spending.  Congress is simply authorizing itself to pay the bills that it incurred.  So if Congress wants to deal with spending, they ought to spend less.  And one way to do that is to engage in this process with the President, build a $4 trillion deficit-reduction package that includes both revenues and significant spending cuts, significant savings from our entitlement programs, and pass it.  And that would be a good and effective thing to deal with spending as well as our deficits.  

 

When you get a credit card bill you don’t just say, well, you know what, I’m sick of this, I’m not paying it anymore.  I mean, you can do that, but there will be significant consequences for your personal financial future.  Well, the United States of America, when it gets its bill for items it has purchased, pays those bills.

 

Q    But you have said that the President would veto any bill that did not extend — that let tax cuts for the wealthy expire.  So you’re not drawing that same line — on the veto threat with the debt ceiling?

 

MR. CARNEY:  Well, I think you’re confusing the process.  When we talk about a bill that has to do with tax rates, he won’t extend — he would veto a bill if it were to get to his desk — he would not sign a bill that extended tax rates for the wealthiest Americans.

 

Again, we believe that dealing with the debt ceiling ought to be part of this end-of-the-year package.  It ought to be done without delay and without drama.  If it’s done separately, that’s fine.  I think the easiest way, since we don’t have a lot of time, is to just get it done as part of an overall compromise.

 

Q    Can I just follow up on that?  Because I don’t — when he says “I won’t play that game,” what role does he have in the game?  In other words, it’s up to Congress to do this.  We know what —  

 

MR. CARNEY:  He is not going to provide — he’s not going to engage in a negotiation with Congress where members of Congress who seem to think it is helpful for the economy to threaten default in exchange for demands.  He’s not going to do that.  He’s not going to “play that game.”  I mean, you were there, Mara.  We were all there.  We saw what happened when this — when there were demands made that we will not — we’ll let the United States of America default if we don’t get this, this, and this.  And that’s just not the way to run the greatest economy in the world.

 

Q    But what leverage does he have to force Congress to do that, to raise the — 

 

MR. CARNEY:  I think we’ve talked a lot about the influences on our lawmakers.  And it would be not surprising to me if already the voices we have begun to be heard in the business community and elsewhere multiplied and multiplied, as well as the voices of ordinary Americans, if leaders in Congress actually seriously entertained doing that harm to our economy again at a political peak.  I can’t imagine they would want to do that.

 

Yes, Major.

 

Q    Senator McConnell makes the following two points on the ones you just made.  One, from the podium, there are times when you justifiably assert administration pride for the trillion dollars in spending cuts already achieved.  Senator McConnell points out historically that was not the original White House position in the context of the debt ceiling debate of last year; that that was a forcing mechanism.  And on the floor of the Senate, he said this morning — and I quote him directly — “Look, the only way we’ve ever cut spending around here is by using the debate over the debt limit to do it.  Now the President wants to remove that spur to cut altogether.  I assure you it’s not going to happen.  The American people want us to fight to cut spending.  It’s a fight they deserve.  We’re happy to have it.”

 

MR. CARNEY:  Well, I appreciate that history lesson.  I would say that Republicans were in control of Congress for much of the time that President George W. Bush was in office, and they didn’t do a great job of controlling spending.  When President Clinton was here deficits were cut, surpluses were achieved.  Now, that was work with Congress as well by both Democratic and Republican leaders.

 

The fact of the matter is, the President has, for a long time now, had on the table the only balanced and specific proposal to achieve $4 trillion in deficit reduction.  We haven’t seen that from Republicans yet.

 

Q    But a trillion of that you count came from the fight over the debt ceiling.

 

MR. CARNEY:  So does Simpson-Bowles, so does every deficit reduction — I mean, when we started talking about $4 trillion in deficit reduction, it was prior to the passage of a trillion dollars in discretionary spending cuts.

 

Q    I’m not saying that the — Republicans make the point that the forcing mechanism, both politically and legislatively, was this debt limit debate.

 

MR. CARNEY:  You were engaged —

 

Q    And they, from their perspective, don’t necessarily consider it altogether as harmful as the administration does.  I’m just asking you to respond to that.

 

MR. CARNEY:  Well, I’m not sure what the question is.

