Press Briefing by Press Secretary Ari Fleischer, May 16, 2001

by Lawrence Ari Fleischer

The James S. Brady Briefing Room

1:40 P.M. EDT

MR. FLEISCHER: Good afternoon. The President today called Silvio Berlusconi to congratulate him on his election victory in Italy. They had a warm, friendly call, and both said they look forward to close cooperation between the United States and Italy. Mr. Berlusconi said he hoped to see the President at the June 13th NATO leader meeting and in Gothenburg at the U.S.-EU leaders meeting. And of course, they both look forward to the meeting of the G-8 in Genoa. The President congratulated Mr. Berlusconi and his coalition on their apparent victory in the Italian Parliamentary elections.

And on personnel, there are several announcements today. It's a busy personnel day. The President intends to nominate P.H. Johnson to be federal cochairperson of the Delta Regional Authority. The President intends to nominate Joseph M. DeThomas to be Ambassador to the Republic of Estonia. The President intends to nominate Theodore Kattouf to be Ambassador to the Syrian Arab Republic. The President intends to nominate Maureen Quinn to be Ambassador to the states of Qatar. The President intends to nominate Arlene Render to be Ambassador to the Republic of the Ivory Coast. The President intends to nominate Marcelle Wahba to be Ambassador to the United Arab Emirates. And the President intends to designate John Higgins as Acting General Counsel of the National Labor Relations Board. And finally, the President has designated Peter Hurtgen to be Chairman of the National Labor Relations Board.

We'll have an abundance of paper for you shortly, if you don't have it already.

Q Mr. Fleischer, when did the White House realize that the report contains some short-term relief for people paying high energy prices?

MR. FLEISCHER: The President has been very concerned all along about the prices that the American people pay for energy. And that's why, going back to September of last year, the President said that the United States needs a comprehensive energy plan. One of the reasons prices are high today is because our nation has not had one for so many years. So in the plan that the President will propose tomorrow, the focus will be a comprehensive solution that helps consumers, now and in the future, by creating incentives for conservation, by creating incentives for more supply and for modernization of the infrastructure.

Q And what is the "now" part? How does it help consumers now who are paying high gas prices or aren't getting --

MR. FLEISCHER: One of the reasons, again, that prices are high is because our nation does not have a policy to deal with energy prices. By, for the first time in years, focusing on a comprehensive solution, the President is confident that markets will see that more supply is on the way, conservation is starting to be emphasized, and the combination of more conservation and greater supplies has an effect on markets; as those markets are effected, has a ripple effect that benefits consumers, benefits the economy and helps to lower prices.

Q Ari, I talked to a market analyst today who said it will take at least a year or two to expand refinery capacity or do any of the things that address what's causing the problems now. If you're referring to the gasoline market, it's the fact that there isn't a refinery capacity, there are local shortages and so forth. So how do you address that?

MR. FLEISCHER: Let me give you an example of ways to help get prices down as quickly as is possible. And that is one of the steps that the President has directed, is for the federal government to do its part in conserving energy by directing the Department of Defense facilities, for example, to reduce demand by 10 percent. That helps relieve pressure on prices and it does so immediately.

And the government is going to be looking at other options it can take, and the plan will create incentives for individuals to conserve. And, certainly, the more the President talks about the need for people to conserve, the more conservation there will be. That clearly is an immediate step. Many of the other steps have an effect on prices over time, and that's why the President has had this focus on a comprehensive plan.

Q Are you going to streamline the gasoline formulation rules for the reformulated gasoline? People say that's a big problem.

MR. FLEISCHER: As you know, the plan will be out tomorrow. You'll be able to judge the contents of it. But there are some proposals that would have a very harmful effect on the environment, that would waive or create problems under the Clean Air Act. And the President wants to make certain that as America develops a comprehensive energy plan, we do so in a way that is very sensitive to make sure we have a clean environment.

Q Have you seen reports that it looks like oil inventories are starting to increase, and that could bring the price down a couple of weeks from now? And is that influencing your assessment that this plan will provide short-term relief?

MR. FLEISCHER: Well, clearly, any time you're looking at the way things are priced, if inventories go up, that has a helpful effect on making prices go down. And if that were to be the case, then inventories of gasoline were to go up, that would have a helpful effect on price, of course.

