PRESS GAGGLE
BY PRESS SECRETARY JAY CARNEY
AND
SECRETARY OF HOUSING AND URBAN DEVELOPMENT SHAUN DONOVAN

Aboard Air Force One
En Route Phoenix, Arizona

11:52 A.M. EDT

MR. CARNEY:  Welcome aboard Air Force One today as we make our way to Phoenix, Arizona.  As you know, the President will be delivering another of his cornerstone speeches today in Phoenix, this one focused on how far we’ve come and the road we still need to travel when it comes to reviving our housing market.

Homeownership is a huge part of what we think of when we think of the American Dream, and making sure that middle-class Americans are able to own their homes and to do so with a sense of security is a key priority of the President’s.

I have with me Secretary Shaun Donovan, and I would like him to give you a topper, if you will, about the President’s remarks today and some of the things he’s going to announce.  Then he can take questions from you on this subject.  And if you would, hold and reserve questions on other subjects, which I will then answer after Shaun is done. 

With that, I turn it over to the good Secretary — Secretary Donovan.

SECRETARY DONOVAN:  Thanks, Jay.  As Jay laid out, housing is a critical cornerstone of the better bargain for the middle class that the President has been laying out over the last few weeks.  And not only is housing itself important, but the savings that Americans build up in homes are also absolutely critical to how most middle-class families pay for their kids to go to college, to pay to start small businesses, to save for retirement.  So it connects to the other cornerstone that the President is talking about as well.

We’re going back to Phoenix because four years ago, Phoenix was one of the hardest-hit places in the country.  Just a few weeks after taking office, the President traveled there to lay out his place for how to revive the housing market.  And as we travel back today, we have, not just in Phoenix but nationally, a housing market that has improved dramatically.  Home prices are rising at the fastest level in seven years.  Construction workers are going back to work building new homes.  We’ve gained $2.8 trillion in home equity in this country since the President traveled to Phoenix that time, and millions of families have been able to come up for air because they’re back above water on their mortgages.

But what the President is going to say is that we need to do two critical things to really build the 21st-century platform that we need for middle-class families.  First, we can and we must accelerate the housing recovery that we’re seeing.  We still have too many families in Arizona and across the country that are hurting, too many communities that are still suffering the effects of the housing crisis.  And so he’s going to lay out five things that we can do in the short run, specific steps that we can take to help accelerate the housing market recovery — things like helping many more families refinance their mortgages.

We’ve already helped over 2 million families with government-guaranteed mortgages refinance.  It’s been one of the critical things that has helped accelerate our economic recovery.  Those families are saving over $3,000 a year each and every year — like a major tax cut.  We need to help more families do that, particularly families that don’t have government-guaranteed mortgages. 

He’s going to talk about the fact that it’s too difficult for families that can be successful homeowners to get a mortgage today, and specific steps that we can take to help that.  He’s going to talk about how we helped the hardest-hit communities renovate and rebuild, even demolish in some cases vacant and abandoned homes, and a set of other steps as well.

But he’s also going to focus on the fact that we cannot let a crisis like the one that we saw, which devastated trillions of dollars of savings, wreaked havoc on families and communities around the country, and even put our world economy at risk — we cannot let a crisis like that happen again.  And that means building a rock-solid foundation for housing going forward.  That means creating a housing finance system, first and foremost, that does not repeat the mistakes of Fannie Mae and Freddie Mac.

So he’s going to lay out four specific principles that any legislation needs to follow.  He’s encouraged by the bipartisan progress that we’re seeing on Capitol Hill.  He believes that that legislation in the Senate Banking Committee that’s being discussed meets his — broadly meets his four principles that he’s going to lay out today.  He believes they need to go further in certain aspects, particularly in making sure that housing is affordable going forward.  But he’s encouraged by that progress and he wants to make sure that that progress continues.

But he also believes there are things that we can do today with our own authorities that can make our housing finance system safer.  We can make sure that we continue to take steps to wind down the government presence in the housing market — and he’s going to lay out a series of those steps as well — and that we can make mortgages safer and simpler in this country.

Before the crisis, families buying a toaster were better protected than making the most important financial decision of their lives.  And so the President will talk about what we can do, whether it’s a three-page simple form that every homeowner should see before they make the decision to buy, rather than the reams of fine print that they see today, and a series of other steps that we can take to make mortgages simpler and safer and better for middle-class families and those striving to be in the middle class.

So with that, let me stop and I’ll take your questions.