 

Q    Why isn’t that a valid argument to continue to use the debt ceiling as a forcing mechanism to achieve spending cuts?

 

MR. CARNEY:  Well, I would ask American businesses, I would ask American workers whether they think that what happened in the summer of 2011 when Republicans — some with great enthusiasm — threatened to have the United States default for the first time in its history was worth the price paid.  I don’t think they would say it was, and we can’t do it again.

 

Q    On Syria, let me ask you one quick question.  Secretary of Defense Panetta said just this morning that we — meaning the United States government — “remain very concerned, very concerned,” he said again, “that as the opposition advances, in particular on Damascus, that the regime might very well consider the use of chemical weapons.”  This feels from a distance to be like something that is increasing in its urgency, and there’s a sense perhaps that there’s more intelligence than there was the last time you addressed this.  Can you give us a sense of any heightened level of concern or closing window about whether these chemical weapons might be used?  And do you think it’s — and can you tell us anything about the sense the administration has about how it might be changing the minds in Moscow?

 

MR. CARNEY:  Well, it’s certainly an issue that we discuss with the Russians and others; those who have influence over the Assad regime or communication with the Assad regime.  I can tell you that the President was very clear when he said that if the Assad regime makes the tragic mistake of using chemical weapons or fails to meet its obligation to secure them there will be consequences and the regime will be held accountable.

 

The international community — this goes to your question about the Russians — is united on this issue, and the message to the Assad regime about our red lines has been very clear.  I’m not going to get into specific intelligence.  

 

We continue to closely monitor Syria’s proliferation-sensitive materials and facilities.  And we remain focused on supporting the Syrian Opposition Council — Coalition, rather, and working with like-minded countries to determine what more we can do to support a political transition that brings the conflict of Syria to an end — in.

 

Q    This doesn’t feel or look to the administration any more urgent than it did, say, 48 hours ago?

 

MR. CARNEY:  Well, I think we’ve been very clear all week about our concern — well, probably longer than that, but since this has been a heightened — an issue that’s getting heightened attention, we have made clear I think in very stark terms our concern about it.  I wouldn’t want to characterize our assessments based on intelligence any more than that.

 

Q    Jay, you said a moment ago it was frightening for the Republicans to bring back the debt ceiling again and raise the specter of the nation defaulting.  Isn’t it frightening for the American people to hear the Treasury Secretary say we’re willing to go off the cliff?

 

MR. CARNEY:  The President of the United States will not sign a bill that extends tax cuts for millionaires and billionaires or for those making more than $250,000 a year.  This is an issue that the American people understand, they are very clear about, and if public surveys are to be believed, are supportive of the President on.  We can’t afford it.  He has made this very clear.

 

What he has also made clear is that Republicans in the House could act today to give tax cuts for 98 percent of the American people.  They won’t, or at least they have not because they insist that tax cuts for the top 2 percent are more important.  If they didn’t have that opinion, if they didn’t have that position, 40 of them could change their minds, the bill could be brought up, it could pass the House and uncertainty for 98 percent of the American people would go away on this issue.  Unfortunately, we haven’t seen that willingness.  

 

And again, the speciousness of the argument, that this is all about small businesses, has been debunked repeatedly.  It’s not.  And giving a tax cut for those who make under $250,000, as the President insists we do, would apply to 97 percent of small businesses in America, 98 percent of American earners.  So we have to do it.  

 

Q    But when you draw a line in the sand and you say there can’t be a deal without the tax situation being dealt with, you’re about emphasizing — and the President, in the comments to the Business Roundtable not emphasizing the spending cut side of this that the Republicans are pressing — and to use your credit card analogy, when you say, well, if you’re in credit card debt you’ve got to pay your bills — if you’re $16 trillion in credit card debt, you also have to stop taking out more credit cards, right?  So that’s — to Major’s question, the Republicans are saying, unless they bring up this debt ceiling thing and have that out there, you’re not going to cut spending; you’re just going to keep — the debt limit goes higher and you keep spending more money, you and Congress both.

