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How the White House’s Deal With Big Pharma Undermines Democracy

By Robert Reich|Aug 9, 2009, 5:30 PM|Author's Website

I’m a strong supporter of universal health insurance, and a fan of the Obama
administration. But I’m appalled by the deal the White House has made with the
pharmaceutical industry’s lobbying arm to buy their support.

Last week, after being reported in the Los Angeles Times, the White House
confirmed it has promised Big Pharma that any healthcare legislation will bar the
government from using its huge purchasing power to negotiate lower drug prices.
That’s basically the same deal George W. Bush struck in getting the Medicare drug
benefit, and it’s proven a bonanza for the drug industry.

A continuation will be an even larger bonanza, given all the Boomers who will be
enrolling in Medicare over the next decade. And it will be a gold mine if the deal
extends to Medicaid, which will be expanded under most versions of the healthcare
bills now emerging from Congress, and to any public option that might be included.
(We don’t know how far the deal extends beyond Medicare because its details
haven’t been made public.)

Let me remind you: Any bonanza for the drug industry means higher health-care
costs for the rest of us, which is one reason why critics of the emerging
healthcare plans, including the Congressional Budget Office, are so worried about
their failure to adequately stem future healthcare costs.

To be sure, as part of its deal with the White House, Big Pharma apparently has
promised to cut future drug costs by $80 billion. But neither the industry nor the
White House nor any congressional committee has announced exactly where the $80
billion in savings will show up nor how this portion of the deal will be enforced.
In any event, you can bet that the bonanza Big Pharma will reap far exceeds $80
billion. Otherwise, why would it have agreed?

In return, Big Pharma isn’t just supporting universal health care. It’s also
spending a lots of money on TV and radio advertising in support. Sunday’s New York
Times reports that Big Pharma has budgeted $150 million for TV ads promoting
universal health insurance, starting this August (that’s more money than John
McCain spent on TV advertising in last year’s presidential campaign), after having
already spent a bundle through advocacy groups like Healthy Economies Now and
Families USA.

I want universal health insurance. And having had a front-row seat in 1994 when
Big Pharma and the rest of the health-industry complex went to battle against it,
I can tell you first hand how big and effective the onslaught can be. So I
appreciate Big Pharma’s support this time around, and I like it that the industry
is doing the reverse of what it did last time, and airing ads to persuade the
public of the rightness of the White House’s effort.
But I also care about democracy, and the deal between Big Pharma and the White
House frankly worries me. It’s bad enough when industry lobbyists extract
concessions from members of Congress, which happens all the time. But when an
industry gets secret concessions out of the White House in return for a promise to
lend the industry’s support to a key piece of legislation, we’re in big trouble.

That’s called extortion: An industry is using its capacity to threaten or prevent


legislation as a means of altering that legislation for its own benefit. And it’s
doing so at the highest reaches of our government, in the office of the President.

When the industry support comes with an industry-sponsored ad campaign in favor of


that legislation, the threat to democracy is even greater. Citizens end up paying
for advertisements designed to persuade them that the legislation is in their
interest. In this case, those payments come in the form of drug prices that will
be higher than otherwise, stretching years into the future.

I don’t want to be puritanical about all this. Politics is a rough game in which
means and ends often get mixed and melded. Perhaps the White House deal with Big
Pharma is a necessary step to get anything resembling universal health insurance.
But if that’s the case, our democracy is in terrible shape.

How soon until big industries and their Washington lobbyists have become so
politically powerful that secret WhiteHouse-industry deals like this are
prerequisites to any important legislation? When will it become standard practice
that such deals come with hundreds of millions of dollars of industry-sponsored TV
advertising designed to persuade the public that the legislation is in the
public’s interest?

(Any Democrats and progressives who might be reading this should ask themselves
how they’ll feel when a Republican White House cuts such deals to advance its own
legislative priorities.)

We’re on a precarious road — and wherever it leads, it’s not toward democracy.

http://wallstreetpit.com/9303-the-deal-between-big-pharma-and-the-white-house

__________________
As reported in LA Time:

White House deal with drug firms draws flak


An $80-billion pact with the pharmaceutical industry intended to advance the
administration's healthcare reform goals has instead created confusion and
discord.

By Tom Hamburger
August 14, 2009

Reporting from Washington - An $80-billion deal with the drug industry that the
White House thought would add momentum to its campaign for national healthcare
reform has instead provoked a political tempest, frustrating and bewildering some
of the president's most important allies.

As complaints rolled in, the administration offered varying, sometimes


contradictory explanations of the deal.

"I've heard a lot of confusion about what was agreed to," said Rep. Henry A.
Waxman (D-Beverly Hills), chairman of the House Energy and Commerce Committee, who
wrote healthcare legislation that would impose more cost on the industry than that
contained in the White House agreement.

Under the deal, the Pharmaceutical Research and Manufacturers of America, or


PhRMA, agreed to provide $80 billion in cost savings over 10 years. It also
promised to promote healthcare reform in a multimillion-dollar ad campaign. In
return, the White House agreed to consider the $80 billion as a cap on PhRMA's
costs in the overhaul legislation. In addition, the White House agreed not to
require rebates on sales of commonly prescribed drugs to patients enrolled jointly
in Medicaid and Medicare.

Separately, the White House told PhRMA executives that legislation the industry
has long opposed to permit importation of cheaper drugs from Canada and Europe
would probably not be necessary if a healthcare overhaul bill passed.

The drug industry's chief lobbyist, PhRMA President W.J. "Billy" Tauzin, said the
unwritten agreement was reached with Democratic Sen. Max Baucus of Montana,
chairman of the Senate Finance Committee, and was closely monitored and "blessed"
by the White House.

Since the agreement was announced June 20 -- with President Obama saying, "We are
at a turning point in America's journey toward healthcare reform" -- critics from
the left and right have criticized the accord. Business and conservative interests
are angry that one of their most important traditional allies -- PhRMA -- is now
working with Democrats to build support for the president's plan. Liberals say
Obama gave away too much to the industry.

House Speaker Nancy Pelosi (D-San Francisco) said wryly that she thought if PhRMA
agreed to $80 billion in savings, it was likely that real savings could probably
be twice that amount. She suggested that the House might not honor the White
House-PhRMA-Senate deal. Sen. Bernie Sanders (I-Vt.) said that when he read news
accounts suggesting that the White House had told PhRMA it would not pursue
Canadian drug importation, he sought and received assurances from White House
Chief of Staff Rahm Emanuel that there was no such deal.

After that conversation, however, White House healthcare spokeswoman Linda


Douglass confirmed to reporters that the White House had discussed the importation
provision with worried drug company executives, telling them that "health
insurance reform that lowers costs, including pharmaceutical costs, would probably
make such legislation unnecessary." Sanders views that as a dubious assumption and
says he intends to continue to pursue the provision.

Waxman became concerned about other reports of what was in the agreement, in part
because he feared it might undermine aspects of his healthcare bill. In an
interview this week, he expressed alarm about Tauzin's claim -- since revised --
that the deal included a promise not to have Medicare seek further drug price
discounts.

"It's ridiculous to have a program in which Medicare spends millions of dollars


with drug companies as a customer and does not get a better deal on pharmaceutical
prices," Waxman said.