Q    Can I ask a question?  You mentioned the Senators Warner and Corker’s bill.  So he won’t support it but he — he supports it in concept, but he’s not going to endorse it — is that the right way to say that?

SECRETARY DONOVAN:  Well, we’re waiting to see details of that bill, but we also know that Senators Reid and particularly, most importantly, Chairman Johnson and also Ranking Member Crapo are working themselves.  And so what he’s saying — and this is, I would say, similar to what we have seen on immigration reform

— he’s not going to agree with every detail, but broadly speaking, he believes this bill meets his four key principles that he’ll lay out today, but he does want to see them go farther in certain areas, particularly on making housing affordable.

Q    Housing experts say that the situation in Phoenix, while it’s obviously improved since it hit rock bottom, is due in large part to the fact that when the housing prices fell, investors came in, scooped up some of these distressed properties, and are now either selling them for a profit or renting them out at higher prices.  Is that really a strong example of the housing increases and improvements that the government wants to highlight, when it’s largely focused on investors, not sort of an average homeowner?

SECRETARY DONOVAN:  First of all, I would argue with that analysis.  Less than one in five homes in America is being bought by investors.  Close to a third of all new homes are being bought by first-time homebuyers.  And so just in terms of the numbers, while investors have been part of the story, they certainly haven’t driven it, and in a place like Phoenix, that number is actually declining pretty rapidly. 

On the other hand, what I would say — and this I part of what the President will lay out today — even though we’re seeing more and more first-time home-buyers and others be able to get into the market, we still have millions of families that could be successful homeowners that are having trouble getting a mortgage. And that’s why he’s going to lay out specific steps that we need to take in the short run from streamlining duplicative regulations, simplifying those; setting clear rules of the road for enforcement going forward.

And one that’s particularly important to me that we’re going to be undertaking at FHA — we have millions of families who have been able to go back to work, 7.3 million new private sector jobs over the last 41 months.  We know many of those homeowners — many of those workers, whether they were former homeowners or continue to be homeowners today, they’re folks that had very good credit records before they might have lost a job, or lost hours. They’re now getting back to work.  What we’re saying is if they’ve had a full year of being able to show they’re back to being able to have very strong credit, pay on their mortgages, we ought to take additional steps to help them be able to buy a home or to refinance or do other things with their mortgage.

So that’s an example — we call it Back To Work — specific policy that we’re undertaking that can help expand the number of first-time buyers or even folks who’ve been successful homeowners in the past to get into the market. 

Q    Will his calling today for winding down Freddie Mac and Fannie Mae actually lead to it happening?  I mean, this is something that’s been discussed since the 2008 campaign and probably before.  What about it is different today that will actually lead to some change on that?

SECRETARY DONOVAN:  Well, first of all, there are two things that are different.  If you’d asked most commentators around D.C. six months ago or even three months ago whether we were going to make any progress on this issue, most would have said no.  But we’ve seen over the last few months the Bipartisan Policy Center, led by a strong bipartisan group of former senators and housing leaders, put out a proposal.  We’ve seen now real movement in the Senate towards strongly bipartisan reform.  And so the President is encouraged by that bipartisan cooperation and wants to work closely with the Senate Banking Committee, with Chairman Johnson, Ranking Member Crapo, and all members of Congress to get that legislation done.

But the other thing that he talks about today and that we’ll lay out is that there are specific steps we can take short of legislation to move the housing finance system in the right direction, including winding down Fannie Mae and Freddie Mac — specific steps like making sure their portfolios are shrinking by at least 15 percent a year.  In some ways, Fannie and Freddie operated like hedge funds, buying and selling all kinds of investments that didn’t have to do with their core mission.  We ought to wind down those portfolios as quickly as possible.

He also talked — in the factsheet that you can review, we lay out specific ideas for making sure that private capital sits in front of taxpayer risk even on current loans that Fannie Mae and Freddie Mac are issuing.  Those are steps that we are undertaking and we can accelerate.  We talk about using our own authorities to wind down loan limits, lower loan limits, not only for Fannie Mae and Freddie Mac, but also for FHA.

So those are just a few examples of the concrete steps that we are taking and we can take to limit taxpayer exposure, to bring more private capital back into the market, and that’s one of the core principles that the President will lay out today.  For any housing finance system, private capital has to be at the center of that system, and taxpayers can’t be on the hook for risk in the way that they were before.

Essentially, Fannie Mae and Freddie Mac operated with a model — heads they win; tails taxpayers lose.  And that’s got to stop.

Anybody else got other questions?

