Press Briefing by Press Secretary Robert Gibbs, February 18, 2009
Aboard Air Force One enroute to Andrews Air Force Base
[REPORTER]: One thing that I don't think was asked in some of the briefings this morning: If everything goes as you think it's going to go with the housing plan, how soon might the market turn around?
ROBERT GIBBS: The housing market or the stock market?
[REPORTER]: Let me start with the housing market, I'm going to come back on the stock market.
GIBBS: You know, well, let me address both. I mean, obviously as we've said it on a number of occasions, none of these individual legs of the stool that the President has talked about are designed in any way for a one-day market reaction. And I think the confluence of economic news that we get every day shows the depth of the challenges that we face. I mean, opening up the newspaper today or reading statistics about housing starts or banks in Europe or Eastern Europe -- you know, I think all of it simply underscores the breadth of the challenges that we face to not only our economy, but getting the global economy back on track.
I hesitate to predict when the statistics that come out might be positive versus what we're seeing now. But I think as the President has said, and certainly underscored yesterday, the economy is probably going to get worse before it gets better. But at the same time I think yesterday was a big step forward in passing -- in signing into the law the recovery and reinvestment plan; and then today an aggressive plan to deal with not just those that are in foreclosure, but to take and help the millions of people that through no fault of their own now find themselves owing more on a house than it's worth, and the enormous challenges that that presents to a family trying to refinance or lower their payments in order to get by each month.
[REPORTER]: But you're not able to say whether the steps you announced today will stabilize the market within the next few months or even within the current year?
GIBBS: Let me -- do I think today's steps will have a positive impact? Absolutely and wholeheartedly. I'm not going to predict when housing starts -- when those statistics might change. But do I think that the aggressive plan that the President and his team have laid out to prevent and forestall home foreclosures and the decline in housing prices -- I don't think there's any doubt of that.
Look, just the simple fact alone that, as was said in these briefings, if your house is near a home that's foreclosed the value of your house decreases, research shows, by about 9 percent. That's a big deal for people with a mortgage. So I think an aggressive plan that will finally stem the tide, the rising tide of home foreclosures, will have a big impact. I think it is, as the President has said, one aspect of the many problems that we're dealing with.
[REPORTER]: Let me come back to the stock market, then. There was a big sell-off yesterday after the signing of the stimulus plan. There was a big sell-off after Secretary Geithner -- so you're not talking one day, you're talking two days that were --
GIBBS: How many people think that -- how many of you have stock investments? Probably most of you, right? The day TARP passed, right, the market went up a thousand points. Now, I don't know about you, but how many people that's gone well so far? Right?
So I think judging one day's events are somewhat, if not rather, meaningless. Let me finish.
I also believe that -- I mean, I think most economists would also tell you that an accumulation of news both over the weekend and on Monday impact the market on Tuesday, regardless of what individual policy moves might draw attention that day.
So I think for any number of reasons it makes very little sense to judge any particular initiative's introduction or any particular initiative's news based on what the market may do on a particular eight or ten-hour period of any given day. And I think, again, there's any number of historical examples that you can go back and find that show positive reaction for the market for ultimate economic ideas that didn't do well, and you can find negative reaction on the day in which the market may or may not have been interpreting something that did do well.
And if I could predict the stock market I'd probably have one of these jets all to myself.
[REPORTER]: What's the next step? You've got a banking proposal, you've got the stimulus, you've got housing. What's the next leg of the multi-legged stool?
GIBBS: I think two things that will be upcoming, the first of which will be the budget over the course of the next week or so. And I think also you'll see a renewed effort, particularly as we lead into the G20 meetings in April and beyond, a real effort to redo the rules of the road in a financial reregulation and regulatory reform to ensure that many of the things that caused the problems that we're dealing with are dealt with. And I think those are the major things next.
I also -- there's implementing the recovery and reinvestment plan I think also will be very important. The President is interested in ensuring that that's done correctly and quickly. As I've said repeatedly, for better or for worse, there's not one thing alone that we have to focus on -- there are any number. So I think even as you sign a recovery plan you've still got to worry and think about a lot of things as it relates to that leg of the stool, even as you also focus on other legs.
[REPORTER]: Is the budget coming in connection with the speech to Congress? Is it going to be submitted that day to Congress?