After first declining to comment, the White House now says the topic did not
explicitly come up in discussions with the industry.

"I think a lot of people in the room walked away with a different understanding of
what was agreed to," Waxman said.

Tauzin, a former congressman from Louisiana, believed that he had an understanding


that there would not be negotiations over Medicare drug prices in the future.
Currently, government negotiations for lower prices are banned in the Medicare
Part D program under a "noninterference" clause that the industry lobbied for
several years ago.

This week, Tauzin's top aide at PhRMA, Ken Johnson, reiterated that view but said
it was time to stop public discussions about whether it came up in the closed-door
White House meetings.

From the time the industry was first asked to participate in crafting healthcare
overhaul legislation, Johnson said that Tauzin told everyone: "We'll do everything
we can to help. But we will not support price controls, because they will hurt
patients by drying up research and development needed to find new cures, and they
will kill jobs in a very fragile economy."

Tauzin thought the White House and others understood that meant there would be no
change in the government prohibition on price negotiations for drugs. "We thought
there was an underlying assumption on that key point," Johnson said.

At this stage, he added, "it's counterproductive to keep talking about it."


http://www.latimes.com/news/nationworld/nation/la-na-health-pharma14-
2009aug14,0,5896090.story

__________________

Obama gives powerful drug lobby a seat at healthcare table


The pharmaceutical industry, once condemned by the president as a source of
healthcare problems, has become a White House partner.

Billy Tauzin(BOUGHT BY BIG MONEY)

Former Louisiana congressman Billy Tauzin is the pharmaceutical industry's chief


lobbyist. (Susan Walsh / Associated Press / September 3, 2003)

By Tom Hamburger
August 4, 2009

Reporting from Washington - As a candidate for president, Barack Obama lambasted


drug companies and the influence they wielded in Washington. He even ran a
television ad targeting the industry's chief lobbyist, former Louisiana
congressman Billy Tauzin, and the role Tauzin played in preventing Medicare from
negotiating for lower drug prices.

Since the election, Tauzin has morphed into the president's partner. He has been
invited to the White House half a dozen times in recent months. There, he says, he
eventually secured an agreement that the administration wouldn't try to overturn
the very Medicare drug policy that Obama had criticized on the campaign trail.

"The White House blessed it," Tauzin said.

At the same time, Tauzin said the industry he represents was offering political
and financial support for the president's healthcare initiative, a remarkable
shift considering that drug companies vigorously opposed a national overhaul the
last time it was proposed, when Bill Clinton was president.

If a package passes Congress, the pharmaceutical industry has pledged $80 billion
in cost savings over 10 years to help pay for it. For his part, Tauzin said he had
not only received the White House pledge to forswear Medicare drug price
bargaining, but also a separate promise not to pursue another proposal Obama
supported during the campaign: importing cheaper drugs from Canada or Europe. Both
proposals could cost the industry billions, undermine its ability to develop new
cures and, in the case of imports, possibly compromise safety, industry officials
contend.

Much of the bargaining took place in July at a meeting in the Roosevelt Room, just
off the Oval Office, a person familiar with the discussions said. In attendance
were Tauzin, several industry chief executives -- including those from Abbott
Laboratories, Merck and Pfizer -- White House Chief of Staff Rahm Emanuel and
White House aides.

White House officials acknowledge discussing the importation question with Tauzin
but had no comment on whether there was an agreement to block future Medicare
price negotiations.

Yet everyone agrees that drug companies -- Washington's leading source of lobbyist
money -- now have "a seat at the table" at the White House and on Capitol Hill as
healthcare legislation works its way through Congress. If nothing else, a popular
president who six months ago criticized drug companies for greed now praises their
work on behalf of the public good.

"I think the pharmaceutical industry has been quite constructive in this debate,"
Obama told a small group of regional reporters last week. "And the savings that
they've put on the table are real and significant and are appreciated."

The pharmaceutical industry's political transformation provides an example of


Obama's approach to achieving his healthcare goals, which includes negotiation and
compromise, even with those he and his allies have painted as a source of the
problem.

The benefits to the White House go beyond budget savings. Tauzin's trade
association, the Pharmaceutical Research and Manufacturers of America, or PhRMA,
is helping to underwrite a multimillion-dollar TV advertising campaign touting
comprehensive healthcare legislation.

One ad resurrects Harry and Louise, the fictional couple whose caustic kitchen-
table comments in ads sponsored by the health insurance industry helped sink
Clinton's plan in 1994. This time, with the drug companies paying the bill, Harry
and Louise have changed their view.

"A little more cooperation, a little less politics, and we can get the job done
this time," Louise says in the commercial, a joint project of PhRMA and Families
USA, a health reform advocacy group with which the drug industry used to be at
odds.

In an interview, Tauzin said he carefully negotiated his agreements with the White
House, offering the $80-billion discount program in return for assurances that
there would be no government price-setting in Medicare Part D, the drug program
for seniors.

It was important, he said, to block the threat of Medicare price negotiations,


which he called tantamount to price-setting and a threat to the industry. In
addition, Tauzin said the industry asked the administration not to allow the
import of cheaper drugs because of safety concerns.

Linda Douglass, a White House spokeswoman, said that when drug company executives
brought up the import plan, they were told that the administration believed that
health reform would reduce drug prices so significantly that the legislation once
backed by Obama would "not be necessary."

It's far too early to tell whether the pharmaceutical industry's decision to back
Obama's health initiative will pay off.

"Since Obama came into office, the drug industry has received everything it wants,
domestic and foreign," said James Love, who leads an international nonprofit
promoting low-cost distribution of drugs to fight the world's most devastating
diseases.

"Yes, the drug companies are getting tremendous sweetheart deals" from Obama, said
Lawrence Jacobs, a University of Minnesota political scientist who studies the
history of health reform and other major social and economic changes. "But these
bargains are the price of admission for achieving substantial reform."

Tauzin, a Democrat who helped found the conservative Blue Dog coalition in the
House before switching to the Republican Party in 1995, was chairman of the House
committee that helped shepherd Medicare drug legislation through Congress,
including the provision that the government not interfere with price negotiations.

The pharmaceutical industry, once condemned by the president as a source of


healthcare problems, has become a White House partner.

Tauzin said PhRMA's support for Obama's initiative represented no shift in the
industry's basic philosophy.

"Our principles haven't changed, but we are looking at a different situation


today," he said. "There's an opportunity now to get a health bill passed that
doesn't provide for government control of healthcare. We are participating as
fully as we can now because we see an economic and moral imperative to do
something when so many millions of people don't have access to healthcare."

The prescription for PhRMA's partisan activities has changed recently along with
the political landscape.

In 2005 and 2006, during Tauzin's first two years at PhRMA, just a third of the
industry's $19.5 million in campaign donations went to Democrats. Tauzin came into
the organization, he said, determined to make it more bipartisan and more
generally appealing to the public.

This year, for the first time in two decades, Democrats have so far picked up more
of the industry's campaign cash -- 54% -- than Republicans, according to the
Center for Responsive Politics.

And PhRMA, a reliable backer of conservative candidates and causes in the past,
has shifted allegiance in other ways, including joining labor leaders in a high-
priced ad campaign to build grass-roots support for Obama's health plan.