 

MR. CARNEY:  Well that’s false.  That’s simply false.  The President has put forward a very specific deficit reduction plan. And let’s talk about cuts, okay?  The President signed into law a trillion dollars in discretionary spending cuts.  The President has a specific proposal to achieve $600 billion in savings from our entitlement programs, including our health care entitlement programs.  And he has been constant and explicit in making the point that he understands that as part of a negotiation and as part of reaching a deal that he is going to have to make tough choices on spending, and he is absolutely willing to do that.  He knows that he will have to do that.  But it requires the Republicans to acknowledge the simple fact and to act on the simple fact that rates are going up for the wealthiest Americans.

 

It is simply not acceptable to hold 98 percent of the country hostage in order to — on the proposition that folks making more than $250,000 absolutely have to have another tax cut.  We can’t afford it.  So when it comes to spending cuts, this President is deadly serious.  

 

Again, I want to go back to what I talked about before — the purpose here is to achieve a $4 trillion package in deficit reduction.  It’s not only to create revenues for revenues’ sake; it is to — the goal here is deficit reduction.  One of the reasons why we can’t extend tax cuts — the principal reason why we can’t extend tax cuts for the wealthiest Americans is because we need to pay down our deficit.  

 

You saw what happened.  You were here in 2001, 2003 — tax cuts that were first — I mean, I covered the campaign; in 2000, we had to enact a tax cut of more than a trillion dollars, said the man who then became President, because we had surpluses, and that money should go back to the American people.  So that was one way of getting rid of our surpluses.  Then we had to, as the economy began to slow down, we had to give a tax cut because it would help the economy grow.  And then we did another one of over a trillion dollars.  

 

And the result of that and other policies, of putting two wars on a credit card and some of the other policy decisions that were made is that we took a situation in January of 2001 where we had record surpluses, and just eight years later we had record deficits.  When this President was sworn into office, he was handed a deficit of over a trillion dollars.

 

That’s not sound economic policy.  We can’t go down that road again.  We need to, for the sake of getting our deficits under control and assisting our economy, take the kind of action the President has proposed.

 

Q    Last question.  When you were being asked about Hurricane Sandy and Governor Christie being here, et cetera — and Governor Cuomo was around this week as well — you have people in New York and New Jersey who are saying, I understand that the administration can’t heal everyone overnight, but there are people in New York and New Jersey who are saying weeks later they still don’t have electricity; people are having — one guy had his house bulldozed — his house was still standing, it got bulldozed because of confusion.  People are still hurting.  They’re not — they still don’t have electricity, weeks later.  So for all the talk in Washington, how is it that some people still have not been helped?

 

MR. CARNEY:  Well, I would point you to the substantial and vast effort that the President oversaw in terms of the federal response to this terrible storm.  And I think that that effort by FEMA and other agencies — by the Department of Defense and the unprecedented action that the military took to assist in this effort has been documented and talked about.

 

There is no question, as the President saw when he was on Staten Island, that there is enormous suffering that continues, and that’s why we are working closely with states and localities to continue the effort to assist in the recovery and ongoing activities to mitigate the damage done by the storm, the damage done to people’s lives and to the economy in those states.  

 

But there is no question that some of the issues that you mentioned in terms of power and what sounds like maybe a mistake in terms of how — those are obviously local issues.  But this President has been very aggressive in pressing the leaders of his administration to cut through red tape, to act swiftly and aggressively in assisting New Jersey and New York and affected areas of Connecticut in dealing with what was unquestionably one of the worst storms that this country has ever endured.

 

Q    Is he satisfied with the federal response in —

 

MR. CARNEY:  He is focused on continued federal response, and he knows that our work is not done any more than the work in the states is done.

 

Q    None of this stuff angers him?

 

MR. CARNEY:  I think that the President is incredibly concerned about those who are still suffering the consequences of the storm.  That’s why he continues to have meetings on it regularly.  That’s why he continues to task his team to assist states and localities in the effort.  He’s focused on making sure that we’re doing everything we can to assist.

 

Mike.

 

Q    What does the departure of Senator DeMint say about the relative ascendancy or descendancy of the tea party in American politics?

 

MR. CARNEY:  I’ll leave that to you to analyze.  I just saw that report.

 

Q    Is there a reaction from the White House? 

 

MR. CARNEY:  I don’t have any, no.

 

Q    Does the President pledge — will the President stay in town through the course of these negotiations and not forgo any plans he might have to take a holiday vacation?