Q    We’re good.

Q    I like that toaster line.  That was a good one.

SECRETARY DONOVAN:  Elizabeth Warren.  I should quote her.

MR. CARNEY:  I want to thank Secretary Donovan for joining us today and answering your questions on the housing market.  And with that, I will take your questions on other issues.

Q    Has the President spoken to former President George W. Bush about his stent?  Has he wished him well?  Give us an update.

MR. CARNEY:  I don’t believe the President has spoken with the former President.  He has been briefed informally on former President Bush’s medical procedure and obviously wishes him well. And I don’t have anything more on that for you.

Q    Is the President involved at all with the decision to evacuate United States personnel from the embassy in Yemen?

MR. CARNEY:  The President has been briefed and updated regularly on the steps that are being taken in response to the potential threat occurring in or emanating from the Arabian Peninsula.  These are decisions that are being made by the State Department and I would refer you to the State Department for specifics about the personnel who left and the personnel who remain.  But certainly the President is briefed in real time on these matters and concurs with the decisions that have been made.

Q    Does he see this step as any type of new threat, new information that’s come out in the last 24 hours or so, or is it just another step in responding to what you already knew when you closed the embassies?

MR. CARNEY:  Again, I would refer you to the State Department for details about the specific personnel decisions that are being made.  As I said yesterday, we are responding to the information that we have and, out of an abundance of caution, taking steps to ensure the security of American personnel and of facilities in a variety of countries around the region and the world.

The threat is ongoing and it’s real, and we consider it serious.  We believe that it will — that it is occurring in or emanating from the Arabian Peninsula, but we obviously cannot rule anything out when it comes to how the threat might manifest itself.

Q    Jay, did the President have a reaction to yesterday’s news about The Washington Post being sold?

MR. CARNEY:  I don’t have a reaction to read out to you.  As somebody who was born in Washington and considers the Post my hometown newspaper, I was I think as surprised as a lot of people were by the news, but certainly wish the institution of The Washington Post, with its storied history and everyone who works there in pursuit of quality journalism, all the best with this transition.

Q    Can I just go back to former President Bush for a minute?  When did he hear about it and how did he hear?

MR. CARNEY:  I haven’t spoken to President Obama in great detail about it.  I’m not sure.

Q    Just real quick on the Bezos purchase of The Washington Post, the President spoke with Bezos last week, I believe.  Did this come up in their conversation at all?

MR. CARNEY:  I don’t have a specific readout of that.  I’m not aware that that came up.

Q    Does the President have an iPad or a Kindle?

MR. CARNEY:  I think it’s well known that the President has an iPad.  I’m not sure about his other technology purchases.

Q    You’re opening up the possibility the President has a Kindle?  Is that — we’re leaving room for that?

MR. CARNEY:  I think I mentioned the other day that I’m on my second Kindle.  I also have an iPhone and a Macbook Air.  So I’m — 

Q    It’s always about you, isn’t it?

MR. CARNEY:  It’s always about me when it comes to technology.

Yes.

Q    You mentioned yesterday that there would be news in the coming days about the Russia trip.  Can you give us any update on the decision-making process there?

MR. CARNEY:  I can’t.  We’re still looking at the utility of a bilateral summit in Moscow.  I have no updates on that process. We obviously have a range of issues to discuss with the Russians in areas of both conflict and potential progress, and we’re evaluating all of that as we assess the utility of a bilateral summit.

Q    What is the President’s current state of mind about Putin and the Russia relationship at this point?  How does he feel about things?

MR. CARNEY:  As I expressed in the wake of the decision by Russian authorities to grant temporary asylum to Mr. Snowden, we are extremely disappointed by that decision and feel that it was unnecessary in view of our strongly held position that there was legal justification for Mr. Snowden’s expulsion from Russia and return to the United States where he faces three felony counts and will be, upon his return, accorded the full rights and protections of a defendant in this country.

I noted at the time that we’ve had significant law enforcement cooperation with the Russians in the past, and that was especially true and has especially been true in the wake of the Boston bombing.  We felt that it was not necessary for the Snowden situation to do any damage to our relationship with Russia.  That was a view expressed by Russian officials, including President Putin, and that we shared it.

Unfortunately, this decision was made, and we’re assessing, as I said, the utility of a summit in Moscow in light of that and in light of a number of other issues.