Q But you're talking about the idea that the report will instill confidence in the market and prices will come down. But just following on what Kelly said, isn't it really serendipitous fortune in terms of timing that the prices are forecast to come down following the Memorial Day weekend, and that if you get out there tomorrow and say we're going to instill confidence in the market, and then next week prices do come down, you say, see, it worked; but really, it was heading in that direction anyway.

MR. FLEISCHER: I appreciate your crystal ball. (Laughter.)

Q I'm just going by Energy Department forecasts, that's all.

MR. FLEISCHER: It's a reflection on what President Bush has always said are his priorities. And again, our nation has not had a comprehensive energy policy in years. And that's contributed to the sky-high price of gasoline and energy. President Bush, in the campaign, cited this as a major problem, and that's why he alone in the campaign and he alone in Washington, when it came to people who were taking action, addressed this issue in September last year. He ran on it, he said he'd do it. And upon taking office, he immediately created this energy group to get it done.

And today he will receive the report from the energy group, and tomorrow he will announce it. It's a sign of the fact that the President does understand just how severe this problem is, and he wants to make sure the American people don't have to pay sky-high prices because of a lack of an energy policy.

Q He also pledged last March to roll back the gasoline tax. Is he going to do that?

MR. FLEISCHER: I'm not familiar with that, John. Would you care to cite a quote that the President said? I don't think you will.

Q Yes. It was a speech, or an appearance in Plant City, Florida, March 12th, in which he said he was going to roll back the 4.5 cent a gallon, "Clinton gas tax," as he called it.

MR. FLEISCHER: The President always said that -- that was at a time when Congress was taking a look at doing that last summer -- the President said that that was not the focus of his efforts and it would be something that he would take a look at, but that it was never a question, something the President endorsed during the campaign.

Q To the best of my recollection, he said he would roll it back.

MR. FLEISCHER: No, he has not.

Q Can I follow, just one more thing on this? Why now? This is the first time, today, the administration is saying that its report will help in the short-term. So what has changed within the White House and its calculation or what it's seeing on the horizon to make you say -- you've not before said it would provide short-term relief.

MR. FLEISCHER: I think the administration has been very consistent about it. The President has said, and the administration has made clear, that there is no magic wand. But there is a need for a comprehensive policy. And upon the announcement of a comprehensive policy, markets will see, and consumers will see, that this administration is serious about helping protect people from high prices for gasoline and for energy. And that helps create an environment for prices to go down, for supplies to go up, and for people to have the energy and the gas they need.

Q Ari, so I could just be perfectly clear about this --

MR. FLEISCHER: I hope so. (Laughter.)

Q You're saying that the promise of increased future supply in the President's plan, the comprehensive approach and so forth, will result in lower gasoline prices this summer?

MR. FLEISCHER: What I'm saying, Keith, is that one of the reasons that prices are sky-high this summer is because the federal government has done nothing about it for years. That will come to an end tomorrow. The President will have a policy announcement tomorrow that will signal the seriousness to the market and to consumers that this administration cares about the price of energy and cares about the price of gasoline and has a serious plan to do something about it.

Q But what you're saying, it sounds to me, is that policies over the last 8, 10 years have helped bring us to this situation today. What I'm asking about is whether or not what will be announced tomorrow, and the promise of future reform and so forth, is going to lower gasoline prices this summer?

MR. FLEISCHER: I think you should just watch events and let them unfold. The President will announce his plans tomorrow and then you'll be in a position to judge.

Q When economists say that it takes longer than that -- I mean, you're not giving us a time frame, per se, but they're saying, okay, the markets just take a lot longer to react, probably --

MR. FLEISCHER: Different aspects take different amounts of time.

Q But what, specifically, are you expecting through short-term --

MR. FLEISCHER: As I've already indicated, the President is taking action to help in the immediate here and now by pushing the United States to conserve more. That's something the President believes in, and that's something his plan will reflect. And to the degree that people conserve more energy immediately, that has an immediate impact. And the President believes in that impact, and that's one of the reasons conservation is such a prominent part of his plan.

In fact, the plan is going to have 105 specific recommendations in it; 42 of them will deal with conservation, with environmental protection, and with alternative fuel development; 35 of the 105 recommendations will deal with creating more supply and modernizing the American infrastructure; 25 will deal with international initiatives to increase energy resources. So as you can see where the President's priorities line up, a host of his recommendations focus on things like conservation.