Besides the new "Harry and Louise" ads, the industry is underwriting commercials
that praise potentially vulnerable Democratic incumbents.

Other things haven't changed, including the industry's unrivaled investment in


lobbying.

In just the last four months, the industry has spent $68 million on lobbying in
Washington, assuring its continued standing atop the nation's lobbyist spending
list.

Sen. Bernie Sanders (I-Vt.), a champion of importing drugs from Canada and
reducing the cost of pharmaceuticals, professes continued suspicion of the
industry, including its deals with the White House.

"The drug companies form the most powerful lobby in Washington," he said. "They
never lose."

http://www.latimes.com/features/health/la-na-healthcare-pharma4-
2009aug04,0,3660985.story?page=2

__________________

Obama's Biggest Health Reform BlunderHow Big Pharma's Billy Tauzin conned the
White House out of $76 billion.
By Timothy Noah, Thursday, Aug. 6, 2009

Billy Tauzin, president of the Pharmaceutical Research and Manufacturers of


America, has cut a secret deal on health reform with the White House. Tauzin told
Tom Hamburger of the Los Angeles Times that in exchange for the much-touted $80
billion in savings that PhRMA volunteered in June to help cover the uninsured and
reduce drug prices for some senior citizens, the White House had promised to block
any congressional effort to allow the government to negotiate Medicare drug
prices.

Tauzin is from Louisiana, where tall tales grow like weeds, and at first his
assertion seemed wildly implausible. But two days after the L.A. Times scoop, the
New York Times got White House confirmation. "The president encouraged this
approach," White House deputy chief of staff Jim Messina said in an e-mail. "He
wanted to bring all parties to the table to discuss health insurance reform."

President Obama's handshake with Tauzin is easily the dumbest mistake he's made in
shepherding health reform through Congress.

Tauzin revealed the deal out of pique that the House energy and commerce
committee, in breaking its logjam with Blue Dog Democrats, amended the health
reform bill to allow Medicare drug negotiation. "Who is ever going to go into a
deal with the White House again if they don't keep their word?" he sputtered. "You
are just going to duke it out instead."

It's pretty rich that Tauzin should be lecturing anybody about steadfastness. He
entered the House as a Democrat but jumped to the Republican Party in 1995. He
told the Baton Rouge Advocate in June 2003 that he would "complete my term and run
for re-election," but in December 2004 he quit the House to become president of
PhRMA, a job he reportedly leveraged with a somewhat less lucrative offer to
become chairman of the Motion Picture Association of America. Tauzin is legally
bound by House ethics rules not to make

with the intent to influence, any communication to or appearance before any


officer or employee of any department, agency, court, or court-martial of the
United States or the District of Columbia, on behalf of any other person (except
the United States or the District of Columbia) in connection with a particular
matter … in which the person participated personally and substantially as such
officer or employee, and … which involved a specific party or specific parties at
the time of such participation.

Yet Tauzin, six years prior to securing the White House's promise not to let the
government negotiate Medicare drug prices, was instrumental in writing the 2003
bill that created a Medicare drug benefit … but barred the government from
negotiating drug prices! (At the time, Tauzin was chairman of the House energy and
commerce committee.) Unlike some other House ethics rules, the prohibition against
lobbying on anything "in which the person participated personally and
substantially" is supposed to be permanent. It would seem not to be worth the
paper it's written on.

Why is the White House's PhRMA deal a bad bargain? Because in securing $80 billion
in savings over 10 years, the White House is forgoing what could be as much as
$156 billion over the same time period. That's what a 2008 report by energy and
commerce's investigations subcommittee calculated to be the savings if Medicare
were permitted to buy drugs at the same rates negotiated by the (much smaller)
Medicaid program.
So Tauzin conned the White House out of $76 billion. Granted, the provision agreed
to by energy and commerce would raise nowhere near that amount, largely because it
prohibits Medicare from creating a drug formulary to deny coverage to drugs it
deems ineffective or cost-inefficient. (Instead, private insurers who administer
the drug benefit establish their own formularies.)

In striking the bargain with PhRMA, Obama broke a not-insignificant campaign


promise ("Obama will repeal the ban on direct negotiation with drug companies and
use the resulting savings … to further invest in improving health care coverage
and quality"). Candidate Obama, citing a paper by Roger Hickey, Jeff Cruz, and
Dean Baker of the Institute for America's Future, put the savings at $30 billion a
year, which over a decade would be roughly twice the $156 billion savings
envisioned by the energy and commerce committee. (Hickey, Cruz, and Baker proposed
matching not Medicaid drug prices but those negotiated by the more
straightforwardly socialist Veterans Administration.)

By this reckoning, Tauzin swindled not $76 billion from President Obama but $220
billion. That's nearly half what the House health reform bill expects to raise
with its proposed surtax on incomes above $350,000!

It's often noted that Obama's strategy on health reform is the opposite of Hillary
Clinton's in 1994. (See, for example, "The Ghosts of Clintoncare" by Ezra Klein in
the Washington Post.) Instead of hiring Ira Magaziner to draft a bill and then
shoving that bill down Congress' throat, the Obama White House is letting Congress
write the health reform bill.

This strikes me as a reasonably shrewd strategy. But when you very deliberately
aren't controlling the legislative process, it doesn't make a lot of sense to cut
deals with special interests about what that legislation will contain. Health
reform has a thousand interconnected parts. Give in on something here, and you
have to make alterations on something there. That's why Senate finance Chairman
Max Baucus keeps saying, "Everything is on the table" (even though that isn't
strictly true).

Obama has taken tens and perhaps hundreds of billions of dollars off the table by
ruling out an elementary cost-saving measure whose rejection by the Republican
congressional majority back in 2003 is an ongoing scandal. What did he get in
return? The hope that other sectors in the health care industry would get onboard
with reform.

But health reform's principal target—the insurance companies—not only refuses to


endorse the creation of a public-option government health insurance program, the
one essential component to major health care reform; it refuses even to stop
hunting for trivial reasons to cancel insurance for policyholders after they
develop expensive-to-treat illnesses. (See "Why You Can't Trust Your Health
Insurer.") Mr. President, you've been played for a sucker.

[Update, 7:40 p.m.: Asked at today's White House briefing about the contradiction
between the Tauzin deal and what the energy and commerce committee passed, Press
Secretary Robert Gibbs said: "I do think—look, I think the goal of all of those at
the table, particularly the president, is to see costs come down and to see
progress made on that. But I don't want to get ahead of negotiating what might be
bill differences." This at least allows for the possibility that the White House
will renege on its ill-advised bargain with PhRMA.]

[Update, Aug. 7: The White House has graduated to making Clintonian-sounding


distinctions about the meaning of its bargain with PhRMA. Bloomburg's James Rowley
reports that White House deputy chief of staff Jim Messina told a meeting of
Senate Democrats yesterday that the Tauzin deal (what follows is Rowley's
paraphrase) "didn't require Obama to discourage Congress from requiring price
negotiations for the Medicare program." Huh? The bottom line remains that it would
be better for the White House to welsh than to honor this atrocious deal.]

