Friday, June 30, 2006

Federal Open Market Committee Statement 06/29/06

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Federal Open Market Committee Logo
The Federal Open Market Committee decided today to raise its target for the federal funds rate by 25 basis points to 5-1/4 percent.

Recent indicators suggest that economic growth is moderating from its quite strong pace earlier this year, partly reflecting a gradual cooling of the housing market and the lagged effects of increases in interest rates and energy prices.

Readings on core inflation have been elevated in recent months. Ongoing productivity gains have held down the rise in unit labor costs, and inflation expectations remain contained. However, the high levels of resource utilization and of the prices of energy and other commodities have the potential to sustain inflation pressures.

Although the moderation in the growth of aggregate demand should help to limit inflation pressures over time, the Committee judges that some inflation risks remain. The extent and timing of any additional firming that may be needed to address these risks will depend on the evolution of the outlook for both inflation and economic growth, as implied by incoming information. In any event, the Committee will respond to changes in economic prospects as needed to support the attainment of its objectives.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; Timothy F. Geithner, Vice Chairman; Susan S. Bies; Jack Guynn; Donald L. Kohn; Randall S. Kroszner; Jeffrey M. Lacker; Sandra Pianalto; Kevin M. Warsh; and Janet L. Yellen.

In a related action, the Board of Governors unanimously approved a 25-basis-point increase in the discount rate to 6-1/4 percent. In taking this action, the Board approved the requests submitted by the Boards of Directors of the Federal Reserve Banks of Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Minneapolis, and Dallas.

Release Date: June 29, 2006, For immediate release

2006 Monetary policy

RELATED: Wednesday, May 10, 2006 Federal Open Market Committee Statement 05/10/06, Tuesday, March 28, 2006 Federal Open Market Committee Statement 03/28/06, Wednesday, February 15, 2006 Chairman Ben S. Bernanke, Semiannual Monetary Policy Report, Monday, February 06, 2006 President Attends Swearing-In Ceremony for Federal Reserve Chairman Ben Bernanke VIDEO, Monday, October 24, 2005 Appointment Ben Bernanke Federal Reserve (VIDEO), Monday, October 24, 2005 Biography of Dr. Ben S. Bernanke, Tuesday, June 21, 2005 President Congratulates CEA Chairman Ben Bernanke (VIDEO)

President to Visit Chancellor Angela Merkel Prior to G-8

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President Bush to Visit Chancellor Angela Merkel in East Germany Prior to G-8 Summit

Chancellor Angela Merkel of Germany, adjusts her earpiece as President George W. Bush begins his remarks during a joint press availability Friday, Jan. 13, 2006, in the East Room of the White House. White House photo by Eric Draper.Chancellor Angela Merkel of Germany, adjusts her earpiece as President George W. Bush begins his remarks during a joint press availability Friday, Jan. 13, 2006,
in the East Room of the White House. White House photo by Eric Draper.

At the invitation of Chancellor Angela Merkel, President Bush will travel to northeastern Germany in advance of his participation in the G-8 Summit in St. Petersburg, Russia. Chancellor Merkel will host President Bush on July 13, 2006 in the towns of Stralsund and Trinwillershagen, which are in the Chancellor's electoral constituency. The visit, which will take place in what had been communist East Germany, will underscore our two nations' commitment to advancing freedom and prosperity, and to strengthening the transatlantic partnership. The two leaders look forward to discussing a wide range of global challenges, in particular continuing their consultations on Iran and preparing for the G-8 Summit.

# # # For Immediate Release, Office of the Press Secretary, June 28, 2006

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Poznan Uprising in Poland

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Statement on the 50th Anniversary of the Poznan Uprising in Poland

Soviet Premier Khrushchev's famous 1956 denunciation of Josef Stalin triggered open protests by the captive peoples of Central and Eastern Europe, quickly followed by their brutal suppression. Though the Hungarian Revolution of October 1956 has come to symbolize for many the revolts and protests of 1956, we also remember the brave acts of dissent and revolt elsewhere behind the Iron Curtain, particularly in Poznan, Poland.

Fifty years ago today, on June 28, 1956, a simmering dispute between Polish workers and their government exploded onto the streets of Poznan as more than 100,000 Poles joined striking factory workers. The protesters believed and hoped that Khrushchev's opening might foreshadow a renewed chance for freedom. They occupied government and party buildings, and later stormed a prison, to make known their desire for freedom to a government that did not listen to its people. That evening, Polish army tanks moved on the city, and by the next morning, an estimated 60 people had been killed and hundreds injured.

As peoples around the world today continue to struggle for their liberty and for democracy, we pause to remember those battles lost along the way, and to reaffirm that while liberty can be delayed, it cannot be denied. Today, we resolve that when people stand up for their freedom, America will stand with them. We are proud to celebrate with our Polish friends the war that we won together.

# # # For Immediate Release Office of the Press Secretary, June 28, 2006

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Thursday, June 29, 2006

Press Briefing Tony Snow 06/29/06 (VIDEO)

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White House Press Secretary Tony Snow, Tuesday, May 16, 2006, fields questions during his first briefing after replacing Scott McClellan. White House photo by Paul Morse.Press Briefing by Tony Snow, FULL STREAMING VIDEO. James S. Brady Briefing Room 1:08 P.M. MR. SNOW: All right, welcome. We've got a busy news day.
MR. SNOW: All right, welcome. We've got a busy news day. Let me go through a whole lot of preliminaries here, and then we will get to the Hamdan case and others.

First, we're pleased that the Senate moved quickly and confirmed Henry Paulson to be the next Secretary of the Treasury, and commends Senators Grassley, Baucus, and Schumer for their leadership during a fast confirmation process.

Also, the President yesterday announced 10 additional judicial nominees: John Preston Bailey of West Virginia, United States District Judge for the Northern District of West Virginia; Mary O. Donohue, of New York, U.S. District Judge for the Northern District of New York; John Alfred Jarvey, of Iowa, to be U.S. District Judge for the Southern District of Iowa; Robert James Jonker of Michigan, U.S. District Judge for the Western District of Michigan; Kent A. Jordan, of Delaware, for the U.S. Circuit Judge for the Third Circuit; Raymond M. Kethledge, of Michigan, U.S. Circuit Judge for the Sixth Circuit; Debra Ann Livingston, of New York, United States Circuit Judge for the Second Circuit; Paul Lewis Maloney, of Michigan, U.S. District Judge for the Western District of Michigan; Stephen Joseph Murphy, III, of Michigan, U.S. Circuit Judge for the Sixth District; and Janet T. Neff, of Michigan, United States District Judge for the Western District of Michigan.

In addition, as you probably have heard, the VA has announced that they have recovered the stolen laptop that had data on as many as 26.6 million veterans and military personnel. The FBI, in a statement from the Baltimore field office, said a preliminary review determines that the database remains intact and has not been accessed. We'll continue to bring you data as that becomes available.

The President is concerned about the major flooding that has occurred throughout the Northeast and mid-Atlantic. As of 5:45 p.m. last evening Secretary of Homeland Security Michael Chertoff had called Governor Rendell of Pennsylvania; FEMA Director David Paulson has had conversations with Senators Schumer and Clinton, and Representative Sherwood of Pennsylvania. So far, no formal disaster assistance request, and we ought to be congratulating state and local authorities not only for rapid, but effective response.

FEMA has activated a regional response coordination center in Philadelphia to integrate federal support for state and local response efforts, and they have provided approximately 30 FEMA personnel. Maryland: FEMA has deployed four teams of three members each, and FEMA also remains in contact with emergency officials in a number of states.