Q Mr. Fleischer, first of all, why did -- the President recently quoted -- or cited the $100-billion short-term tax relief currently on the Hill, and the tax package placed there by Congress, not by the President, as something that will be very helpful to solving the energy crisis for consumers. And yet, why did this -- if I understand this correctly, the White House tried to get that number reduced or removed on the Hill when they were putting that package together. How do you --

MR. FLEISCHER: No, if you recall, the President said first that the tax bill that the Congress is considering should be made retroactive. The President called on Congress to do so. The House passed a retroactive measure that had $6 billion worth of relief. When it came to the Senate, it had $100 billion worth of relief, a provision the President supported when they took that action. He issued a statement supporting the Senate action. We'll see what the ultimate outcome is when it goes to a House-Senate conference. It also still has to emerge from the Senate floor.

But the President does feel very strongly that tax relief is the answer to many people's problems, because it puts money in people's pockets for them to use to solve the problem they identify as the biggest in their lives. For some families, that's going to be the high price of gasoline. For other families, it's more money that they can save and invest. For other families, it's money to pay off their credit card bills. That's the beauty of letting people keep the money that they, themselves, earn. It has many purposes, it solves many people's problems.

Q A lot of negotiators on Capitol Hill will say that you guys didn't want the full $100 billion because it's going to force you to trim back on other parts of the original tax plan.

MR. FLEISCHER: If someone was suggesting that the President would prefer less tax relief than more, I would urge them to reassess that assessment.

Q -- tax relief. A separate question

Because it's clearly part of the talking points that everybody has to blame the previous administration for our current energy crisis, I'm curious when, at what point in an administration cycle does blaming the past President cease to be effective?

MR. FLEISCHER: It's not a question of blame. The President is much more interested in solving problems. But as the President said last September, our nation has not had a comprehensive national energy policy, and that's why he announced one in the middle of a campaign -- a very detailed and specific one. And many of the provisions that the President talked about last year will be in the plan that comes out tomorrow. You've already seen some evidence of that.

In September, the President said the United States should give people tax credits for putting solar panels up on their roofs. The President ran on it, it was in the budget he submitted to the Congress, and it will be part of the plan. He believes in it.

Q Do you really mean to say that this administration is not accusing the past administration, blaming the past administration for our energy problems, given language like the Vice President, himself, saying the Clinton administration did stupid things? Isn't that blame?

MR. FLEISCHER: It's not a question of blame. But our nation would have been better off if a comprehensive national energy policy had gone into place years ago. And let me give you an example. The President, tomorrow, will propose that a small sliver of the Alaska National Wildlife Refuge, ANWR, be open for development -- approximately 8 percent. ANWR is an area the size of South Carolina. The President will propose that an area about one-fifth the size of Dulles Airport be made available for energy exploration.

I remember when that provision was considered in the United States Senate in 1989, and it was not accepted. Had that plan been accepted 11 years ago, our nation would have more supply today than it otherwise does. That's an example of things that did not happen in the past. That's why when people say, well, what about just the short-term, what about the long-term? The problem is if the government never focuses on comprehensive solutions that include both the short-term and the long-term, the government never gets around to the long-term, and the government lurches from one crises to the next. And that's why the President has proposed a comprehensive approach.

Q Can I ask you about those numbers that you just gave us? You have a lot of conservation measures listed here. Are you trying to dissuade us from the notion that we've, frankly, been reporting for weeks that the thrust of this policy is more supply? Are you trying to sell us now that the thrust of this is conservation?

MR. FLEISCHER: No, I'm just giving you the number of recommendations as they break down. You also have to put them in the context of the use of energy in America. And the use of energy in America right now is approximately -- I think it's 84 percent that comes from fossil fuels, and the remaining comes from renewables or nuclear. We are a nation that is principally reliant for every flip of the switch, for every use of an air- conditioner, for every drive of a car -- almost every drive of a car -- on fossil fuels. That does represent the largest amount of energy use in America.

There are a series of other renewables -- wind, solar, biomass -- that make up a smaller sliver. You have accurate figures now on what number of recommendations the President will propose that focus on that smaller sliver.

Q In terms of solving the problem, we are correct in continuing to report that the President believes that most of the solution still lies in producing more energy and, especially, more fossil fuels?