[Update, Aug. 8: "Obama Reverses Stand on Drug-Industry Deal" reads a headline in


today's New York Times. The story, alas, doesn't support that conclusion. "White
House officials," reports the Times's David Kirkpatrick, "said Friday that Mr.
Messina, the deputy chief of staff who sent the e-mail message, had not intended
to confirm that the deal ruled out price negotiations." Possibly not. But the
White House saying it did not intend to confirm something sidesteps the question
of whether that something was true.

Meanwhile PhRMA, Kirkpatrick reports, has stopped complaining about being double-
crossed by the House energy and commerce vote, "perhaps satisfied that the White
House had at least ruled out the price rebates in the House bill." Does that mean
the White House will take rebates out of the House bill? If so, that isn't much of
a reversal; drug rebates aren't in the Senate health committee bill. (The Senate
finance bill was still being written when the Senate broke yesterday for recess.)

Also, Kirkpatrick's use of the word "perhaps" is difficult to parse. Is the Times
reporter relating his own speculation, speculation coming out of the White House
or PhRMA, or something a White House or PhRMA source told him off the record ("You
can report this but make it sound like your own speculation")?

White House Press Secretary Robert Gibbs, when asked about the Tauzin deal once
again on Aug. 7, contiued to dodge the question. But he did say, "[W]e feel like
$80 billion [in savings from the drug industry] is an appropriate amount, and I
think the—I don't have the statistic in front of me, but I think the House bill
has $85 billion in it. So I would argue that we're all in the same ballpark."
Translation: "Never mind whether there's a deal to keep PhRMA's health-reform
contribution to its promised $80 billion. All we want is $80 billion!" That
doesn't sound like to me like the White House is reversing its stand.

In today's radio address, Obama said, "Let me start by dispelling the outlandish
rumors that that reform will promote euthanasia, cut Medicaid or bring about a
government takeover of health care. That's simply not true." Missing from Obama's
litany was the accusation that the White House cut a secret deal with the
pharmaceutical industry. Instead, Obama repeated his familiar refrain, "Drug
companies have agreed to make prescription drugs more affordable for seniors."
Yes, we know. But what will they get in return?]
http://www.slate.com/id/2224621/

_____________________
NOW, few words from Gibb the LIAR for the LIAR in CHIEF Barry Soetoro/Obama
aka +++++

THE WHITE HOUSE

Office of the Press Secretary

For Immediate Release


August 6, 2009

PRESS BRIEFING BY
PRESS SECRETARY ROBERT GIBBS

James S. Brady Press Briefing Room

MR. GIBBS: Good afternoon. Ms. Levin.

Q Can you tell us the current plans and the thinking about getting
President Obama together with President Clinton about North Korea?

MR. GIBBS: We talked a little bit about this this morning. I know when the
President -- let me make sure I'm specific -- when President Obama spoke yesterday
morning with President Clinton, President Obama expressed his desire to get
together fairly soon so the two men would have a chance to talk.

As we have described to you all, the members of the NSC briefed former
President Clinton prior to his trip. There will -- there has been and will
continue to be a formal debriefing process now on the back end of that trip.
There were some communications between the former President and the NSC yesterday,
and that will continue over the next several days. I know they want to get
together. Right now we're just trying to coordinate the schedules of two rather
busy men.

Q So is it fair to say that the NSC staff will talk to President Clinton
and gather all the information that needs to be gathered, and that after that
point, then the two Presidents will get together and discuss whatever it is or --

MR. GIBBS: I don't have -- there's nothing currently scheduled. I would put
these in many ways on two different tracks. They could certainly happen
simultaneously. Obviously it's our desire to get whatever impressions President
Clinton has.

Q And is this happening in person, on the phone?

MR. GIBBS: Last night it happened on the phone. I don't know if future ones
will happen in person or not.
I will say this, and obviously I was not part of the debriefing last night, but if
you look at where historically President Clinton has been -- and I don't have any
knowledge of what was debriefed or talked about, but I can only imagine that given
his history on this issue, that he would strongly encourage the North Koreans to
set aside their renewed pursuit of a nuclear weapon, come back and live by the
agreements that they've been party to before, and to encourage them to understand
that the acquisition of those weapons is not going to bring international prestige
but further isolation based on his history on these issues.

Q Just one more quick one on this. Do you guys have any indications,
whether through the start of this debriefing with President Clinton or other
channels, that North Koreans want anything in return for the pardon?

MR. GIBBS: I haven't been party to these negotiations and I haven't heard of
anything.

Yes, sir.

Q Robert, can you give us an idea as to the administration's timetable on


reforming Fannie Mae and Freddie Mac, and any details on the way you're leaning?

MR. GIBBS: Obviously as part of financial regulatory reform, GSE reform is


going to be part of that. Obviously these were mentioned in the white paper that
the administration released on regulatory reform -- there was a discussion of this
on pages 41 and 42 of that reform. The story out today is light-years ahead of
any decision-making process here. There's no meeting that's scheduled, and it's
safe to say that many senior administration economic officials learned of this
proposal some time this morning at the foot of their driveway.

Q So does that mean there's not a proposal?

MR. GIBBS: Well, staff are certainly -- as I've said through financial
regulatory reform, staff are aware of the problem and working on it as a part of
financial regulatory reform. I think to assume that either this is at a point of
even a decision by senior economic officials, let alone anybody that occupies the
Oval Office, is way, way ahead of itself.

Q Is there a time frame in mind specifically for those two companies for
reform?

MR. GIBBS: I don't have a specific timetable. I can certainly look into
that. Again, I know it's certainly part of a broader financial regulatory reform,
and obviously both play an important role in the President's home loan
modification program and overall housing policy.

Yes, sir.

Q Some foreign policy experts have wondered about the precedence set by
President Clinton's trip to North Korea, the humanitarian mission, as you guys
describe it -- about whether or not it would mean that other rogue states making a
similar request in a similar situation -- and it's not too hard to see a fairly
close parallel with what's going on in Iran right now -- whether that would now
merit a visit from somebody of President Clinton's prestige. And I was wondering,
A, if that was a concern before you guys signed off on this trip, and B, what your
response is to that criticism.

MR. GIBBS: Well, look, I've described this and others as separate from the
concerns that we had about North Korea, its nuclear policy, its provocative
international actions. And I think our policy to ensure that U.N. Security
Council regulations are implemented is no different today than it was Monday
before President Clinton left.

This was a private humanitarian mission with only the goal of bringing back
two journalists to safety. I don't read a lot of precedent into it. I know the
President is enormously thankful and grateful for the work that President Clinton
did on this, and his willingness to undertake such an important mission. But
that's what this was about.

I think the administration has taken very strong action relating to and responding
to the actions of the North Koreans. I think what happened in the U.N. Security
Council, the unanimous passage of those resolutions and the impact that they have
already had on ensuring that the North Koreans are unable to move weapons out of
their country, quite frankly is the best response for anybody's criticism.