Q    Just to go back to the embassy closures for a second.  There was a lot of discussion in the briefing yesterday about the difference between core al Qaeda and al Qaeda affiliates.   And following the briefing, it’s been reported by several news organizations that the actual conversations that were intercepted that led to these closures were conversations between Zawahiri, who is the leader of core al Qaeda, and then the leader of the Al Qaeda affiliate in Yemen.  So does the White House still stand by the assertion that the core al Qaeda has been decimated, is on the run, when this threat is emanating at least in part from core al Qaeda?

MR. CARNEY:  Well, we do stand by that.  There is no question that core al Qaeda in Afghanistan and Pakistan has been severely diminished, its leadership decimated, and there’s no question that it’s on the run.  For many years now it has become — it has been less organized and less capable of directing attacks on the scale that it was able to do most notably on 9/11. And that remains the case.

And as the President said, I would note, at his speech in NDU, since this was a question yesterday, he noted that core al Qaeda in Afghanistan and Pakistan is on the path to defeat.  Then he also said, “What we’ve seen is the emergence of various al Qaeda affiliates — from Yemen to Iraq, from Somalia to North Africa.  The threat today is more diffuse, with al Qaeda’s affiliate in the Arabian Peninsula, AQAP, the most active in plotting against our homeland.  While none of AQAP’s efforts approach the scale of 9/11, they have continued to plot attacks of terror, like the attempt to blow up an airplane on Christmas Day in 2009.”

So what the President said then I think is reflected in what we’re seeing now.  And when it comes to al Qaeda core, to the extent that they play a role, it is, in our view, inspirational.

And while I can’t address reports about intelligence, I would say that that remains our view.

Q    Jay, does it say anything to this attack — or should we read anything into it — the President has maintained a normal schedule through the weekend, doing this event today.  We haven’t heard him make public comments thus far.  Does that give any insight as to exactly what this threat may be?

MR. CARNEY:  Well, we’ve been very clear with the warning that we’ve issued and with the actions taken by the State Department and obviously with a number of actions that are taken — seen and unseen — by Homeland Security and other parts of our national security apparatus that we take this threat very seriously.  And the President has directed his national security team, including Counterterrorism and Homeland Security Advisor Lisa Monaco, as well as other members of that team, to take all steps necessary to ensure the security of American citizens and American personnel abroad. 

As we’ve said, and I said yesterday, we have been living in a world for some time now where we face an organization in al Qaeda and in its affiliates that aspires to do harm to the United States, aspires to do harm to the American people.  And we have to maintain constant vigilance in the face of those threats to do everything we can to disrupt them, to do everything we can to bring to justice those who would perpetrate them.  And that’s what we’re doing. 

Q    I don’t think you commented yesterday about baseball.  Have you talked to the President about the scandal from yesterday and does he have a response — reaction?

MR. CARNEY:  The President believes that our professional athletes have an important responsibility as role models, especially to our children.  And his views on performance-enhancing drugs are clear.  But I don’t have a specific reaction to the announcement by Major League Baseball yesterday, but he believes it’s the duty and responsibility of our athletes to be quality role models for our children.

Q    For the Leno show tonight, can you speak a little bit about what the President thinks and what you think you get specifically out of appearing on The Tonight Show, who you’re reaching that you’re not reaching otherwise by doing that appearance?

MR. CARNEY:  Well, it’s certainly not the first time this President or other Presidents or other political leaders have appeared on The Tonight Show or shows like it.  I think the reason why we’ve agreed to appear on shows like this is because we’re trying to communicate with Americans where they are.  And the viewers of late-night shows are not necessarily the readers of newspapers or wire services, or necessarily viewers of cable or broadcast news shows. 

So the President looks forward to it.  He has done The Tonight Show on a number of occasions.  He has obviously done a variety of other shows.  And as I think was noted sometime on occasion last year, some of his more substantive interviews have appeared in non-traditional settings.  So you never know what you might get.

Q    Is there a kind of viewer that he thinks he wants to reach out to by appearing on The Tonight Show as opposed to the David Letterman Show?

MR. CARNEY:  Well, I’ll leave it to the media critics to make those kind of distinctions.  (Laughter.)  But the answer is I think the category is something that, like others, we look at in trying to reach as many Americans as we can and in the ways that we can.  As you know, the President recently gave a lengthy interview to The New York Times, which I guess some would argue would be targeting a different audience.

Q    Could you maybe bring back your esteemed colleague, Dan Pfieffer, to claim on the relative merits of going to The Tonight Show?

MR. CARNEY:  I have Mr. Pfieffer’s proxy on that question today.

Q    Thanks, Jay.

END
12:16 P.M. EDT