MR. FLEISCHER: The President believes it has to be a comprehensive focus that involves both conservation and production.

Q Break it down for us. Eighty percent --

MR. FLEISCHER: The report will be out tomorrow and you'll be able to judge it for yourself.

Q Ari, back to the question of how soon this will affect things, some of us may have misunderstood this morning, because of your use of the word "spot market," which is generally understood to be two or three weeks out -- were you suggesting that just the mere announcement of the President's policy and its content would have an impact on gasoline prices over two or three weeks? Or did you mean medium-term?

MR. FLEISCHER: I'm suggesting the basics of supply and demand and economics, and that this is a serious plan. This is a comprehensive plan. This is a plan that I think people are going to recognize as some serious work by the government to solve an important problem. To that degree that people who become convinced that there will be greater conservation and there will be increased supply, that has an effect on markets. That effect on markets ripples through the economy to the benefit of the consumer.

Q But not in the first two or three weeks, you're not suggesting?

MR. FLEISCHER: I didn't quantify the time frame, but I've said it can help to the degree that people understand that it has a helpful effect on reducing demand and a helpful effect on increasing supply. That's good for markets; that's good for consumers; that's good for prices because they get lowered.

Q -- were saying that the administration had zero -- funding for conservation and alternative energy? Is that accurate?

MR. FLEISCHER: No, that's not accurate. As I indicated already, the President's proposal that he made last September -- it was in the budget that he released in February, dealing with solar power to help people warm and cool their homes. The budget will include a series of tax incentives dealing with other renewable types of fuels -- wind, other things of that nature -- wind, solar, biomass.

Q Anything that's not in the budget that's in his plan in terms of tax incentives?

MR. FLEISCHER: There are 105 recommendations I'd have to go through really thoroughly to give you an analysis on that. Let me also mention, of course, there are other things in the plan that the President has talked about to help low-income people through conservation -- weatherization of people's homes so their homes are more energy-efficient; that's a part of the President's plan. Increasing aid for people on the LIHEAP program, which is a program that helps low-income people pay for their heating bills, in some cases, their electric bills on their air-conditioning; that's a part of the President's proposal tomorrow. These are all examples of the comprehensive nature of the President's approach to solving the problem.

Q Can I follow on Jim's question, Ari?

MR. FLEISCHER: Whose question are you following on? I thought you said James.

Q Well, Jim, James. Anyway, tell us what you mean by short-term. Because most of the analysts on Wall Street that I've talked to over the last couple hours say that the street has already taken into account what they expect this report to include -- conservation measures, increased productivity, increased transmission of power and things like that, all of which they know will take years.

MR. FLEISCHER: I think that's an answer you will be able to judge over time. The President will propose on this tomorrow, and then you will be in a position to evaluate that.

Q What do we mean by "short-term"?

MR. FLEISCHER: I've just indicated that's something you will be able to judge over time.

Q Ari, can you explain why the White House is not releasing the names of the individuals and groups that have been advising the administration on this?

MR. FLEISCHER: Well, under the law, the White House is complying with all matters of law, all matters containing the energy group's work. Individuals on the energy group met with a series of people -- I think it was more than 130 -- that represent people from the renewable community, the environmental community, the energy development community, the suppliers, oil companies -- a host of organizations they met with. Let me check and see what the status of that is, and I'll be happy to see if there's anything further I can get you.

Q But a number of groups have asked for -- I think the environmental community, Democrats have asked for a list, and the administration has said no, in part, wanting to not kind of list all the people that have come in here -- privacy --

MR. FLEISCHER: Let me check what the status is. I don't have the list of 130 with me.

Q But can you comment a little bit on the strategy of having them closed-door meetings, and why you would want to go that route?

MR. FLEISCHER: Well, often, groups want to come in and meet with the White House and not have everything they say be part of a public domain. They appreciate that. It sometimes gives for better exchange between groups, a better give-and-take. Some groups, of course, are going to want to be more public about it. For example, it's no secret you've seen many people coming in here this week, including Jimmy Hoffa, including the President of the Carpenters Union, a group of people who represent the renewables were here yesterday talking about solar, and I saw many people in this room talking to those folks. So I don't think there are any big, great secrets out there. Certainly, the press has been talking to many of the groups that the White House has met with.

Q If I can follow up on --

MR. FLEISCHER: Please.