Q And then Senator Cornyn sent you guys a letter expressing concern about the
tips at whitehouse.gov and what that meant, what exactly you were seeking in terms
of disinformation. I got a statement from Linda Douglass earlier, and I assume
that, just from what she suggests in her response, you guys are not going to be
saving the names or the IP addresses, anything along those lines --

MR. GIBBS: Nobody is collecting names. This was -- we have seen and as I've
discussed from this podium, a lot of misinformation around health care reform,
some of it I think spread purposefully. We have used on many occasions the Web
site to debunk things that are simply not true. We ask people if they have
questions about health care reform and about what they're hearing about its
effects on them to let us know and we provide them information to show that that
wasn't true. But nobody is collecting names.

Q But in -- is it misinformation that in 2003, President Obama, then a


state senator, supported a single-payer health care system?

MR. GIBBS: I think, again, if you look at the statements that have been put
up on other Internet sites that splice a bunch of stuff together, and I think if
you look at the answers that state senator, U.S. senator, and President Barack
Obama have given on that -- I think we hope to provide people with a full and
accurate picture, not something that only the words opponents want might to see.

Yes, sir.

Q Thanks, Robert. The President meeting with the six senators,


bipartisan-group senators -- what was his message to them and what is the sort of
expectation?

MR. GIBBS: The President invited the group to come to the White House today
to provide an update and a status report of sorts on their negotiations amongst
themselves in the committee. The President's message to them is to continue to
work and find consensus on an issue that we know they've been working hard on and
is very important to the American people. The President wants them to continue to
work and make progress, and wanted to hear directly from them on where they were.
It wasn't a negotiating session. The meeting just recently broke up and I don't
have -- I have not had a chance to talk to the President since the conclusion of
that meeting.

Q So there's no sense as to how close they are?


MR. GIBBS: I don't have one yet, no.

Q And in terms of -- I know in an interview yesterday, the President


suggested that -- it appeared that he's losing patience when it comes to
bipartisanship and getting the kind of bill that can be supported by Republicans
and Democrats. Is he losing patience pushing bipartisanship in saying that he
might have to forego that?

MR. GIBBS: Well, no. I think the President's actions today, the invitation
that came from him to a bipartisan group of senators to come and discuss where
they were on health care denotes that he's serious about getting something through
Congress and he's serious about doing so in a way that brings about a large
coalition. I'd say, Dan, that if you look at even some of the Finance Committee
statements from earlier in the year, they had wanted to come to some agreement in
June. Obviously we've reached warmer months than June without that. So the
President simply wanted an update.

I will say this: I think the President is very serious about getting
something done -- I know he is -- about getting something done this year. That's
been his goal all along.

Q With or without Republicans?

MR. GIBBS: With those that want to see health care reform.

Yes, ma'am.

Q Are you saying that the President doesn’t see any potentiality for
improving relations with this North Korean move? How come we don't know anything
that led up to it, if there's any quid pro quo or anything else? We're so in the
dark.

MR. GIBBS: Well, look, there was no quid pro quo. I think we, on a call,
went through in fairly exhaustive detail, step by step, how the invitation came
for President Clinton to go when we were notified about that. Again, Helen,
whether or not --

Q You let them make all the announcements, show all the pictures. They
took total control of --

MR. GIBBS: Well, I didn't --

Q Not you, per se. (Laughter.)

MR. GIBBS: I was going to say, I have less control over the North Korean
television cameras than even I had hoped.

Q You, representing the United States, that is.

MR. GIBBS: Right, exactly. No, look, obviously we took great care while
this was going on to ensure that our ultimate goal was success. Obviously the
President and the team here will have a chance to hear directly from President
Clinton about what he heard and saw. We're obviously anxious to get that.

But I'd say again, Helen, I think what is crucially important to understand --
whether or not North Korea wants a better relationship we'll certainly find out --
they have the power, though, to change that relationship. They have the power to
come back to the set of agreements that they entered into to denuclearize the
Korean Peninsula. That's our goal. We think that's the international community's
goal based on their reaction to some of the provocative, if not outlandish,
statements and actions that the North Koreans have taken. They have the ability
and the power to do that.

We certainly, regardless of this mission or not, we certainly hope that


they'll come back to implementing the agreements that they entered into, while at
the same time we will continue to take the steps necessary to enforce Security
Council resolutions to ensure the weapons of mass destruction are not spread by
the North Koreans.

Q Well, in terms of -- just one more question --

MR. GIBBS: Sure.

Q -- of the policy, are we only against people who might get the weapons
and not against those who have already gotten them and could use them?

MR. GIBBS: Well, look, I think the spread of -- the President has said
numerous times, the spread of a weapon of mass destruction, the spread of nuclear
materiel and nuclear weapons is our number-one worry and cause of concern for
national security. He has outlined a series of very aggressive steps as it
relates to nuclear proliferation that we will continue to work toward and
implement over the course of the next many months and years.

Obviously we have great concern in a nation that would try to acquire, as we


would a group trying to get a hold of a weapon inside of a nation that already has
those weapons.

Chip.

Q Back on health care. You said the President doesn’t want to draw any
lines in the sand on public option, but doesn’t that put Democrats in a quandary
when they go home and they hold town hall meetings and they talk to constituents
and they say, where do you stand on a public option -- they don't know what to say
because they don't know where it's going to end up, they don't know what the
President is going to ultimately -- if they say, yes, I support a public option,
and they come back in the fall and it's not on the table anymore, then they've put
themselves out on a limb for no reason. Aren’t you making things politically
difficult for Democrats by not saying, yes, he wants a public option in there,
period?

MR. GIBBS: Again, we've outlined our principles. What's most important here
is, as I've said here a bunch, we get choice and competition in what can tend to
be a very restricted market for private insurance.

I have not noticed down the street a shortage of personal opinion, one way or the
other. So I think if somebody is asked about where they sit or stand on that
issue, I have no doubt that each member up there has their own opinion.

Q Well, they do, but for Blue Dogs, for example, it's a very delicate
issue and they're not going to want to go out on a limb on a public option and
then have that limb sawed off when they come back in the fall.

MR. GIBBS: What I think is important, Chip, is if we continue to work and


continue to make progress, we'll be able to go home by the end of the year and
explain to every constituent the steps that were taken to get health care reform
for every single American. I think that's the most important discussion. We want
to see progress continue to move forward. That's why the President had the
meeting here today, to get an update on where the Senate Finance Committee is.

Look, there are a lot of different opinions on a lot of different issues and
we'll continue to work through those as we get closer to health care reform.

Q Quickly on -- do you have anything on the unemployment benefits numbers


that came out today? And in addition to that, you touched on this on Monday, but
what is going on behind the scenes? How much work is being done and how dedicated
is this White House to extending unemployment --

MR. GIBBS: Well, let me take the questions a little separately here. I
mean, obviously -- look, I think as you see a lot of these statistics that come
out each and every week, you can see positive signs and you can see continued
signs for concern. Four-week average for first-time unemployment claims is down
less than the market expected in first-time weekly claims. Again, we look at -- I
think what's important to do also is look at some of that four-week average
because that smoothes out particularly some of the seasonal differences.

At the same time, you continue to have a growing number and record number
receiving those long-term benefits. That brings us to your second question, which
is over the course of between now and the end of the year, you are going to have
different people, based on the length of time on each of the receiving
unemployment insurance, you will have people exhaust that benefit. We're very
concerned about that. Obviously that's been a -- was a big part of the Recovery
Act and something that we want to see, and I think there's bipartisan support to
see, continued.