 

MR. CARNEY:  Well, I think that Congress has a strong role to play here.  What the issue is — we’ve said all along while we are getting closer and closer to the end of the year how we achieve a deal here is not that complicated and we still believe we can make it happen.  The President is focused very much on trying to make that happen.  But I wouldn’t want to speculate about what none of us hopes comes to pass, which is a lack of a deal.  We believe that we can get one if Republicans acknowledge and act on a fundamental fact, which is that rates are going up on the wealthiest Americans.

 

Q    The rates that you mentioned are 39.6 percent.  You talk about the Clinton rates and how the country prospered under them.  I’m going to ask this one more time.  

 

MR. CARNEY:  Sure.

 

Q    I know it’s been asked a million different ways.  Is 39.6 percent an essential benchmark?  Or is there wiggle room —

 

MR. CARNEY:  Since you ask that way — (laughter.) 

 

Q    I got you pinned down there.  (Laughter.) 

 

MR. CARNEY:  Look, you heard Jason Furman eloquently and elegantly go into detail about the issues that are problematic with proposals that purport to achieve significant revenues solely by closing loopholes and capping deductions.  The math doesn’t work — in some cases, the math doesn’t work and the middle class gets hammered, or the math works on paper but there’s no way that Congress is going to, for example, eliminate the charitable deduction for the top 1 percent because that would have a terrible impact on churches and universities and institutions that depend on charity.  I think, if I’m not mistaken, in citing one of the proposals from the think tank that we were discussing, Jason suggested that $10 billion in charitable deductions would be lost.  So that’s not likely to be passed by Congress by members of either party. 

 

The way to do this is the way that the President has presented.  You need both higher rates for the top 2 percent, tax cuts for the 98 percent, and proposals that close some loopholes and cap some deductions for those making over $250,000.  The combination achieves the kind of target in revenue that is necessary to have the balance in the overall plan.

 

Now, I’m not going to — I haven’t seen a plan that does that besides the President’s.  So far from the Republicans, we have a single sentence on revenue that says that $800 billion can be achieved through capping deductions and closing loopholes, but that’s it.  There’s no numbers.  There’s no specificity.  

 

The President has said he wants to have — he’s willing to see and look at proposals, but they have to add up.  They have to be politically feasible.  And the way to do this — it is far preferable, as Jason said, to allow rates to go up on the top 2 percent to the levels they were under Clinton when the top 2 percent did very well than to eliminate charitable deductions, or ask the middle class to have their taxes go up through the elimination or downsizing of the mortgage home interest deduction or health care deduction or state and local tax deduction. 

 

These are not — it’s easy to throw out proposals and suggest they might work, but then people who put the numbers on paper can show you why there are problems with alternative proposals, which is why the President believes rates — that his plan that allows those rates to go up, back to where they were under President Clinton is the right way to go.

 

Q    But the question is whether he is open for 37 or something over $250,000.

 

MR. CARNEY:  Again, you’re asking me to speculate about proposals that do not exist.  We have a plan that’s very specific and it’s pretty simple.  Republicans who haven’t disowned the pledge they made to Grover Norquist don’t have to vote for a tax hike or on rates.  They simply have to vote for a tax cut for 98 percent of the American people and let existing law for the top 2 percent stay in place.  That doesn’t seem like such a terrible thing to do.  It’s also absolutely the right thing to do as a matter of policy.  

 

So we encourage Republican leaders to hear the voices that are increasingly being heard from both their fellow lawmakers and others in the broader Republican community who acknowledge that this is the way the country needs to move.  Congressman LaTourette said I think yesterday, “the President has won this round relative to the rates, but we need you to sit down and get the second half of the deal, and that’s the spending.”  

 

The President could not agree more.  He also said, “Some people in this 2 percent who call me, they’re more worried about the fiscal cliff than about the rates going up a couple of points.”  I think that’s an excellent point.  And you’ve seen the numerous members of Congress, members of the Senate, business leaders and others who understand that the consequences of the fiscal cliff, the consequences of raising taxes on everyone, an average of $2,200 for the average family, are quite serious.  All we have to do here is extend those tax cuts to the middle class and allow the rates for the top 2 percent to go up, as we’ve been talking about now for weeks and months and years.