On the economic front, real GDP growth in the first quarter revised up to 5.6 percent. Profits up, as well. Unemployment claims up -- let's see, they're up 4,000, to 313,000. That's still in line with market expectations.

One or two more things here. Scheduling -- the President is going to spend this weekend at Camp David. He's going to arrive Friday night, return to the White House on Sunday. On July 4th, he will travel to Fort Bragg, North Carolina, and make remarks at an Independence Day celebration before returning to the White House.

Obviously, the Hamdan case has come down from the U.S. Supreme Court. Maybe you are interested in that. We'll go to questions. Kelly.

Q Can you describe for us -- the President mentioned the drive-by briefing --

MR. SNOW: Yes. I conducted that. I helped conduct it. What we did is -- and he only had about three minutes -- we got a quick brief. The case, I guess, came down, what, about five or ten minutes after 10:00 a.m. The President had been in continuous meetings with Prime Minister Koizumi and their national security teams, so we were able to give him a very quick gloss on what we at that point had known.

Even now, people are studying as carefully as they can what is a highly complex decision, trying to figure out what the ramifications are. But the President did point out, and it seems to be the point that Justice Stevens stressed from the bench today, that one of the most important things for the court, in the majority opinion today, was to get some congressional authorization. Members of Congress, including Senator Graham, on TV, have stepped forward and said that they'd be happy to work on that process. The President said he's willing to work with Congress on authorization to figure out how to move forward in a way consistent with the ruling handed down by the court.

Q This administration has said that under the Constitution, at a time of war, the President has had very far-reaching power to protect the American people, and the Court seems to disagree and says the President overreached in that power.

MR. SNOW: You know, it's -- overreached is the headline, it's not the way it's been written by the Court. I mean, I've got the opinion here, and I'd defy anybody to come up with a very quick and simple analysis of the varied holdings in here. You've got people agreeing and disagreeing in part. So I think what the Court is saying is that it wants to make sure that there's congressional authorization, and it also is concerned about comporting with the Geneva Conventions and also the Uniform Code of Military Justice. And those are matters that will be taken under advisement.

Q And those are things that this White House has basically said it did not have to do, that executive has the authority to pursue this war without dealing with those other institutions.

MR. SNOW: The Court disagreed with that.

Q The President said before that he was waiting for the Supreme Court ruling before he would make any comments about it, but he also said that he really wanted to close it soon. So where do we stand with that?

MR. SNOW: Well, you're talking about Guantanamo?

Q Yes. The ruling didn't address the --

MR. SNOW: Correct, and the ruling -- the President never said he wanted to -- he said he wants to close Guantanamo. He didn't say he wanted to close it quickly, because there are some practical considerations. There are approximately -- well, as quickly as possible, I believe. There's a difference, because you have a whole series of considerations. There are approximately a hundred prisoners we are still in the process of trying to repatriate. There is also a core of prisoners who are deemed so dangerous that their home countries won't even take them back. There are a number of prisoners, also, that we think need to be held to justice within the United States system. And now you have to figure out how to go forward with that. This will not mean closing down Guantanamo. There's nothing in this opinion that dictates closing down Guantanamo. We're studying very carefully what other implications there may be.

I think the most important thing, at this point, seems to be -- I don't want to fake being a lawyer, but I've had some pretty extensive consultations with our lawyers, who are still pouring over this -- I think the congressional consultation piece is going to be pretty important.

Q Forgive me, Jim. The President has said, I want to close Guantanamo --

MR. SNOW: Yes.

Q -- I'm waiting for this decision. You're just now saying, this doesn't mean we close Guantanamo. Isn't that --

MR. SNOW: No, because he wanted to see the decision, and I think what the decision has done -- for instance, in the case of Mr. Hamdan, is it's now reverting it back to the 1st U.S. Circuit Court of Appeals. There is no strict constitutional interpretation. As a matter of fact, this opinion does not talk about the Constitution. And so what the President is trying to do, and what the attorneys are trying to do, both here in the White House and also at Departments of Justice and Defense, is to figure out precisely what the Court is saying here, and how to proceed in a way that comports with it.

We will proceed as rapidly as we can to bring to justice those who have been held in Guantanamo, to repatriate as quickly as possible those who may be repatriated. And that's always been the goal. But this is not a decision that lends itself to a very quick disposition, because what it has now done is added the extra element of bringing Congress in, and saying to members of Congress, okay, congressional authorization. Section III of Justice Stevens' opinion deals with the issue of congressional authorization. And as I've mentioned, I think a number of members of Congress are going to want to weigh in on this.

Jim.

Q For the record, the President still stands by the idea that he wants to close Guantanamo Bay.

MR. SNOW: Absolutely. Yes, that hasn't changed.

Q Then as far as the congressional oversight, could you just flesh out for me --

MR. SNOW: It's not oversight, it's authorization.

Q Authorization. Could you flesh out for me what that does --

MR. SNOW: I wish I could. I think what it means is that they want to make sure that Congress authorizes, pursuant to Congress' obligations when it comes to declaring war and laying conditions for a war, it wants Congress to authorize the way to proceed forward in terms of bringing to justice those who have been brought in from the battlefield.

Q So doesn't that, by definition, mean the administration overreached in setting up its initial approach?

MR. SNOW: I think it would say that the administration -- the Supreme Court has disagreed with the approach we've taken. You may -- I don't know how you'd say "overreached." Apply whatever adjective or whatever verb you want, the Supreme Court has said that it disagrees with the way in which the commissions were convened, and has laid down some guidelines for proceeding.

Q But the idea is to maintain sort of the concept, it's just to make sure that it's rewritten with Congress' authorization, as you say.

MR. SNOW: You've got to keep -- the principle is, you bring to justice people who were on the battlefield or have been apprehended in the process of committing acts of terror or on the war fields of Afghanistan and elsewhere. And that principle remains the same; nobody gets a "get out of jail free" card. Instead now, what we're doing is addressing the issue which the Court sort of threw in the lap of both Congress and the administration, of figuring out what the Court has decided is the proper way to proceed in trying to convene hearings for those who are being held.

Q Can you characterize the feeling upon hearing the ruling today? Was it disappointment?

MR. SNOW: No, it really is -- again, this is -- I'll just describe to you -- have you guys had a chance to look at this? Here is -- first we have -- we have Justice Stevens. Here's his majority opinion, it's 73 pages long. Parts I through IV have the concurrence of four other members of the Court, but parts V and VI-D-iv do not.

Then you have Justice Breyer, writing for Justices Kennedy, Souter and Ginsburg. Then you have Justice Kennedy -- Justices Souter and Ginsburg have adopted everything what he has, but Justice Breyer says, no, I like parts I and II, but not part III.

Then we get to the dissents -- Justice Scalia writing with Justices Thomas and Alito in full approval. Justice Thomas writes, Justice Scalia likes it; Justice Alito agrees with parts I, part II-C-i and part III-B-ii. Then you have Justice Alito writing and Justices Scalia and Thomas concur with parts I through III.

It's very difficult to come up with a snap parsing of that. So I think it's worth saying that the first reaction is, what does this mean? And there are a lot of very smart lawyers trying to pore through each and every part of that to figure out precisely what it does mean.

Q Tony, in addition to seeking congressional authorization for military tribunals or for whatever is next, what other possible next steps are there for the administration to take?

MR. SNOW: Don't know and don't want to get into it, Jake. I would refer you -- I think the Justice Department is going to be trying to do a briefing later in the day. I would leave that to legal minds who have got far greater standing to speak on it than I do.

Q Okay. In addition to that, there was some strong rhetoric in some of these decisions, the majority decisions, Kennedy writing in a separate opinion, "It's a concentration of power" -- referring specifically to the executive branch -- "puts personal liberty in peril of arbitrary action by officials," "an incursion to the Constitution's three-part system is designed to avoid." Is there any feeling in terms of the administration's reaction to that?