At the same time, we're also looking at working to continue benefits that
were extended as part of the recovery plan itself. Two different -- both kind of a
short-term and more of a medium- to long-term issue that the administration is
concerned about and wants to work with Congress to ensure that we are continuing
to help those that are victims of a struggling economy who are looking and
actively participating in a job search to help support their families. And we're
definitely committed to that.

Q Is passing that a top priority?

MR. GIBBS: Yes.

Yes, sir.

Q The President has said that when all is said and done he expects that
the unemployment rate will top 10 percent. Does he still believe that?

MR. GIBBS: Yes. Whether that happens tomorrow, I don't know. Again, for my
friends in the Council of Economic Advisers, I don't know anything on the specific
numbers. I expect we'll see several hundred thousand jobs lost. I expect that
we'll see an uptick in that unemployment rate come tomorrow.

You had a follow-up?

Q Your economic advisors who had fanned out on Sunday across the talk
shows, there was talk that the economic growth rate needs to be around 2.5 percent
in order to see some of this -- these same jobs being built back into the economy.
Is that the operating threshold that you're looking at?

MR. GIBBS: Well, I think what they were talking about in some ways were sort
of historical mathematical conclusions. I know there have been articles, as well.
You've got to see a growth rate at a certain level, and quite frankly, you've got
to see job creation point at a certain level in order simply to maintain an
unemployment rate. If it were to -- let's say it were to get to 9.6 or 9.7 -- in
order to see that happening again, month after month, you'd actually have to be
continuing to create jobs. That's why I think the President believes this will
creep up and soon hit and exceed 10.

We are obviously working to do all that we can to create growth, to lay the
foundation for long-term job creation in order to see jobs created and the
unemployment rate come down.

Q And a follow on health care. I'm new around here so I get a little
confused.

MR. GIBBS: So am I. Go ahead.

Q Is the President open to the possibility of utilizing the processes in


place in getting 50 votes for his health care plan instead of 60, if that's what's
necessary?

MR. GIBBS: Obviously the President meeting with Democrats and Republicans
means the President is interested in doing this, first and foremost, through
regular order. Obviously the option for reconciliation was contained in the
budget agreement, and we'd certainly crossed that bridge when we got to it.

Q So that's hanging out there like a sword of Damocles over these Senate
negotiations.

MR. GIBBS: Unclear how it's hanging -- (laughter) -- but it's certainly out
there.

Q And the President is open to a bill that does not ultimately include a
public option?

MR. GIBBS: The President is open to a bill that increases choice and
competition. I've got to figure out how many times you guys have asked and I have
said -- it's great discipline on both of our parts.

Yes, ma'am.

Q You said that this meeting today is not a negotiation. But -- and he is
going to get a status update presumably on all the various issues. Is he planning
on weighing -- did he plan on weighing in on his views on any of the issues that
are on the table?

MR. GIBBS: Well, again, I don't have a debrief from him or the team on what
happened exactly in the meeting. I know that -- I have no doubt that they
discussed where everybody is on certain issues --

Q Including the President?

MR. GIBBS: Including the President. And I'm sure they discussed --
continued discussions on how to bridge some of those differences. I don't -- what
I'm trying to tell you is this was -- this was not -- there weren't three
envelopes where we opened all three and then figured out how to get from one to
three and okay, that issue is solved and now the next issue. This was the
President hoping to figure out and continue to monitor the progress that's being
made throughout now, and quite frankly, hoping to ask them to continue to work
throughout August.

Q A monitor seems a little passive, as opposed to -- and I realize


"negotiate" is very active, but is there -- is it somewhere in between?

MR. GIBBS: He's tired today. (Laughter.) No, I mean --

Q Sort of -- are they just saying "this is where we are," and he says,
"okay, thanks for the update," or is it, "have you thought about this?"

MR. GIBBS: No. I mean, the meeting lasted presumably longer than presumably
what that would entail. I hate to get ahead of a readout just because I haven't
gotten one myself. But I don't doubt that discussions continued on many of those
issues.

Q And then on a separate subject, looking just ahead to after the August
recess, does the White House anticipate putting any new issues on the
congressional agenda that are not -- you obviously have health, energy, financial
regulation -- those are huge issues. Do you think that that's going to do it for
the remainder of the year, or do you anticipate anything new?

MR. GIBBS: You know, I haven't talked to leg affairs specifically about
this. Obviously, that is, as you mentioned, a decent amount. Obviously, we've
got appropriations bills that we have to finish to get through the next fiscal
year. Let me get a better update from them. I mean, obviously, I think there are
a number of issues. Whether they make it to the floor this year or not we'll
continue to monitor and work on -- or monitor and negotiate -- so that we can --
I'll take both the passive and the active voice on each of those.

Yes, sir.

Q Just to clarify one thing going back to the Bill Clinton trip, kind of
unusual for you to characterize someone other than your boss and you said this was
based on his history, but do you have direct knowledge --

MR. GIBBS: No --

Q -- that he did urge North Korea --

MR. GIBBS: No, no, and I think that's -- I think I -- I hope I previewed
that enough. I mean, I think if you simply look at where he has always been on
this issue and on the agreements and the work that he did with Kim Jong-il's
father on denuclearization, I'm simply extrapolating from that. I have not been
-- I have not heard the debrief on the specific conversations or what impressions
the former President left North Korea with.

Yes, sir.

Q I have kind of a clean-up question on that, too. Is it fair to say that


the President would be getting his Clinton briefing before he leaves for Mexico on
Sunday?

MR. GIBBS: You mean whether he will see President Clinton before then?

Q See him, hear him, have his briefing before he leaves.

MR. GIBBS: Let me make sure I understand. Whether President Obama will -- I
don't know whether President Obama will meet with President Clinton prior to
leaving for Mexico. I have -- I do believe that extensive debriefing of former
President Clinton will happen very quickly and that President Obama will be
brought into that dialogue to learn what former President Clinton learned as
quickly as possible. I assume that happens before we leave on Sunday.

Q But the intention is to have President Obama and President Clinton talk
to each other. Is it --

MR. GIBBS: I think they want to see each other at some point. Again, I
don't -- I seriously doubt that's going to happen between now and Sunday, again,
just because of the coordination of their schedules.

Q Okay, can I follow up on another thing? A couple of months ago, the


White House and the drug manufacturing industry reached a deal to cut drug prices.
The New York Times has a story this morning, which I'm sure you've seen. How is
the administration going to handle the House's demand to cut drug prices further
and not blow that deal apart?

MR. GIBBS: Well, again, to take -- I'm going to go back to the passive
voice. I'm not going to get ahead of negotiating in a conference committee,
though I appreciate the hopeful status update on where the negotiations are.

Q But you could if you wanted to. (Laughter.)

MR. GIBBS: It would be a little -- a little brave of me. I do think --


look, I think the goal of all of those at the table, particularly the President,
is to see costs come down and to see progress made on that. But I don't want to
get ahead of negotiating what might be bill differences.

Q But what do you think of the House's demands for additional cuts?

MR. GIBBS: I think that everybody shares the goal of cutting costs of health
care, but beyond that I don't have anything specific.