GIBBS: I believe, if I'm not mistaken, the budget will come to Congress on the 26th -- that's a Thursday. So a day or so, a day and a half after the speech that he made.
But as I said yesterday, I think the speech will focus on any number of those legs. I think the President will continue to talk about recovery.
[REPORTER]: And the financial regulations, are you going to be rolling those out before June 20?
GIBBS: I believe that the White House, in conjunction with Congress, will be working on that before April -- there's no doubt about that. I think the President is eager to have leaders down to the White House to begin discussing what that would look like.
[REPORTER]: And, roughly, what is that supposed to involve the financial reregulation?
GIBBS: Well, without getting into a lot of the detail on it, I think obviously the President spoke a number of times during the campaign, even when -- I remember, I think it was early September of 2007, warning against some of the things that were happening in the financial markets that would cause problems. So without getting into specifics, I think I'd refer you to many of those speeches, particularly as I said the one on Wall Street and NASDA[REPORTER]: that enumerate some of the things that have to be done, and later speech in New York, I think in March of '08.
[REPORTER]: Robert, you can turn back toward the camera to answer this if you would like to. Is the cartoon inappropriate in the New York newspaper that seems to refer to the President when it shows a chimpanzee on the ground?
GIBBS: I'll do this for the benefit of the camera. I have not seen the cartoon, but I don't think it's altogether newsworthy that I don't spend a lot of time reading the New York Post.
[REPORTER]: Is that a yes or a no, sorry? Is that a yes or a no?
GIBBS: I haven't seen the cartoon.
[REPORTER]: Robert, the housing plan was much more detailed than we saw in the TARP rollout plan that Geithner revealed. Is there a reason for that? Is there a reason that the TARP plan was so much more -- I mean, the housing plan was so much more detailed?
GIBBS: Well, as we've talked about before, the -- well, as we've talked about before, the framework that Secretary Geithner laid out and the work that continues on that plan we believe laid out a strong path toward ensuring stability in our financial system. That work continues partly because there's any number of parts in that plan that require continued consultation. And I think we all understand that the enormity of the problem and the complexity is vast.
In terms of today's plan, I think -- I think largely based on the fact that it's a -- it's not quite to the scale that financial stability is enables you to have done some of those consultations beforehand.
[REPORTER]: So is there any sort of logic or rationale for the sequencing of the rollout, for example, starting with the stimulus plan, then doing the housing plan, then the financial rescue plan, which might be the hardest for Americans to swallow? Is the President giving Americans something that they most want first, holding the plan that's least palatable for last?
GIBBS: No, because I think if you go back to -- you know, we were working on releasing the additional $350 billion for financial stability before we were inaugurated. I think the President believed that, based on strong public policy reasons, that what was most important was a recovery plan that would get money into the system quickly. The longer we delayed getting that money into the system, the longer we put off the beginning of the recovery and the changing in the trajectory of the economic downturn and how it related particularly to jobs and unemployment.
But again, as I've said and I think the President has said, most of this work is ongoing on many parallel tracks, and all of it will -- all of it will require attention, a constant amount of attention in order to get right, based on the size and the complexity of the issue.
So there's not a political sequencing to this as much as there is a policy sequencing.
[REPORTER]: One last follow-up. On the auto bailout, some critics have said this is a bottomless pit; there may be no end to the amount of aid that Detroit asks for. What is the President's view of that?
GIBBS: Well, I mean, I think as the President and many of his advisors have talked about, including myself, that we need a vibrant auto industry as part of a -- part of our manufacturing base. We need to ensure that the cars of tomorrow are built by Americans for Americans; but at the same time, that this is going to cause some restructuring in Detroit.
And the President understands that we have to get a sustained path to that restructuring to ensure that there isn't a constant necessity for continued government intervention and government money from the taxpayers.
I think we've -- and the President, I think, has been -- has pointed this out to -- in order to ensure a path for Detroit that works not just for taxpayers but for auto workers, for the companies, and for consumers, for quite some time he's pointed out that we have to change some of the decisions that Detroit has made in the past, that have come to reckoning now.
But I think the President -- the President understands that whether it's financial stability, whether it's banks and the lending system, whether it's the auto companies, there can't -- there can't be a bottomless pit to this. There's just not the resources to deal with it.
[REPORTER]: Well, what you saw yesterday, the submissions and the requests for another, I guess, $14 billion, will the car companies get it?