MR. SNOW: No. I mean, again, you're trying to frame this as a political fight, and it's not. The Supreme Court has now rendered its judgment in the Hamdan case and it is now the obligation of the administration, which -- the President, who controls the executive branch, to figure out how to proceed, to create laws, to execute laws that are consistent with the Supreme Court's holding. As you also know, Justice Thomas, for the first time in his career, read an opinion from the bench. I mean, this is one where I think, just looking from the recitation I just gave you, I think that there were pretty vigorous disagreements -- vigorous differences, not merely among those who disagreed on the Court, but among those who agreed.

So that's why -- there has to be some forbearance here. I think the most important thing to realize is that section III holding by Justice Stevens, which talks about congressional authorization, I think that probably is the nub here, and Justice Stevens felt strongly enough about it that he did talk about that from the bench today.

Q Well, I'm not trying to make this a political argument, but you guys -- the White House has put forward the argument that in extraordinary times, the White House needs to take extraordinary measures and act as executive power on its own. And the Supreme Court -- a majority ruling of the Supreme Court has said, no, you can't, not in this instance.

MR. SNOW: Well, the majority of the Supreme Court -- a lot of this is procedural, Jake, and that's why it gets complicated and it gets pretty quickly beyond my brief. But if you take a look at it, a lot of it really is procedural. It has to do with congressional authorizations, the Uniform Code of Military Justice, and so on.

Q But those are the steps that you guys bypassed.

MR. SNOW: Well, and so those are not going to be bypassed in the future, and there's a disagreement. The Supreme Court has rendered its decision.

Q This way forward, working with Congress for authorization, isn't that basically a way to circumvent what the Supreme Court came down with today?

MR. SNOW: Not when a justice says, Congress can do this. That sounds to me to be -- and by the way, there may be other means of dealing with this. I do not want to give you the impression that is the one and only thing. But that seems to be something Justice Stevens considered important enough to say, from the bench, that Congress could write authorizing legislation to deal with this. That's not circumventing the Court, that's responding to what the author of the majority opinion had to say.

Sheryl. Oh I'm sorry --

Q I just have one more. The ruling today also seemed to say that the prisoners at Guantanamo should be treated in adherence to the Geneva Conventions. So what will that mean for the treatment of prisoners going forward?

MR. SNOW: That is something we're going to have to study. I'm not aware that it would involve any changes in the procedures by which prisoners are detained. But I think -- I better be careful about that, because I don't know for sure. But I know people are looking at that right now.

Sheryl.

Q Tony, this is an election year, and these issues are extremely contentious on Capitol Hill. Is the President confident that Congress would even act to give him this authorizing legislation, number one? And number two, what happens in the interim?

MR. SNOW: Well, in the interim you have the detention of prisoners, continue using Guantanamo. You will still have the process by which you continue to repatriate a number of prisoners. And then you've got to review the options for bringing the prisoners who are still in custody to justice. I'm being -- I don't want to be too specific because there are options, and again, the lawyers have to weigh those.

As far as Congress, we're in a war. And we get reminded of that -- every time we seem to forget, we get harsh reminders. And I think members of Congress, certainly understanding -- and many people on both sides of the aisle have been down to Guantanamo and they've received briefings and they have a sense of what's going on and what kind of prisoners are under detention. They realize that it is important to bring them to justice, and I think they will feel some obligation to go ahead and act. I don't want to speak on behalf of the House and Senate, but it is a political year.

But on the other hand, the one thing that you do find is general consensus, A, that we need to win the war on terror, B, we need to wage it seriously, and C, we need to go ahead and bring to justice those who are at Guantanamo in a manner consistent with law and with our obligations to human rights.

Q But while you wait, is the net effect of this that these detainees will be held even longer awaiting --

MR. SNOW: Well, they will be held --

Q -- congressional authorization for the type of --

MR. SNOW: That possibly could be the case, yes. That possibly could be the case.

Q Tony, back on the issue of alleged overreaching, you're saying there were no strict Constitution interpretations. If that were the case, why not have -- why did this administration handle the tribunals in a very conservative or restrained way --

MR. SNOW: April, I don't want to go second-guessing what happened. The administration proceeded in the manner it saw fit. The Supreme Court has reviewed it in the case of Mr. Hamdan, and we move forward. I don't think second-guessing -- I don't know what to do with it.

Q But the manner that they saw fit, some are saying, overreached and was an abuse of power. If there were no guidelines --

MR. SNOW: There were guidelines, and again, rather than getting into second-guessing, I'm just not going to do it, April. It's complex enough to figure out precisely what this whole thing means. And a lot of people are going to work very hard to do their best to figure out what it means.

Q But don't you think that the complexities should have been addressed early on as this war began? I mean, they tell us --

MR. SNOW: You're --

Q -- who is a prisoner of war versus a person who is not a soldier versus someone from al Qaeda --

MR. SNOW: Well, one of the interesting things here is that there is no dispute that these are enemy combatants and not traditional prisoners of war. That's never been a matter of dispute. This is a different kind of war, and I think it creates a different kind of legal atmosphere. And I think trying to second guess in a situation like this might be an interesting academic exercise, but it's not something I'm going to entertain here.

Q Can I ask you about the larger debate in the international community? Does the decision today weaken the President's hand at all in trying to argue that he does have wide latitude, as he says he does, in conducting the war on terror?

MR. SNOW: I think what you're finding, actually, is increasing cooperation in the war on terror. You not only heard it today with Prime Minister Koizumi, you also have ongoing efforts -- Secretary Rice today is in St. Petersburg -- or Moscow, she's in Moscow, in a ministerial as a preparation for the G8 summit next month in St. Petersburg. You've got a lot of nations that realize that there's a war on terror and they're figuring out the best way to proceed and to proceed together. I don't think it weakens the President's hand, and it certainly doesn't change the way in which we move as aggressively as possible to try to cut off terrorists before they can strike again.

Q But when world leaders see that a branch of the United States government disagrees with the administration's tactics in this one case --

MR. SNOW: The branch -- there are always disagreements between branches of government. I mean, that's kind of the way the system works.

Q The Supreme Court disagrees --

MR. SNOW: Yes, but what the Supreme Court has not said, it has not said, you can't hold them; it hasn't said, you can't try them; it hasn't said, you have to send them back. So what you do have are matters of procedure. And, no, I don't think it weakens the President's hand.

Q Is this a setback in terms of the broader goal of this administration to expand executive authority?

MR. SNOW: I don't think it's ever been the goal of the administration to expand executive authority. In a time of war, the President has tried to act in a way that meets the needs and obligations of a Commander-in-Chief against a dispersed and highly-unique kind of enemy. But we don't have "expand executive power" sessions. So nobody thinks in terms of, how do we expand executive power. This has been a time where the President has had to figure out how to maneuver in ways consistent with his obligations of Commander-in-Chief, and consistent with the Constitution. And I dare say it's raising questions that are fairly new and people are wrestling with.

Q I do think the Vice President has said that it was a broader goal to expand executive authority.

MR. SNOW: Well, I missed the "expand executive authority" meetings.

Q What's the President doing to try to get the Voting Rights Act renewal moving in the House? There are a lot of conservative Republicans in the House who are opposing its renewal for a variety of reasons. He said it's a top priority, but what is he doing?

MR. SNOW: It is a top priority. Well, there have been ongoing discussions through Candi Wolff, our head of Legislative Affairs, with members. And the President's position has been very clear; he wants it renewed in its present form and he hopes Congress is going to move quickly.

Q What is he doing?