Major.

Q Robert, Dr. Romer left the door open to a second stimulus in 2010,
saying at one point, a good doctor always monitors the situation. Is that a fair
assessment that the administration will wait until the beginning of next year
before making any concrete decision about a second stimulus?

MR. GIBBS: Well, timing aside, I think the good doctor -- both Romer and the
good mythical doctor they were speaking about -- said exactly what we've all said,
which is, first and foremost, our focus is on implementing the Recovery Act that
Congress passed. Secondly, we will continue to monitor the economic situation.

If there are ideas that the President or the economic team believe can and should
be taken in order to accelerate the recovery and to lay that foundation, we'll
certainly take a look at that. Obviously, I don't anticipate anything new in the
near term, except as I said, the implementation of the recovery plan.

Q Dr. Romer was also asked directly to say whether or not the President would
raise taxes on the middle class in his first term. Her initial reaction was, "Can
I go now?" Then she said, well, the first priority is to lower costs on
government through health care. But at no point did she say the President would
not raise taxes on the middle class in the first term. This would now be the
third economic advisor of the President who, given the opportunity to say
declaratively that would not happen, has not.

MR. GIBBS: Do I count as an economic advisor?

Q So I'm asking you to help us understand why three people who are in
every meeting with the President every day on the future of his economic policy
would, after three times given the opportunity to say it's not going to happen,
punt all three times.

MR. GIBBS: Major, in fairness to her and to me, I will be happy to take a
look at the transcript.

Q It's accurate what he said.

MR. GIBBS: I'm not questioning the veracity of Major. I do appreciate the
ability to at least look at what the good doctor said. I'm going to give you the
same answer that I gave you on Monday, which was the President's answer.

Q And what would account for this what appears to be a repetitive


disconnect between the President and his economic advisors, who meet with him
every day on these topics?

MR. GIBBS: And I'll have a better answer to that when I get a chance to look
at what she said.

Q Following up on what Jake asked about the fishy e-mails, would it be


more likely to assume, Robert, that the White House would be curious about people
who would be e-mailing them about things that they'd consider either disingenuous
or inaccurate in order to keep in touch with them as part of an ongoing dialogue
about their support for the White House efforts on health care -- meaning you're
not looking for people who are saying things that are not accurate, but you're
looking for ways to always expand the number of folks who e-mail you or Organizing
For America as a political tool to keep in touch with them?

MR. GIBBS: Well, let's -- hold on. Let me -- I'm not entirely sure what the
question was, but let me put down some fence posts in the speech. OFA and the
White House Web site, as you well know, are not in any way connected. Point
number one.

Point number two, I think I was -- as Jake vouched for the veracity of your
statement, I think he will equally vouch for the veracity of mine in saying that I
was pretty clear that we're not collecting names from those e-mails.

Q He was pretty clear. (Laughter.)

MR. GIBBS: I like the fact that, like, Jake is the arbiter here of --

Q Well, I guess what I'm trying to figure out is --

Q Ombudsman. (Laughter.)

Q What I'm trying to figure out is why ask for them then? I mean, what's
the goal here?

MR. GIBBS: Well, Major, as I said to you before, as I said to Jake before --

Q And the staff that you have assembled here is obviously very capable of
detecting all sorts of conversations in America about all sorts of issues and
responding and putting together briefing points --

MR. GIBBS: -- we get stuff about what's said on FOX News all the time.
(Laughter.)

Q I wouldn't be surprised. I just don't understand what the particular


goal is of seeking --

MR. GIBBS: The particular goal is to --

Q -- e-mail the White House about things -- about this particular issue.

MR. GIBBS: Well, it's to get misinformation and to clarify for everybody
what the misinformation is. I don't -- I hope that's not new. It doesn't
certainly seem to be.

Q What, the existence of so-called misinformation, or the White House


soliciting --

MR. GIBBS: No, the --

Q -- descriptions in e-mails?

MR. GIBBS: -- the White House looking to correct misinformation. When you
make a mistake in your report, sometimes I e-mail you; occasionally I call;
sometimes I just throw something against the wall. Occasionally it's all three.

Q You ask Jake if Major makes any mistakes in his reports. (Laughter.)

Q Never.

MR. GIBBS: That would be -- let's not put Jake in that position. But,
Major, we've discussed in here seniors having a misimpression about what is
contained in the bill. We've talked about all sorts of things that are
misconceptions in here.

Q -- all the thousands of people e-mailing the White House.

MR. GIBBS: And all we're asking people to do is if they're confused about
what health care reform is going to mean to them, we're happy to help clear that
up for you. Nobody is keeping anybody's names. I do have your e-mail. That is
--

Q As I have yours.

MR. GIBBS: Maybe I assume that's because I assume future mistakes, but I'm
not going to say that. (Laughter.) But nobody is collecting information.
Everybody is trying to give people only the facts around what we all understand is
a very complicated issue.

Yes, sir.

Q I know you said you haven't talked to the President about the meeting
today with the Senate finance members, but did you have any sense going in what he
thought of the proposal taking shape in the committee?

MR. GIBBS: Look, I think we've heard various reports. I think part of what
he wanted to do was to get that update on where they were on different aspects of
the legislation, and see how that comported with the principles that he's
outlined. But again, as you said, I have not gotten a full debrief on that.

Q Robert, on that same subject, if I may, the President is not frustrated


with the pace of these bipartisan negotiations? And what did he mean yesterday by
saying if there's not agreement by next month, I’m going to have to reassess?

MR. GIBBS: Well, we want to get health care reform done. We've had this
debate, as I've said before, for four decades. The issues aren't different;
they're the same. Cost continues to skyrocket for families and small businesses.
People lose their health insurance and people fall prey to insurance companies
that discriminate against preexisting conditions, kick you off your insurance when
you've become too sick. All of those things the President wishes to change and to
do it this year.

Q He is frustrated with the pace?

MR. GIBBS: No, he's frustrated with the fact that millions of people are
watching their costs go up; they're watching their insurance company dictate
whether or not they're going to get medical treatment. I think that's a
frustration to the President, members of Congress and members of the American
people.

Yes, sir.

Q Do you know how many e-mails have been sent to the flag at
whitehouse.gov address? And, secondly, isn't the White House required by law to
save all correspondence it receives, so will it be informing individuals whose e-
mails have been forwarded that they might want to have a chance to correct the
historical record about the alleged fishiness of their e-mails?

MR. GIBBS: I, for the life of me, didn't understand your question.

Q Is the White House required to save the e-mails?

MR. GIBBS: Obviously, the National Archives documents correspondence with


the White House.

Q So the people whose e-mails have been forwarded, they won't be informed
that their e-mails are being forwarded to the government?

MR. GIBBS: Maybe I'm missing something. I'm sure you're hashing some
nefarious plot, but I, for the life of me, can't understand it.

Yes, sir.

Q Yes. Thanks, Robert. Yes, just to go back to the 2003 video, and separately
from any question as to whether those were mischaracterization of the legislation,
President Obama did say in 2003 that, I happen to be a proponent of single-payer
universal health care plan. As recently as last June he said -- told the AMA
there were some countries where a single-payer system works pretty well. And I
just want to ask, is that the President's preference, or was it --

MR. GIBBS: I think the President --

Q -- has it changed since that time?