 

Q    Jay, going back to the storm recovery story, based on, as you put it, the President’s incredible concern, can you characterize any sense or urgency in getting this package together?  This has been in the works now for a number of weeks.

 

MR. CARNEY:  Well, like I said, we expect to have a request moved by the end of the week.  We’re hopeful.  

 

Q    By the end of the week.  And how long did the President meet with Governor Christie?

 

MR. CARNEY:  I don’t have a number of minutes.  It was a pre-meeting before Governor Christie met with Jack Lew, Jeff Zientz, Alyssa Mastromonaco and other senior staff.  But I don’t have a number — a minute count for you since I wasn’t —

 

Q    Was the conversation confined to the storm recovery?

 

MR. CARNEY:  I don’t know.

 

Q    Can you find out?  I mean, there are a lot of people — 

 

MR. CARNEY:  I’m not going to give a readout — 

 

Q    I’m not asking for a readout —

 

MR. CARNEY:  That is a readout.  

 

Q    No, it’s not.  I mean, there are a lot of people in that part of the world who are —

 

MR. CARNEY:  You’re asking for what they talked about — that’s, in normal parlance, unless I’m mistaken, that’s a readout.

 

Q    I’m not asking for quotes.  There are a lot of people up there who are very concerned about this.  There’s a great deal — 

 

MR. CARNEY:  As is the President.  And I’m sure — again, I wasn’t in the room.  I mean, I saw Governor Christie and I saw the President, but I didn’t participate in their conversation so I can’t tell you that they didn’t talk about other issues.  But I’m sure that they talked principally about this issue, which is of significance concerned to both men.

 

Q    That’s all I asked.

 

MR. CARNEY:  Well, you asked if they talked about other issues.

 

Q    Well, if they principally talked about this issue.  I mean it’s — 

 

MR. CARNEY:  I’m sure they did.

 

Q    It’s not like the fiscal cliff negotiations here.  (Laughter.)  This is just a matter of major interest to a lot of people.

 

MR. CARNEY:  Sure.  Well, they definitely talked about — I am confident they discussed the subject that was the reason why Governor Christie was here, which is — and to have the meeting with senior staff.

 

Q    Jay, can you confirm that Governor Pawlenty was also here today, or is here, and what he — 

 

MR. CARNEY:  I don’t know.

 

Q    You don’t know that he’s here?

 

MR. CARNEY:  I do not.  

 

Q    Okay.  And secondly, can we quickly revisit the debt ceiling question?  You were asked yesterday about whether the President would invoke executive power and the 14th Amendment.  Can you say that — 

 

MR. CARNEY:  And Peter, with lightning speed, dug up a quote that I thought would take at least a few hours to find.  (Laughter.)  Let me — 

 

Q    Have you found another one?  (Laughter.)  

 

Q    Can you say that the President has ruled that out as an option, or can you say whether there are discussions or studies underway?

 

MR. CARNEY:  Let me give you your answer.  I can say that this administration does not believe that the 14th Amendment gives the President the power to ignore the debt ceiling — period.

 

Q    Jay, two questions — 

 

MR. CARNEY:  Sorry, let me get to — 

 

Q    Is this the first time you all have said that?

 

MR. CARNEY:  I don’t believe so, no.  I think this is actually consistent with what we said last year.  I think there was a period where this was under discussion and maybe the quote you found was before it had been looked at in that level of detail.  But I believe when this was under discussion at the time, this is where we landed.

 

Q    So there was no further study after that?

 

MR. CARNEY:  Well, again, I can just tell you what our position is.

 

Q    Did you find that quote, Peter?  (Laughter.)  

 

MR. CARNEY:  After the briefing.  

 

Q    Thanks, Jay.  How is Secretary Geithner saying the administration is absolutely willing to go off the fiscal cliff dissimilar from, during the debt ceiling negotiations, some Republicans saying, don’t increase the debt ceiling, period?

 

MR. CARNEY:  Well, they’re wholly different things.  This is what is interesting, too, and I actually —

 

Q    They both have major consequences.

 

MR. CARNEY:  — I do believe that there are people even in Washington who don’t understand this, and, understandably, in the country who don’t understand that we are actually talking about polar opposite issues.  The fiscal cliff is not about deficits.  It’s about cutting spending and withdrawing money from the economy too quickly.  And that impact would be negative on the economy because — 

 

Q    But what about the fact that both have major economic consequences?