MR. SNOW: I just told you. Typically, you dispatch people to go work on this, and there's been behind-the-scenes conversations. I'm not going to go --

Q But he has jumped on the phone and called people --

MR. SNOW: April, I'm not going to get into all the to-and-fro on the Voting Rights Act.

Q But he believes that it's still important for the federal government to oversee voting rights decisions --

MR. SNOW: He believes that it's important, as a matter of fact -- and I've said it before -- he considers it a top priority to renew in its present form the Voting Rights Act.

Q Tony, you said it's still early, lawyers are scrubbing this thing --

MR. SNOW: Yes.

Q -- but Congress can authorize these military commissions by statute. Senator Graham and others have said they wanted to do that.

MR. SNOW: Right.

Q But a number of experts have looked at this and said the Supreme Court was also very concerned about inadequate procedures given to these detainees. Hasn't the Supreme Court now set a bare minimum for the rights afforded to each detainee? And isn't that really a bigger problem than authorization from Congress?

MR. SNOW: No, because, again, I think what the Court has said is the Congress can by statute address all those concerns. And as I've said, Brad, from the start, anything that is going to be done is going to be consistent with today's holding in the Hamdan case.

Q Back to Jim's question about reaction. A lot of this is being portrayed as a major rebuke of the President's power, a severe loss in the war on terror. What is the sense from the White House?

MR. SNOW: The sense from the White House is, it is what it is. It's a decision of the United States Supreme Court. It creates conditions under which you need to modify and adjust your policy when it comes to Guantanamo and to detentions. And we will proceed accordingly. You can't -- you don't sit around and go, oh, my gosh, the Supreme Court hearing. It is something you deal with. And the way -- the reaction here in the White House is to try to figure out what it means so that we can go ahead with the number one job, which is to go ahead and bring these people to justice.

Q Thank you. My question is not a Supreme Court, so do you want to --

MR. SNOW: Okay, what I'll do is, let's finish up Supreme Court, finish up Supreme Court questions. Then we'll come back.

Victoria.

Q I've got a couple of sentences from the majority opinion that I'd like to read you and then get a comment from you.

MR. SNOW: Okay.

Q "Nothing in the record demonstrates that it will be impracticable to apply court martial rules here. There is no suggestion, e.g. of any of the difficulty in securing properly sworn and authenticated evidence, or in applying the usual courts of relevance in the possibility. It is not evident why the danger posed by international terrorism, considerable though it is, should require, in the case of Hamdan's trial, any variance from the court martial rules." Why not go with court martial?

MR. SNOW: That is an option. It would not be strict courts martial because it wouldn't be dealing with U.S. soldiers, but you would have something that would be parallel, in terms of procedures, to a court martial proceeding, and that's one of the options.

Q We haven't heard much about that, though, today. We've heard about military tribunals; we've not heard about courts martial.

MR. SNOW: Well, it's now an option that's in play.

Q Tony, could you go over what your understanding is of Lindsey Graham's thought --

MR. SNOW: I had a brief conversation with Senator Graham earlier. He has been arguing for some time that he thinks congressional authorization is required for military commissions, and therefore, he is willing to go ahead and proceed legislatively. Beyond that, I've got nothing. I think, again, there are so many different pieces to this that you have a general proposition that members of Congress are willing to get involved and to work with the White House, and the White House with them, on congressional authorization, if that is the proper way to proceed.

But beyond that -- and Senator Graham, I'm afraid, was sitting in the chair at the Senate until right before this briefing began, so I didn't have time to follow up. But I know that he and others at least have expressed some interest to try to figure out some way. And as you also know, he has been critical of the policy to date.

Go ahead.

Q A little -- just a housekeeping question. Hank Paulson, do you have a date for the swearing-in?

MR. SNOW: No, not yet.

Q Can you put a finer point on the detainees that are held, the status? You said that you're trying to repatriate 100 of them. Then you said, there's more of them that the countries won't take back. How many would be in that category?

MR. SNOW: I think the number is between 50 and 100. But rather -- I'll tell you what, Peter, I'll try to get clearer guidance out of DOD. These are -- what you end up getting are ballpark figures, and so I don't want to nail that down as an absolutely precise figure because -- especially with repatriations. Obviously, that number continues to go down. I will try to get a good answer out of DOD, and if so we'll attach it as an asterisk to the transcript of this briefing.

Q There have been hunger strikes and other actions there, as you know. Is there any concern that this ruling is going to embolden people being held, and perhaps their allies in the greater world?

MR. SNOW: As you know, the people who are guards at Guantanamo and officials at Guantanamo have tried to take extraordinary precautions to make sure that the prisoners are safe, and they have gone back and revisited and tried to strengthen those procedures in the wake of the recent suicides. I don't think at this point -- the primary concern here at the White House and within the administration is to figure out where this ruling takes us. And as far as the ongoing operations at Guantanamo, again, you talk to the authorities there -- they are very concerned about making sure that the prisoners are cared for properly. And so that's something they care about every day. They constantly worry about that.

Q Thank you, Tony. It is reported that North Korea --

MR. SNOW: Before we get into North Korea, let me dispatch -- dispense with all the Hamdan case questions, and then we'll get to that.

Yes.

Q I just want to clarify something from the press conference the President said. He said, "some of them," meaning with detainees, "some of them need to be tried in our courts."

MR. SNOW: He was referring to judicial proceedings, or equivalent judicial proceedings, such as military commissions, perhaps courts martial, and then we'll see how we proceed.

Q He didn't mean civilian courts, when he said --

MR. SNOW: No, not necessarily.

Q The President and the Vice President and others in this administration have talked pretty forcefully --

MR. SNOW: I'm sorry?

Q The President and the Vice President and others in this administration have talked pretty forcefully about the need for this President to have broad powers to prosecute the war on terror and how vital that is to winning.

MR. SNOW: Right.*

Q As you point out, the Supreme Court has now disagreed. So is the President concerned that this ruling is curbing his power or --

MR. SNOW: No. I mean, I think this is --

Q -- does he not have any concern that the prerogatives that he's argued, stressed strenuously for are being basically rejected by --

MR. SNOW: The President thinks of the war on terror -- and I will, without having spoken for him -- without having had a direct conversation about this, but by observation, the President thinks in terms of his obligations as Commander-in-Chief, not his prerogatives, but his responsibilities and the best way to carry those out. And when somebody says, okay, this is the box within -- within which you must operate, then you operate within the confines. But the President -- so, the President's determination to prosecute and win the war on terror has not changed one bit by the Supreme Court opinion. He is still determined to do it, he's still determined to win. And he wouldn't be in it if he didn't think we could and would win. So, no, the answer is that there is -- there's not seen any sort of implicit curtailment of his ability to fight the war on terror.

Q Do you see a potential impact on things like the National Security Agency eavesdropping program and some of the other surveillance programs when the President used sort of the same rationale that he used with respect to Guantanamo when he talked about his constitutional authority perhaps being curtailed --

MR. SNOW: I just -- I don't -- you're talking apples and oranges here, Kelly.

Q Not entirely, no.

MR. SNOW: Well, yes, you are. You're talking about entirely different sets of legal authorizations, and without getting into the weeds on it --

Q He also, in both instances, argued that the congressional use of force authorized it, and his constitutional authority authorized it. And the Court is saying that he still needs congressional --

MR. SNOW: The Court -- well, the Court is addressing this in the specific instance of military commissions, going back and trying to take a look at the history of military commissions. So it really is a far more specific ruling than that. It has to deal with the institution of military commissions, which goes back to the age of the Civil War.

Jim.