Q -- but the environmentalists say that they have not been there, so they say that these meetings are really more the lobbyists and industry representatives. Environmentalists have not gotten --

MR. FLEISCHER: There have been a host of environmental organizations. I have read some of them -- for example, one of the wires carried a story that cited somebody from one of the major environmental groups who came in and met with the staff of the energy group.

Q What about -- they were complaining in The New York Times today that they met with the staff and not the Vice President, and the people that we just saw in the last couple of days have met with the Vice President.

MR. FLEISCHER: There's no shortage of people in every business who want to meet with the President or the Vice President. The White House tries to be as accommodating as possible. But also, meeting with the staff is a very instructive way to have your opinions heard.

Q Doesn't it say something about your priorities if certain industry groups are allowed to meet with the Vice President, but environmentalists, who are going to really also be impacted by this, get to meet only his staff?

MR. FLEISCHER: I think the plan will speak for itself on how balanced it is and how comprehensive it is.

Q Well, how would you characterize the level of input that environmental groups have had?

MR. FLEISCHER: I think they've had a serious involvement in the plan and an opportunity to have their thoughts heard.

Q I have a follow-up to that. The follow up is, last week the President said that the best way to address energy prices in the short-term was to pass his tax cut. Today you're saying the best way to address the energy crisis in the short-term is just by releasing this report.

MR. FLEISCHER: No, no, no, no, no.

Q So I'm just wondering if today's announcement supersedes last week's?

MR. FLEISCHER: There are two issues here. The President has said that tax relief is one of the most immediate ways you can help people who are paying high energy bills. I said that 10 minutes ago -- into this briefing. Passing tax relief -- and the President calls on Congress to pass tax relief before Memorial Day, before the busy driving season takes place -- gets money into the hands of consumers quickly. Any delays means money gets into the hands of consumers later, rather than sooner. And that's why the President believes that Congress needs to act, and act sooner. But in terms of a fundamental comprehensive approach to energy, the plan that the President announces tomorrow will have a broader effect on energy, which I said will ripple through the economy.

Q Early on in this process there were press reports of a lot of give-and-take within the administration about drilling in ANWR and the political environmental implications of it. Has the President ever wavered on that idea?

MR. FLEISCHER: No -- when you say the "political implications" of it -- no, the President in September said, this is a step the United States needs to take to promote energy independence and energy security. That's going to be reflected in the plan that the President announces tomorrow.

Q Ari, isn't telling people that they should use their tax cut to spend money on gasoline, isn't that really just sort of throwing money at the problem, and wouldn't that also help maintain the high price of gasoline by increasing demand?

MR. FLEISCHER: Keith, it's not taking money, it's so people can solve their own problems. That money is not the government's to throw, that's the people's money to keep.

Q But you're very clearly suggesting that that's something they could spend money on. Wouldn't that actually maintain the whole problem by keeping prices high?

MR. FLEISCHER: What I said is that the power of tax relief is people can use it for purposes as they deem best and as they see fit. There will be some families who are going to use that money to pay for the higher cost of energy. There are going to be other families -- because of the choices they make, not the government -- that will use that money to invest, to save. Other people are going to use it to pay off their credit card bill, as I indicated.

That's the beauty of tax relief. It's targeted to the needs that people find most important in their lives. The government doesn't have to tell people how to spend their money; people know best how to spend it, themselves.

Q Ari, what opportunities does the President have to review the report before embracing all of his recommendations?

MR. FLEISCHER: Oh, he's been part and parcel to all the decision meetings about the plan. He's met with the group many times. I think the final meeting, the decision meeting right before the plan went to the printer took place a week ago Friday, if I recall. He's been part and parcel.

Q So he has considered it and embraced it all now?

MR. FLEISCHER: Of course. Of course.

Q Both of the short-term fixes that you say will -- the President is proposing for energy prices are indirect -- a tax cut that will get to people at some point so they can cushion the blow of higher energy prices, and this psychological ripple effect through the economy. It's an acknowledgement that there is nothing specifically recommended in the proposal to deal with short term prices.

MR. FLEISCHER: Terry, the American people don't look to Washington for magic wands, they look to Washington for solutions that work. And the plan the President announces will be a comprehensive solution that focuses on conservation and development of energy resources, and modernization of resources, so that the nation can have an energy plan that works.