MR. GIBBS: The President's preference on a health care plan he had an opportunity
to outline, debate, and discuss in an almost two-year campaign for President from
2007 to 2008.

April.

Q Robert, going back to two questions, one on unemployment, you said that you
were still expecting the unemployment rate for mainstream America to hit 10
percent. Are you expecting the unemployment rate for black America to still hit
20 percent by the end of this year?

MR. GIBBS: I don't know what the number will be. Again, I expect that it is -- I
think we've done briefings on this in terms of recovery and things like that, and
expect that the unemployment rate will continue to rise for all Americans. I
don't have a specific number. I don't know that the President has characterized a
specific number for African Americans.

Q For obvious reasons, there's a reason why the black unemployment is singled
out. So you're saying it will go up. Do you expect, though, that it will stay
double that of mainstream America -- mainstream Americans?

MR. GIBBS: Let me get some guidance from the econ guys on that.

Q Okay, and then on --

Q You need to call them anyway, don't you?

MR. GIBBS: Apparently. (Laughter.)

Q Then on the issue of the Supreme Court, what is the work that the White House
is doing now for the next possible Obama pick for another justice for the Supreme
Court?

MR. GIBBS: I don't have any news to report on the notion -- on what happens next
if there is another vacancy. I do know the President is -- as we talked about
this morning, you will hear from the President today directly if, as we expect,
Judge Sotomayor becomes Justice Sotomayor today. I think obviously you commend
Democrats and Republicans for getting her -- hopefully -- confirmed in a very
timely way in order for her to participate in the Court's activities in September
with the hearing of the case that's been held over, and in the work that they'll
do before the session begins, the Court's term begins, to pick the important cases
that they'll work on next year. And we're enormously proud of the bipartisan
support that she's likely to get.

Q Once again, going back to the work that the White House is doing, is it
possibly something -- I understand that the work was happening in the transition,
possibilities if this President were to become President. So would it be just a
continued --

MR. GIBBS: Well, in the transition it was pretty clear he was going to become
President, but, yes.

Q I mean, well, even before you guys officially announced the transition,
before he was even President-elect, we understand you guys were working on
possibilities. And what I'm saying is once he became --

MR. GIBBS: I'd have to check that. Go ahead, I'll play along.

Q But is it just a continuation from prior to arriving at 1600 Pennsylvania


Avenue, from the work that you did then to now for a possible next pick?

MR. GIBBS: Again, I don't -- I'm not trying to be squirrelly. I don't -- I have
not heard any discussion about work that has happened above and beyond work that
had happened prior to the President's announcement of Judge Sotomayor in
anticipation of the possibility of additional picks. I think you've got --
obviously, there were a number of names out there and that pool continues.

Q Middle East. Has the administration asked Israel to freeze settlements for
one year in order to encourage the Arab states to offer concessions and
normalizations? There's a couple of reports out there in Israel today.

MR. GIBBS: I think the President -- without getting into any specifics, the
President has been clear in outlining the steps he believes that Israelis,
Palestinians, and Arab states should take in order to achieve a lasting Middle
East peace, and that includes a freeze on settlements.

Q Robert, ahead of tomorrow's unemployment report, I just want to make sure I


understood something you said before. You're obviously very concerned about
helping everyone find a job, and yet when you describe the unemployment figure,
you don't use the higher figure that reflects those very workers. I'm talking
about the Labor Department's U3 rate, which is 9.5 percent. But isn't the real
unemployment rate that reflects people who are really struggling and can only find
part-time work -- that's 16.5 percent. So why don't you use the higher standard
if it's more accurate?

MR. GIBBS: Well, I don't know what Mike's question -- I think Mike's question was
based on -- well, since Mike was asking me whether it was going to go to 10, I
assumed the figure he was using was the one that hadn't at that point eclipsed 10,
since that would be a little redundant.

Understand that unemployment figures only denote, as you said, people that are --
that have -- that continue to look for work and don't consider themselves so
unlikely to find work that they've stopped looking. I don't know that one figure,
whether it's those that have stopped, those that are underemployed, those that
wish to be working full-time and are working part-time, or just those that simply
the Bureau of Labor Statistics say are employed or unemployed -- I don't know that
one number in and of itself can tell the story of economic devastation that we've
seen and the concern that the President has for getting the economy back on track
and creating jobs.

Q But isn't the higher figure more accurate because if you're out of work
and the only thing you can find is 20 hours a week at Starbucks or whatever,
that's not exactly a full-time job. Why aren't people like that counted in --

MR. GIBBS: No, that's a part-time job. Again, I don't -- it's not for me to
say or to judge the efficacy of each -- or what each figure delineates. The
President will be concerned about joblessness for as long as there are people that
want to work and can't find it. Whether that number is an unemployment rate,
whether that's the number of people that can only find that 20-hour job at
Starbucks and wish they could find a 40-hour-a-week job, the President will
continue to be concerned about job loss.

Sam.

Q I want to take one more whack at this New York Times article about the
behind-the-scenes deal with pharmaceutical companies. What measures is the White
House willing to take to ensure that this agreement remains in place and that no
extra cost-saving measures are put in place by the House? Is the White House
willing to do anything? Are you guys going to set a line in the sand? Can you
move beyond this agreement?

MR. GIBBS: Well, we've not laid down any sand and I've not drawn in it.
Again, the President has discussed throughout his time as a candidate and as
President the importance of and ways that we need to cut costs for seniors.
PhRMA, the Senate Finance Committee, supported by the White House, entered into an
agreement that would cut the costs for seniors who -- millions of whom fall into
the doughnut hole as part of Medicare Part D's benefit that was signed into law a
few years ago. This will help fill that doughnut hole for millions of seniors,
and some of that money will be used for health care reform. That's the goal of
that agreement and that's the goal of our White House.

Q If they extract money from pharmaceutical companies beyond that, is that


something that the White House would --

MR. GIBBS: Well, we feel comfortable with the amount of money that has been
talked about at this point.

Q Robert, there is some unhappiness on the Hill among Democrats at the


pace at which Senator Baucus is moving and sort of the way he is moving. Does the
President share that impatience?

MR. GIBBS: Can you be specific?

Q Well, that somehow in the end the Republicans are not going to be there
and that he is being strung along by them. That's the sense.

MR. GIBBS: Well, again, I think the President's main goal is to do all that
we can to move forward, again, with that goal of getting something done for
families, small businesses, and for people throughout this country this year.

I don't believe the President thinks that -- I know the President doesn't
believe that he thinks this is -- that not meeting this August goal for the
Finance Committee imperils in any way health care reform. It gives us all a
chance to continue working toward progress, and change isn't going to happen
overnight, and we certainly understand that.

Q Do you know anything about the plans for the swearing-in of Judge
Sotomayor?

MR. GIBBS: No, I don't. I promised to check on some of what might happen
here as a result of that. I'll look at that and try to have something in the week
ahead tomorrow. I would also encourage you to contact directly the Supreme Court
and they may have a better sense of when she would be sworn in.

Thanks, guys.

END
1:30 P.M. EDT

*****

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