Q I just want to make sure, before we leave this, in terms of the options and the roads that the White House is considering traveling on from this point, we've talked about courts martial or some parallel procedure, we've talked about the congressional authorization, is there anything else as a possible road, for instance, the civil courts --

MR. SNOW: I really don't know, and I'm not at liberty to go any further than I've gone. I think people are looking at everything that may be implied by this. Those are the only two roads I can take you down right now, Jim.

Q You don't think that this decision weakens the President's ability to wage the war on terror? I thought that was the whole point you guys went to the Supreme Court, because you needed this in order to wage. I'm not talking about --

MR. SNOW: We thought it was an appropriate way to bring to justice people who are not enemy combatants in the traditional sense. The conventions of war, typically, have defined enemy combatants as people wearing uniforms of a sovereign country, clearly marked, not committing acts of violence against innocents, and so on. You know the Geneva Convention language. And it was the interpretation of the administration that military commissions were historically and legally an appropriate way to proceed.

What the Supreme Court has not said is you can't try them; it hasn't said you can't bring them to justice. I think now it's a question of how properly to do that. So it doesn't tie his hands. What it does is it -- it doesn't serve as a rebuke. What it says is that the Supreme Court disagrees with the method that has been designed right now by the administration, and it says, we want you to go back and consult with Congress.

As I mentioned before, Jake, a lot of this seems to have to do with procedure. And so everybody is going to go back, and the lawyers -- and I really would direct you back for further detail on this to the Justice briefing -- to figure out exactly what you need to do so that you can bring these folks to justice.

Q I assume that the reason you were doing it the way you were doing it is because you thought that was the best way to win the war on terror. So doesn't, by definition, this decision weaken, in your opinion, your ability to wage the war --

MR. SNOW: It's not -- it's really not important for me to give a personal opinion here. I gave that up when I came to this job.

Q The White House's opinion.

MR. SNOW: So at this particular -- you don't think about it that way. You think, what is the proper way to prosecute the war on terror. To move from one way doesn't mean that it's the only way, and so there will be different ways of bringing these people to justice.

Lester, it's got to be on topic.

Q No, no, I'll yield.

MR. SNOW: First let's make sure: anybody else on the Hamdan case? All right. Now we may get the first -- I'm sorry, we start here. Sarah.

Q Thank you. Tony, you and other key officials in the administration say diplomacy is being used to solve the North Korean missile crisis issue. Would you be more specific?

MR. SNOW: No. (Laughter.) No, I mean -- well, if you want me to be specific, you have the Premier of China calling yesterday for the North Koreans not to launch a missile. We have had Japanese officials say the same thing, we've had contacts from South Korea -- the other parties from the six-party talks have made it clear that the North Koreans ought not to do this.

We have been using diplomacy through our partners and friends to try to persuade North Korea to come back to the six-party talks. I mean, it's really no different than what I've been saying every day here. We have been pursuing diplomacy continuously. It was one of the topics that arose today in the conversations between Prime Minister Koizumi and the President. So there is an ongoing effort on the part of the President, and also his designees, including Ambassador Schieffer, including Secretary Rice and others.

So a lot of people have been active in trying to get the North Koreans to come back so that once again they can -- so that they can join the community of nations and move forward on other parallel tracks as laid out in last year's September 19th agreement.

Q Tony, a two-part question. First, in Israel, WorldNet Daily reports that leaders of the 1,200-member Rabbinical Congress for Peace have called on President Bush to refuse to support Prime Minister Olmert's plans to evacuate most of Judea and Samaria. And my question: How is the President responding to this?

MR. SNOW: Believe it or not, I don't think he's seen fit to respond directly to that particular political statement.

Q Okay. Reuters reports that while the Pentagon no longer deems homosexuality a mental disorder, this reversal has no impact on U.S. policy prohibiting openly gay people from serving in the military. And my question: Does this also accurately report the position of the Commander-in-Chief, or not?

MR. SNOW: I will defer all questions about military personnel policies to the Department of Defense.

Q How does the President -- has he changed his mind on this or not?

MR. SNOW: The President's positions on all these matters are well-established, Les.

Q It is reported that the North Korean Special Envoy Jay Lefkowitz is to visit Kaesong Industrial Park inside North Korea next month. Can you verify that report? And what is the purpose of his visit?

MR. SNOW: No, I can't, and I don't know.**

Q Tony, on North Korea, the President took pains today to talk about cooperation with the Japanese on missile defense technology. Does he have something specific in mind toward broadening that cooperation or --

MR. SNOW: As we announced earlier, there has been, I believe -- and I'll have to go back, Sheryl -- but there had been an announced -- what was this, -- I know that there's been some discussion.***

Q Some redeployment, right. But anything beyond that? And also --

MR. SNOW: I was not in the restricted meeting, so I don't know anything specifically -- I'll try to find out.

Q And, also, it seemed that he was trying to send a message to the North Koreans that --

MR. SNOW: The message was that you cannot leave Japan unprotected, and Japan does not intend to remain unprotected.

Q On Iran, Iran is now saying that they're going to not have a response to the offer until August. The G8 wants a response July 5th. What happens if they do not respond by July 5th? Will steps be taken, or will you just wait until August?

MR. SNOW: At this point, the ministers at the G8 made it clear today that they expect to receive a reply through Ali Larijani to Ambassador Solana on the 5th of July, when they meet. That has been described as the appropriate forum for providing an answer, and they expect to get a proper answer through those channels on that date.

Q Tony, what's the White House response to all that's going on in Israel and Palestinian territory?

MR. SNOW: Well, a couple of things. First, there's pretty much unified international reaction, which is that Hamas needs to give back the Israeli soldier and needs to renounce terror, and needs to do so immediately. The second thing is that we hope that Israel, in trying to retrieve its soldier, will practice restraint, and that both sides will practice restraint in trying to lower the temperature and develop a sense of security in the region.

Q They've gone in and they've made some arrests of some Hamas officials and government officials.

MR. SNOW: I'm aware of that.

Q Does the President endorse that?

MR. SNOW: We are going no further than what we've said, which is, we are encouraging both sides to practice restraint.

Q Tony, a follow up, if I may. The President talked today about shared values in democracy in the Middle East, for elected officials, whether -- regards of what other countries think of them. Sixty-four officials have been arrested, including Cabinet members, members of Parliament. Is this a day for the United States to stand up for democracy in the Middle East, or should we get a free pass?

MR. SNOW: It's an argumentative question. I appreciate it, and I'm going no further than my prior statement.

Q Can you tell us a little more about tomorrow's event and how it came to be, and any machinations to make it all happen?

MR. SNOW: You don't have to do a lot of machinations when you say the President wants to come to Graceland. All you have to do is get out of the way, because everybody wants to be hospitable. Prime Minister Koizumi likes Elvis. He's made no secret of that, and so the President decided, yes -- he even did the -- by the way, everybody across the room heard you cackling today, Lester. That was some guffaw; that was terrific.

Q I was very amused. I mean, he's a very amusing man.

MR. SNOW: But, as a matter of fact, the Prime Minister released a CD for charity of his favorite Elvis songs, at one point. These two guys get along well. They like each other. They've worked closely together. In many ways, Prime Minister Koizumi has been an incredibly effective partner with the United States in working together on issues of security, and trade, and cooperation. And not only has their professional association been warm, but their personal association -- the President likes him. This is a fun thing to do, and so they're doing it.

Q Tony, if Memphis is under curfew, does the President have any reservations about going there and taking up valuable police power at a time when the city is in an intense moment?

MR. SNOW: Well, that's a good question, and I will give you an answer, but I don't have one now.

Q Tony, Tony, can I -- I have a three-part question.

MR. SNOW: Okay, I'll tell you what: bring it up here and let's -- do you really need it on camera?