Q So why even claim that you've got short-term fixes? It sounds as if you're kind of grasping for a political fig leaf to slap on the program at the 11th hour to say you have a short-term fix when you don't.

MR. FLEISCHER: To state the obvious. California, which faces blackouts, is going to be benefitted from the fact that the federal government is going the do its part to conserve energy. By conserving energy it has an immediate short-term effect that can help lower prices and can avert blackouts. It is real, it is tangible, and it's meaningful, and that's why the President is doing it.

Q I have a question, but before that, one comment about energy. For the first time, 46 little children from the Indian school were here in the U.S. as part of a school subject and what they've been reading in the books they wanted to see in reality, and they liked it, including the White House. But they were surprised that they were reading in the books the energy crisis in the U.S. because they thought this is only in India. The question also I have -- the Vice President from the U.S. Chamber of Commerce, was speaking to the Foreign Press Center. He said -- amendment was not needed and it should be -- sanctions should be lifted on India and Pakistan because the amendment never worked. And also, several number of Congress wrote to the President --

MR. FLEISCHER: Let me ask you to talk with Mary Ellen about that question.

Q Ari, you've got a number of Republicans who apparently do not believe the President's plan does enough over the short-term -- Kay Bailey Hutchison for one is going to propose additional incentives and believes that the President would support such a move. Is that the case?

MR. FLEISCHER: Well, it depends on exactly what specifics are offered. The President is pleased at the fact that he has broken the pattern in Washington where finally the issue is being taken seriously, is leading members of Congress to offer their ideas and more proposals. So it depends on what she offers.

Q Ari, this international initiative, is the President trying to deal with some drilling in some areas that really don't have infrastructure? Like, for instance, today Charles Rangel outside was talking about the fact that Africa can help with these oil prices, especially the Nigeria area. Is that part of this international initiative, by any chance?

MR. FLEISCHER: Well, as you know, the President met with the President of Nigeria about a week or so ago, and the President of Nigeria did indicate that they were going to keep production at levels that would be beneficial to the American consumer and to the American economy. So that's a part of keeping supply up.

And to the degree that OPEC or other oil-producing nations keep supply at levels that are reasonable, the United States will benefit, consumers will benefit. It's also important, in the President's opinion, that the United States develop its own energy resources so we're not reliant on decisions that are made by foreign governments.

Q So the international initiatives really don't deal with new drilling. This 105 specific proposals --

MR. FLEISCHER: The international initiatives I mentioned, the 25 of them, deal -- again, take a look at all 25, and you will have a chance to do that, but many of them deal with things like development of energy supplies with Canada, with Mexico, trilateral agreements with those nations.

Q Ari, does everything in this plan require congressional approval, or are there going to be some important things that you think --

MR. FLEISCHER: No, there will be several things that will be done by executive order; there will be several things that will be done by -- that must be done only by Congress.

Q Can you talk in just sort of general areas, what areas the executive order stuff would be in?

MR. FLEISCHER: I think that's something that you may be able to get into tonight at the background briefing or tomorrow on the briefing.

Let me just -- on the briefing, the briefing will be at 8:00 p.m. tonight, as I indicated. There will be a handout available that summarizes some of the information for you. The briefing and the handouts will be on background. There will be no embargo, so you will be able to use the information tonight.

Q There's a lot of resentment building up in the West against the power companies, and across the country against the oil companies, about the price of energy. You've said that the administration will remain vigilant on that. But there's a difference between what's legal and what's right. Does the President believe that power companies out West and the oil companies have behaved as good, corporate citizens at this moment of crisis, as you've described?

MR. FLEISCHER: Terry, the President is very concerned about the high prices. And he believes that the federal government, through its investigative agencies -- principally, the FTC -- must be vigilant to make certain that nobody is doing anything beyond the law. And to the degree they are, their actions need to be investigated and corrected, if that is going on. That's the President's position.

Q Has the White House considered or discussed having Director Freeh step down before his retirement? And have the problems that the Bureau has had over the last few years, have they made the search for a new director more difficult?

MR. FLEISCHER: There is no change in that from what the President said when he took a similar question on Friday here during his news conference. The President said one of the factors he's going to look for in a new FBI director is not only integrity and a law enforcement background, but someone who is a good manager as well. The President knows how important the FBI is to the lives of the American people and to the smooth functioning of the government. He thinks that Director Freeh has done a very good job at the FBI, and the search is underway for a replacement.