 

MR. CARNEY:  Well, again, the President is clear that — (cell phone rings) –(laughter.)  That is humiliating for Hans.  (Laughter.)  You guys have to — somebody has to find out who that is.  It’s a specialized ring.  (Laughter.)  

 

So where was I?  What were we talking about?  (Laughter.) 

 

Q    They both have major economic consequences.

 

MR. CARNEY:  They both have significant economic consequences.  I think there is nothing quite like the significance of defaulting on our full faith and credit for the first time in history.  We saw that even the threat of that had profoundly negative consequences in 2011.

 

Q    But this is a part — so how are they not — 

 

MR. CARNEY:  Let me continue.  Just because I think a lot of people may not understand the distinction here.  The fiscal cliff is a combination of tax hikes that would go into effect if Congress doesn’t act and across-the-board spending cuts that would go into effect if Congress doesn’t act and achieve spending cuts in a more refined way that would, economists say, have a negative impact on our economy.  But it would be basically too much deficit reduction too quickly.  And that’s —

 

Q    But both could send the economy into — would send the economy into recession.

 

MR. CARNEY:  I promise I will answer your question.  But I think — I bet there are — I’m certain there are people who are watching who don’t understand.  I saw a proposal by a governor today that seemed to confuse the issue that the fiscal cliff actually had to do with the problem of high deficits.  And it’s the opposite.  It is action — the absence of action here would result in significant tax hikes and across-the-board spending cuts that would have a negative impact on the economy because of the immediacy and the effect of them.

 

Q    But I’m talking —

 

MR. CARNEY:  Okay, so what Secretary Geithner was saying, as the President has said and as I have said and others, is that the President will not accept a bad deal.  He will not sign into law an extension of tax cuts for the wealthiest Americans.  We can’t afford it.  It’s bad policy.  Republicans know that.  This is not news.  We’ve been having this debate for years.  It was the number-one focus of debate in a presidential election that just ended.  

 

So again, I read you a series of — well, I could read many more that you know about and I know you’ve reported on a series of acknowledgements by Republicans, members of Congress and others, who acknowledge that the wealthiest are going to have to provide revenue in order to achieve — avert the fiscal cliff and to achieve sustained — deficit reduction of the size that we’ve talked about.  Rates are going to have to go up, as the President said.  This is simply a matter of Secretary Geithner repeating what the President said.  There is no deal without rates going up.

 

Q    I remember you standing there and saying that Republicans were playing chicken with the credit of the United States.  How is this not playing chicken with the health of the U.S. economy? 

 

MR. CARNEY:  Here’s the choice that Republicans have to make:  Give tax cuts to 98 percent of the people, or have taxes go up on everybody.  That doesn’t seem like the worst choice in the world, right?  Let’s extend tax cuts to the vast majority of the American people, and not refuse to give those tax cuts to the people because you insist that millionaires and billionaires and those making over $250,000 a year have to get another tax cut, too.  It’s just — it’s nonsensical.

 

And again, we’re not — members of Congress don’t even have to vote when it comes to rates for a tax hike.  They simply have to vote for a tax cut, and let the law, as it’s written, stay in place.

 

Q    And just lastly, Senate Minority Leader McConnell tried to get a vote yesterday on the Senate floor on the President’s deficit reduction proposal, and Senate Majority Leader Reid objected.  Do you think you — how much Democratic support do you feel you have for it in the Senate? 

 

MR. CARNEY:  Look, I understand that there’s a lot of — this is the kind of political games that aren’t serious.  It is absolutely the case that we need to have a serious proposal — I mean a serious negotiation about serious issues, spending cuts and the like that will require a compromise.  The fact that —

 

Q    Why is it a game to put the President’s plan on the floor?

 

Q    Yes, do you think you have Democratic support?

 

MR. CARNEY:  We know that the filibuster is —

 

Q    Why propose something you don’t have —

 

MR. CARNEY:  — is certainly an issue here, that we don’t have 60 votes in the Senate.  So I would not argue with the — 

 

Q    But do you have Democratic votes?

 

MR. CARNEY:  — idea that the President’s proposal cannot at this time, or has not at this time garnered Republican support.  That’s what this debate is about.  