Q Well, I wanted to know if you could share with us what the Prime Minister and the President discussed on the economics front, if beef came up, if they'll be having it for dinner?

MR. SNOW: Well, they -- the Prime Minister had it for dinner last night, and the President said he had it. I don't know if they're going to have it tonight, but they both had it last night. That was the way the President opened the press conference today.

Q I'm also curious if they talked about the issue of Koizumi's a visit to the Yasukuni Shrine?

MR. SNOW: Not that I'm aware of.

Okay, I'll take one more. Let's deal with the rest of these off camera. Thank you.

END 1:48 P.M. EDT

* Comments from the Vice President:

THE VICE PRESIDENT: "But I clearly do believe, and have spoken directly about the importance of a strong presidency, and that I think there have been times in the past, oftentimes in response to events such as Watergate or the war in Vietnam, where Congress has begun to encroach upon the powers and responsibilities of the President; that it was important to go back and try to restore that balance... So I do believe there is a -- it's very important to have a strong executive. What are the limits? The limits are the Constitution. And, certainly, we need to and do adhere to those limitations." (Vice President Cheney, Remarks at the Gerald R. Ford Journalism Prize Luncheon, Washington, D.C., 6/19/06)

THE VICE PRESIDENT: I served in the Congress for 10 years. I've got enormous regard for the other body, Title I of the Constitution, but I do believe that, especially in the day and age we live in, the nature of the threats we face, it was true during the Cold War, as well as I think what is true now, the President of the United States needs to have his constitutional powers unimpaired, if you will, in terms of the conduct of national security policy." (Vice President Cheney, Remarks To The Traveling Press, Air Force Two, En Route Muscat, Oman, 12/20/05)

**Special Envoy Lefkowitz is exploring the possibility of a trip to the region; however, the exact dates and meetings for this trip have not been confirmed.

*** The United States and Japan have a vigorous program of missile defense cooperation. Last week's agreement is part of a program to meet a longstanding North Korean missile threat. It is an exchange of notes to cover procedures to be used in cooperative development of a 21" version of an SM-3 (Standard Missile-3) ballistic missile interceptor. This would be an improved version of the current SM-3 missile, which was tested successfully last week, off the coast of Hawaii.

For Immediate Release, Office of the Press Secretary, June 29, 2006

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HAMDAN v. RUMSFELD (FULL OPINION)

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SALIM AHMED HAMDAN, Petitioner, v. DONALD RUMSFELD, ET AL., Respondents.

(Slip Opinion) OCTOBER TERM, 2005 Syllabus

NOTE: Where it is feasible, a syllabus (headnote) will be released, as isbeing done in connection with this case, at the time the opinion is issued.The syllabus constitutes no part of the opinion of the Court but has beenprepared by the Reporter of Decisions for the convenience of the reader. See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337.

SUPREME COURT OF THE UNITED STATES Syllabus

HAMDAN v. RUMSFELD, SECRETARY OF DEFENSE, ET AL.CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT, No. 05–184. Argued March 28, 2006—Decided June 29, 2006

Pursuant to Congress’ Joint Resolution authorizing the President to “use all necessary and appropriate force against those nations, or-ganizations, or persons he determines planned, authorized, commit-ted or aided” the September 11, 2001, al Qaeda terrorist attacks(AUMF), U. S. Armed Forces invaded Afghanistan. During the hos-tilities, in 2001, militia forces captured petitioner Hamdan, a Yemeni national, and turned him over to the U. S. military, which, in 2002,transported him to prison in Guantanamo Bay, Cuba. Over a yearlater, the President deemed Hamdan eligible for trial by militarycommission for then-unspecified crimes. After another year, he was charged with conspiracy “to commit . . . offenses triable by militarycommission.” In habeas and mandamus petitions, Hamdan assertedthat the military commission lacks authority to try him because (1)neither congressional Act nor the common law of war supports trial by this commission for conspiracy, an offense that, Hamdan says, isnot a violation of the law of war; and (2) the procedures adopted totry him violate basic tenets of military and international law, includ-ing the principle that a defendant must be permitted to see and hear the evidence against him.

The District Court granted habeas relief and stayed the commis-sion’s proceedings, concluding that the President’s authority to estab-lish military commissions extends only to offenders or offenses triableby such a commission under the law of war; that such law includesthe Third Geneva Convention; that Hamdan is entitled to that Con-vention’s full protections until adjudged, under it, not to be a prisonerof war; and that, whether or not Hamdan is properly classified a prisoner of war, the commission convened to try him was established in violation of both the Uniform Code of Military Justice (UCMJ), 10 U. S. C. §801 et seq., and Common Article 3 of the Third Geneva Con-vention because it had the power to convict based on evidence the ac-cused would never see or hear. The D. C. Circuit reversed. Althoughit declined the Government’s invitation to abstain from consideringHamdan’s challenge, cf. Schlesinger v. Councilman, 420 U. S. 738, the appeals court ruled, on the merits, that Hamdan was not entitled to re-lief because the Geneva Conventions are not judicially enforceable. The court also concluded that Ex parte Quirin, 317 U. S. 1, foreclosed anyseparation-of-powers objection to the military commission’s jurisdiction, and that Hamdan’s trial before the commission would violate neither the UCMJ nor Armed Forces regulations implementing the Geneva Conventions.

Held: The judgment is reversed, and the case is remanded. 415 F. 3d 33, reversed and remanded. JUSTICE STEVENS delivered the opinion of the Court, except as toParts V and VI–D–iv, concluding: FULL TEXT OF OPINION IN PDF FORMAT

BRIEF FOR PETITIONER SALIM AHMED HAMDAN

On Writ of Certiorari to the United States Court of Appeals for the District of Columbia Circuit

QUESTIONS PRESENTED
1. Whether the military commission established by the President to try Petitioner and others similarly situated for alleged war crimes in the war on terror is duly authorized under Congresss Authorization for the Use of Military Force (AUMF), Pub. L. No. 107-40, 115 Stat. 224; the Uniform Code of Military Justice (UCMJ); or the inherent powers of the President?
2. Whether Petitioner and others similarly situated can obtain judicial enforcement from an Article III court of rights protected under the 1949 Geneva Convention in an action for a writ of habeas corpus challenging the legality of their detention by the Executive branch? FULL Brief for Petitioner in Hamdan v. Rumsfeld, 05-184 IN PDF FORMAT

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President Welcomes Prime Minister Koizumi (VIDEO)

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President Bush Welcomes Japanese Prime Minister Koizumi in an Arrival Ceremony on the South Lawn, FULL STREAMING VIDEO, The South Lawn, 9:11 A.M. EDT. The Japan-U.S. Alliance of the New Century

The U.S. Army Old Guard Fife and Drum Corps marches across the South Lawn during the official arrival ceremony for Prime Minister Junichiro Koizumi of Japan Thursday, June 29, 2006.The U.S. Army Old Guard Fife and Drum Corps marches across the South Lawn during the official arrival ceremony for Prime Minister Junichiro Koizumi of Japan Thursday, June 29, 2006. MORE GALLERY
THE PRESIDENT: Good morning. Laura and I are welcome -- are proud to welcome and honored to welcome our friend, Prime Minister Koizumi, back to the White House. Japan and the United States have built a strong alliance and a close friendship. Decades ago, our two fathers looked across the Pacific and saw adversaries, uncertainty and war. Today their sons look across that same ocean and see friends and opportunity and peace.

The friendship between our two nations is based on common values. These values include democracy, free enterprise, and a deep and abiding respect for human rights. These values have created a better life for both our peoples, a firm alliance between our two nations, and a common approach to our engagement with the world.