Q He hasn't thought about having Director Freeh step down early as a sign of renewed control --

Q Ari, about the missile defense plan, now that the consultation teams are back, is the President disappointed by the lack of clear support expressed by the allies? And what's the next step?

MR. FLEISCHER: No, just the contrary. The purpose of sending the teams abroad were to begin the process of consultation with our allies. It is the beginning of that process. There will be additional consultations. There was never an expectation that people would go abroad and come back and have the allies say sign us up. That's how this process works. And it is the beginning; there will be more consultations to come.

Q Ari, a federal grand jury has indicted Robert Hanssen. Does the White House have a reaction to that, and does the President feel that this man should face the death penalty if he's found guilty?

MR. FLEISCHER: That's not a determination that's made by the President, that's a determination that's made by the Justice Department.

Q -- about the indictment, the grand jury's indictment?

MR. FLEISCHER: I don't have anything right here. I would have to talk to the President.

Q The State Department authorization bill with the Hyde Amendment in it has been passed in the House. Is there any doubt the President will sign it when the entire bill is passed and comes to your desk?

MR. FLEISCHER: I haven't had a chance to look through the other provisions in the State Department authorization, but now that the matter has been returned to the policy that the President supports, unless there is something else in there, the President will be supportive.

Q Ari, the Finance Committee has now approved the tax cut that reduces the top marginal rate to 36 percent. Is that close enough to what the President wanted?

MR. FLEISCHER: The President believes that the top rate should be what the House passed -- 33 percent. He does not believe that anybody should pay more than one-third of their income to the federal government. And that is the position that he supports.

Q Ari, following on what Terry was saying, is the President sympathetic with the idea that the oil industry went through some pretty lean years in the mid-1990s and they need to have some substantial profits in order to engage in exactly the type of exploration, development and infrastructure rebuilding that the President believes they need to undertake?

MR. FLEISCHER: The President's view is that here has to be a return to equilibrium between supply and demand. That way, consumers can have reliable energy at an affordable price, and that our nation's infrastructure can be modernized and that supply can be brought on-line.

Q But is he sympathetic to the idea that after going through some lean years, it's okay for the oil industry to be making money hand over fist?

MR. FLEISCHER: I've just answered your question about equilibrium in supply and demand.

Q Ari, on California, the President's talked, as you have, about California in the context of this energy plan a number of times. I'm wondering, does he see California as a harbinger of things to come for the nation as a cautionary --

MR. FLEISCHER: He's worried about that. The President is worried about the impact that the California problem can have on the rest of the nation. Already, we have seen now, just this week, that there are blackouts in some of the Midwestern states. It is a clear problem that the President wants to deal with in a comprehensive fashion. And that's why, at long last, the federal government, under President Bush, will have a comprehensive energy solution to the problems that have befallen the nation.

Q Ari, what's the President's view of how the education package is shaping up in the Senate? Since they've got billions of dollars being added to that, is there a point at which it's too much?

MR. FLEISCHER: Keith, the focus the President has always maintained on education is that the reforms are what improves schools the most. If throwing money at education were the solution, our schools would have been improved a long time ago. So the President supports additional funding for the schools coupled with reforms that focus on accountability, testing so that parents can know if their children are indeed learning, that schools are succeeding. But the solution is not just to throw money at it, the solution is that reasonable increases in spending for schools, coupled with meaningful reform.

Q So is it reasonable what's going on in the Senate at this point?

MR. FLEISCHER: I think the President's going to keep his eye on it. There have been some productive conversations that continue to be held with the negotiators in the Senate. But the President's going to continue to keep his eye on it.

Q Ari, it appears that Congress might move as early as June on another major tax cut bill that would be attached to minimum wage. Does the President have any objection to having a second bill, not necessarily limited to small business relief either?

MR. FLEISCHER: Well, we'll just -- the President will just have to monitor what Congress is doing. His focus right now is of course the Senate Finance Committee only last night passed some of those very similar to the proposal that he made. That proposal will soon go to the Senate floor, and that's where the President is focused on now.

THE PRESS: Thank you.

MR. FLEISCHER: Thank you.

Q The President has said, though, that --

MR. FLEISCHER: His focus remains on the package that's before the Senate now.

2:15 P.M. EDT