 

Q    — garnered Democratic support?

 

MR. CARNEY:  We are very confident that Democrats support the principle that we need to have $1.6 trillion in revenue, asking the wealthy to pay more as part of a balanced package that the President has put forward —

 

Q    Well, why not have a vote to show the Republicans don’t want to —

 

MR. CARNEY:  I understand that you’re going along with the gamesmanship here.  We’re trying to be serious about these negotiations.  We’re trying to — we have put forward a proposal. We have seen no substantive counter-proposal, especially on revenues from Republicans. 

 

Q    Well, if that’s gamesmanship, then how is the President’s proposal not gamesmanship?

 

MR. CARNEY:  He didn’t say, here’s my proposal; take it or leave it.  He has been very explicit in saying we need to negotiate — 

 

Q    But he hasn’t counter-offered with something else that might garner more —

 

MR. CARNEY:  So you’re saying he should put forward a proposal, and then, absent a proposal from the Republicans, put forward another proposal?  And then, absent a proposal from the Republicans —

 

Q    They put forward a proposal. 

 

MR. CARNEY:  We’ve been through this.  It’s one sentence on revenue that has no meaning or substance behind it.  That’s not serious.  And it doesn’t meet the level of specificity or even come close to the level of specificity the President has put forward.

 

We have to have — we can’t have a vague promise of revenue in the future from the wealthy, and then concrete spending cuts that affect middle-class families, that affect seniors, that affect programs that are vital to a lot of Americans now, and say — because the result is what we’ve seen again and again and again:  The middle class gets hit with the bill.  Seniors bear the burden.  That’s not the way we’re going to do this.  That’s not the way the American people want us to do it.

 

Olivier. 

 

Q    Jay, I’ve got a couple on Afghanistan.  One, as you have the negotiations about a post-2014 possible presence, is immunity from prosecution something that this administration regards as a must-have?

 

MR. CARNEY:  I’ll have to take the question.  I haven’t had a discussion specifically on that lately.

 

Q    President Karzai today said that Afghanistan is more corrupt than ever before and says the United States and its allies are chiefly to blame.  Do you agree?

 

MR. CARNEY:  I would simply say that the issue of corruption is one of concern and has been in Afghanistan.  We share President Karzai’s concern about that and we work with the government of Afghanistan on this issue regularly.  But I’m not  — I don’t know — to make the comparison of where it is now compared to where it was — we know it’s a problem and has been a problem, and we continue to work with the government on that problem.

 

Q    Thank you, Jay.

 

MR. CARNEY:  Last one. 

 

Q    Can I just — on a foreign policy question on China.  Did the President have the opportunity to sign the letter by Nobel Laureates, which included some Peace Prize Laureates, to Xi Jinping calling for the release of Liu Xiaobo and Liu Xia?

 

MR. CARNEY:  I’ll have to take the question.

 

Q    Can you take that?

 

MR. CARNEY:  Yes.

 

Q    And get back to us?

 

MR. CARNEY:  Yes.

 

Peter.

 

Q    Sorry, two very quick questions.  You said the administration does not believe the President can ignore the debt ceiling.  I don’t mean to parse, but you’re not trying to play any definitional games, like some people say he can lift the debt ceiling on his own.  You’re not saying there’s a distinction here you’re making?

 

MR. CARNEY:  I’m not.  I think — that’s the language that I have.  I think it’s pretty clear.  We believe profoundly that Congress ought to simply do its job in a routine fashion, that we can and should engage in negotiations and discussions about how to reduce our deficits in a substantial and sustainable way that helps our economy and helps it create jobs.

 

Q    I want to make sure we’re not under-reading the word “ignore” as opposed to later you guys come and say, we’re not ignoring it; we’re raising it ourselves.

 

MR. CARNEY:  Again, I would just point to the language.

 

Q    And then Russia — the Senate may pass today the bill repealing Jackson-Vanik in terms of Russia, and adding Magnitsky human rights sanctions.  Are you all going to sign it?

 

MR. CARNEY:  Well, we look forward to Congress acting on this.  We’ve been working for it and the President does hope to be able to sign it.

 

Thanks very much.

 

 

END

12:50 P.M. EST