These values are under attacks by terrorist networks that bring death and destruction to all who oppose their hateful ideology. So the United States and Japan are working together to defend our shared values and win the war on terror.

Japanese naval vessels have refueled hundreds of coalition ships as part of Operation Enduring Freedom. Japan is now the third largest donor nation for reconstruction efforts in Afghanistan. In Iraq, Japanese self-defense forces have helped improve the lives of citizens in a key Iraqi province that will soon return to Iraqi control. And Japan continues to provide critical airlift support to coalition forces in Iraq. The people of Japan can be proud of the contribution their self-defense forces have made in the war on terror, and Americans are proud to serve alongside such courageous allies.

Japan and the United States are cooperating to address other threats to our security. Our two nations are working together through the six-party talks, insisting that North Korea meet its pledge to abandon all nuclear weapons and its existing nuclear programs. Japan and the United States are also founding members of the Proliferation Security Initiative that is working to keep dangerous weapons from rogue states and terrorist groups. And our two nations are repositioning our forces to counter the emerging threats of the 21st century.

As we meet threats to our security, we're also working together to improve the lives of our people and address common challenges. Our two economies are the largest in the world, and we are working to expand trade and investment opportunities for both our peoples. Japan and the United States are working together for a successful conclusion to the Doha negotiations, which would add to the prosperity of our nations and help lift millions in the developing world out of poverty.

With prosperity comes responsibility. So our two nations helped build the Asian Pacific Partnership on Clean Development and Climate, so we can make the latest energy technologies more widely available, reduce pollution, and increase energy efficiency.

Americans cherish our friendship with the Japanese people and value our alliance with the nation of Japan. And we honor the leadership of Japan's Prime Minister Koizumi. He's a man of vision; he's a man of integrity; and I'm proud to call him my friend. I thank the Prime Minister for coming to the White House. And I'm looking forward to joining him tomorrow at Graceland. (Laughter.) Officially, he's here to see the President -- but I know the highlight of his visit will be paying his respects to the King. (Laughter.)

Mr. Prime Minister, thank you for your leadership and welcome back to America. (Applause.)

PRIME MINISTER KOIZUMI: Good morning.

AUDIENCE MEMBER: Good morning.

PRIME MINISTER KOIZUMI: Our Japan children very good. (Laughter.) You can learn both Japanese and English. In the future, it's useful to you all.

(As translated.) First of all, allow me to express my heartfelt gratitude to President Bush, the government and the people of the United States for putting on such a splendid welcome ceremony for me.

In Japan, I am known as "Lucky Man." And I feel that I am lucky in the United States, as well. Look at this fine weather; I feel that this weather is also welcoming me.

I believe it is no exaggeration to say that over the past five years, there has been no world leader, alongside Mr. Bush -- President Bush, among the world leaders with whom I have felt so much heart-to-heart, felt so deep a friendship and trust and have cooperated with.

And I believe having personal and good relations between the two leaders is good not just for the two friends, the two of us. From now on, I'll engage in the discussions with President Bush on -- as Japan and the United States are allies on various matters, not simply of bilateral relations, but on the questions of how best we, our two countries, could cooperate together as allies in addressing various international issues.

I sincerely hope that my visit this time will enable our two countries to continue to cooperate and double-up together, and as allies in the international community make even greater contributions to the numerous challenges in the world community.

And in concluding, I would like to express my heartfelt wishes for further prosperity of the government and the people of the United States of America.

Thank you again. Such a wonderful hospitality. Thank you. (Applause.)

END 9:25 A.M. EDT, For Immediate Release, Office of the Press Secretary, June 29, 2006

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Wednesday, June 28, 2006

President Discusses Line-Item Veto (VIDEO)

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President Discusses Line-Item Veto, FULL STREAMING VIDEO, JW Marriott Hotel, Washington, D.C. 10:58 A.M. EDT. Fact Sheet: The Legislative Line-Item Veto: Constitutional, Effective, and Bipartisan

President George W. Bush gestures as he addresses an audience Tuesday, June 27, 2006 in Washington, calling on the U.S. Senate and members of the House of Representatives to quickly pass proposed Line-Item Veto legislation. White House photo by Paul Morse.President George W. Bush gestures as he addresses an audience Tuesday, June 27, 2006 in Washington, calling on the U.S. Senate and members of the House of Representatives to quickly pass proposed Line-Item Veto legislation. White House photo by Paul Morse.
THE PRESIDENT: Thank you very much. Thanks for letting me come by to say a few words. Larry, thanks for the introduction. I do want to congratulate the Manhattan Institute for being a think tank for new ideas and better ways for our nation to handle some of the problems we face. I appreciate your thoughts, I appreciate your works. For those of you who support the Manhattan Institute, I thank you for supporting them. For those of you who serve on the Board of Trustees, thanks for helping. And thanks for inviting me here today.

I want to talk about our economy. I want to talk about ways that we can -- the executive branch can work with the Congress to convince the American people we're being wise about how we spend our money. One of the things I want to assure you is that I believe that this country ought not to fear the future. I believe we ought to put good policy in place to shape the future. And by that I mean we shouldn't fear global competition. We shouldn't fear a world that is more interacted. We should resist temptations to protect ourselves from trade policies around the world. We should resist the temptation to isolate ourselves. We have too much to offer for the stability and peace and welfare of the world than to shirk our duties and to not accept an international community.

I know some in our country are fearful about our capacities to compete. I'm not. I believe that we can put policies in place that will make sure we remain the most entrepreneurial country in the world, that we're capable of competing in the world. And one way to do so is to keep pro-growth economic policies in place and be wise about how we spend the people's money. And that's what I want to talk about.

I do want to thank my Director of Office of Management and Budget, Rob Portman, who has joined us today. He has done a spectacular job as the person partially responsible for tearing down trade barriers and to making sure our nation was treated fairly in the trade arena when he was head of USTR. And now I've asked him to come over and manage OMB. It's a powerful position. The person who knows how the money is being spent is generally the person who's got a lot of influence in government. So I put a good friend in there to make sure we're able to work with the Congress to bring some fiscal austerity to the budget.

I want to thank Senator Thad Cochran, who is the Chairman of the Senate Appropriations Committee. It's awfully generous of the Senator to be here today. He's a good fellow and a fine United States Senator, and we're proud to have him in our midst.

I want to thank Senator Judd Gregg, who's the Chairman of the Senate Budget Committee. I've known Judd a long time. I've had to -- when I was running for president I was asked to debate my opponent a couple of times, and one of the things you do prior to debating your opponent is you have somebody serve as the opponent, and that happened to be Judd Gregg in both elections. (Laughter.) And I had to kind of reconcile myself with the fact that he whipped me in -- every time we debated. (Laughter.) He's a good man who's just introduced some interesting ideas on to the floor of the United States Senate about how to deal with some of the fiscal problems and financial problems this nation faces.

I'm proud to be here with John McCain -- speaking about debates -- (laughter) -- we had a few. But one thing we agree upon is that this country needs to have a line-item veto. And I'm proud the Senator is here and I appreciate you coming. (Applause.) I might add, one of the many things we agree upon.

I'm proud to be here with Congressman Paul Ryan, who's the House bill sponsor of the line-item veto, as well as Congressman Mark Udall. Thank you both for being here. Congratulations on getting that bill out of the United States House of Representatives. I'm also honored that Congressman Mike Castle, Congresswoman Marilyn Musgrave, and Congressman Henry Cuellar from the great state of Texas, has joined us. Thank you all for coming. (Applause.)

For those of you who are working the halls of Congress to get a line-item veto out, thanks for doing what you're doing. One of the reasons I've come to give you a speech on the line-item veto is to encourage you to continue working hard with members of both political parties to get the job done.