GIBBS: Well, I know that many people at Treasury were up well into the night evaluating those plans. They continue to be evaluated. The President will convene a meeting of the Task Force on Autos late this week, the first meeting of that task force to begin to go through those in more depth.
Treasury is reaching out to -- after reviewing those reports, reaching out to the companies themselves for a greater understanding in what they're doing. But a lot of that analysis is ongoing.
[REPORTER]: Has the President been briefed on the auto stuff yet, on a preliminary basis?
GIBBS: He has.
[REPORTER]: When?
GIBBS: Both -- some yesterday and more today. Obviously Secretary Geithner is on the plane today.
[REPORTER]: What do you mean when you say Treasury has reached out to the auto companies?
GIBBS: Well, I mean, Treasury wants to -- and members of the Auto Task Force are going to talk to the companies about what's contained in their plans -- just a greater understanding. I didn't mean to imply anything greater than --
[REPORTER]: Are they looking for more details? Is there something missing?
GIBBS: No, no. I think it's just -- I think it's talking through what's in their plans. I mean, obviously, without prejudging their analysis, there's obviously a lot of work left to do.
[REPORTER]: Does the President want to make a decision on extra aid?
GIBBS: I think he would want a better evaluation of those plans and a meeting of the task force before we make any announcements on that.
[REPORTER]: (Inaudible.)
GIBBS: Well, I mean, obviously many of these problems are urgent. We have to make sure -- obviously there's a big restructuring that has to -- is likely going to take place.
[REPORTER]: Robert, you were asked a couple times yesterday about the President's reaction to revelations about Roland Burris. Have you had a chance to talk with him? Does he have a reaction?
GIBBS: I have to say, I've neglected to speak with him. But I will give you this. Obviously the people of Illinois have been through a lot in the past few weeks. And obviously Senator Burris was seated based in some way on the representations that he made to the U.S. Senate and to the committee in Illinois investigating Governor Blagojevich, and as well in interviews to the people of -- that the people of Illinois heard.
I think in many ways he was seated based on those representations, and I think that the people of Illinois deserve -- deserve to know, based on some of the things that have happened over the past few days, deserve to know the full extent of any involvement. And I think that's likely to come out as part of some of the investigations that are now ongoing.
[REPORTER]: He's already acknowledged that the extent of his contacts with Governor Blagojevich were substantially more than what he originally owned up to. Should he resign? There have been calls for that from both sides of the aisle in Illinois.
GIBBS: I'm not going to get ahead of investigations and say anything like that yet.
[REPORTER]: Is it fair to say, though, that you're suggesting that Mr. Burris misrepresented his involvement before?
GIBBS: Well, let me -- I wouldn't suggest -- I think you should quote what I said.
[REPORTER]: Okay.
[REPORTER]: See you in the morning?
GIBBS: Yes --
[REPORTER]: Sorry, one more question. Is the President going to continue travel at this pace, the pace he set last week and this week? That's a personal question. (Laughter.)
GIBBS: For me, too. You know, I think the President has spoken about what he believes is -- he believes there's a lot of benefit to getting out of Washington at least once a week and meeting with and seeing the problems that Americans are dealing with.
He was fortunate enough to be able to do that for two years on a campaign, and I think he would tell you that the experiences and the stories that he heard help every day in him crafting and thinking about the solutions to the problems that many of those people face.
I don't anticipate that we'll do this three days a week, but I do think he will definitely want to do this once a week.
[REPORTER]: Can you give us any more detail about the fiscal summit on Monday? Who will be attending --
GIBBS: Yes, let me -- I think I got an email on that, and I'll -- so I don't mess up some of the people that might be there, let me go check on that. All right?
And then in terms of tomorrow, I don't -- I assume -- I don't know what time we're leaving. I think it's a fairly decent hour in the morning. So I will talk to you guys -- my assumption is -- on the way back from Canada.
All right. Thanks, guys. Thank you.
[REPORTER]: So talking not on the way up, but probably on the way back?
GIBBS: Probably on the way back, but we'll play it by ear and see if --
[REPORTER]: How early is it in the morning, do you know?
GIBBS: I thought we were leaving at 9:00 a.m.-something, but maybe -- all my schedules sort of blur together. Let me go see if I can get a better read.