We're growing. This economy of ours is strong. And that's good news. It's amazing where we've come from, if you really think about it. We've been through a recession; we've been through a stock market correction; we've been through corporate scandals; we've been through an attack on our country; we've been through two major operations to defend the United States of America; and we've been through amazing natural disasters and high energy prices. And yet, we're growing. We're the envy of the industrialized world. The growth in the last year was 3.5 percent; it was 5.3 percent in the first quarter of this year. That's good news. It means the entrepreneurial spirit is strong, that people are investing and people are making wise decisions with their money. And as a result of the growing economy, the national unemployment rate is 4.6 percent. That's low. That means your fellow citizens are going to work. That means people are having a chance to put food on the table. And that's a positive indication of how strong our economy is.

We're a productive nation. Productivity is on the increase. That's a result of investments that are being made in the private sector. A productive economy is one that will yield higher wages for the American people. The more productive you are, the more likely it is your wages will go up, which means a higher standard of living for the American people. And I want to thank the Manhattan Institute's support for pro-growth economic policies, policies that really send a clear signal that we are still the land of dreamers and doers and risk-takers.

The cornerstone of our policy has been to keep taxes low, see. We believe, and you believe, that the more money a person has in their pocket, the more likely it is this economy is going to grow. We trust people to make the right decisions on how to spend, save, and invest. That's certainly not necessary -- necessarily the common policy here in Washington. There's some good and decent folks who think they can spend your money better than you can. I just don't agree with them. And one of the reasons why this economy is strong is because we cut the taxes on everybody who pays taxes in the United States. If you have a child, you got extra money. If you're married, we did something about the marriage penalty. It doesn't make any sense, by the way, to penalize marriage. Society ought to be encouraging marriage.

If you're an investor, you got tax relief because we cut the taxes on the dividends and capital gains. If you're a small business, it's likely that you pay taxes at the individual income tax rate because you're more likely than not to be a sole proprietorship or a Sub-chapter S corporation. Seventy percent of new jobs in America are created by small business, and it made sense to let our small business entrepreneurs keep more of their own money to save and invest and expand their businesses. The tax relief we passed is working, and the Congress needs to make the tax relief we passed permanent. (Applause.)

One of the benefits of keeping taxes low and growing your economy is that you end up with more tax revenues in the federal treasury. I know that seems counterintuitive to some people. You'll hear people say, let's balance the budget by raising taxes. By the way, that's not the way Washington works. They'll raise your taxes and figure out new ways to spend your money.

It turns out that when you encourage economic vitality and growth, the treasury benefits from it. In 2005, tax revenues grew by almost $274 billion, or 15 percent. That's the largest increase in 24 years. The economy is continuing to grow, and tax revenues are growing with it. So far this year, tax revenues are more than 11 percent higher than they were at the same point last year, which is significantly better than projected. These increased tax revenues are part of how we intend to cut the deficit in half by 2009. In other words, Rob Portman will be giving a report to the nation on how we're doing on the tax revenues -- I think you're going to find that pro-growth economic policies mean that more revenues are coming into the Treasury than anticipated, which makes it easier to deal with a current account budget deficit.

But there's a second part of the equation to dealing with the current account budget deficit and that is how we spend your money. Now, I'm going to talk about discretionary spending in a minute, but I just want you to understand that a significant problem we face is in our mandatory programs. And I know you know that. Those would be programs called Medicare and Social Security and Medicaid.

As you might recall, I addressed that issue last year, focusing on Social Security reform. I'm not through talking about the issue. I spent some time today in the Oval Office with the United States senators, and they're not through talking about the issue either. It's important for this country -- (applause) -- I know it's hard politically to address these issues. Sometimes it just seems easier for people to say, we'll deal with it later on. Now is the time for the Congress and the President to work together to reform Medicare and reform Social Security so we can leave behind a solvent balance sheet for our next generation of Americans. (Applause.)

If we can't get it done this year, I'm going to try next year. And if we can't get it done next year, I'm going to try the year after that, because it is the right thing to do. It's just so easy to say, let somebody else deal with it. Now is the time to solve the problems of Medicare and Social Security, and I want your help. I need the Manhattan Institute to continue to agitate for change and reform. You've got a big voice. You got creative thinkers, and if you don't mind, I'd like to put this on your agenda, and let you know the White House and members of the Senate and the House are anxious to deal with this issue and get it done once and for all.

In the meantime, we've got to do everything we can to control the spending that Congress votes on and approves every year. That's called discretionary spending. My administration is doing its part on discretionary spending. Every year since I took office, we've reduced the growth of discretionary spending that is not related to the military or homeland security. And the reason why we haven't reduced the growth on spending for the military is because so long as we've got troops in harm's way, they're going to have whatever it takes to win the war on terror. (Applause.)

We will not short-change the people who wear the uniform of the United States military. As the Commander-in-Chief of this fine group of men and women, I have got to be able to look in the eyes of their loved ones and say, one, the mission is worth it; and two, this government and the people of the United States support your loved ones with all we got. And that's exactly how I'm going to continue to conduct this war on terror. (Applause.)

But apart from defending our country, the last two budgets have cut non-security discretionary spending -- have cut the non-security discretionary spending. And that's not easy. It's not easy to do that, but the Congress delivered, at least on last year's appropriations bills. And they're working on this year's appropriations bills. Our view is, taxpayers' dollars should be spent wisely or not at all. One of Rob Portman's jobs is to analyze programs that are working, or not working. Look, every program sounds good, I know. But we're focusing on the results of the programs, are they achieving the objectives that we expect.

One of the first tests of this year on whether or not the administration can work with the Congress on fiscal restraint was on a supplemental spending bill. That's a bill that was passed to provide emergency spending for our troops overseas, and for citizens that had been hit by Katrina, and to prepare for the dangers of a pandemic flu. I felt those were important priorities that needed to be a part of the supplemental bill, and so we sent that bill up.

Obviously, there was some noise coming out of the Congress at first; people had different opinions. And that's a good thing about democracy -- you'll find there's all kinds of different opinions here in Washington, D.C. People had different views about what ought to be in that bill. Part of my job is to help bring some fiscal discipline to Washington. So I said that if the Congress exceeded a limit that I thought was wise, I would veto the bill. Congress acted responsibly. And it was hard work, and I applause Senator Cochran for his hard work on this measure. He brought the House together with the Senate, and they took out $15 billion in spending that had been added to the bill. It came under the spending limit I had set. And it's a good example of fiscal restraint set by the Congress. I appreciate so very much your leadership on that issue, Mr. Chairman. Thanks for working with us.

I believe another crucial test for the Congress is to whether or not the Congress will pass a line-item veto. And that's what I want to talk to you about today. A line-item veto would be a vital tool that a President could use to target spending that lawmakers tack on to the large spending bills. That's called earmarking, and that's become quite a controversial subject here in Washington, D.C.

I happen to believe that a lot of times earmarking results in unnecessary spending. See, part of the job of the President and the leaders in the Congress is to set priorities with the people's money. If you don't set priorities, the tendency is to overspend. And sometimes -- a lot of times, the earmark doesn't fit into the priorities that have been sent through the budgetary process. A lot of times earmarks are inserted into bills at the last minute, which leaves no time, or little time, for debate. Part of the process -- a good process is one in which members are able to debate whether or not spending meets a priority, whether it makes sense. Earmark sponsors are often not required to provide their colleagues with a reasoned justification for proposed spending. And not surprisingly, the process often results in spending that would not have survived had it not been subject -- subjected to closer scrutiny. Part of a good legislative process is for members to take a good look at whether or not a spending request meets a priority or not.

And the process has changed. According to the Congressional Research Service, the number of earmarks has increased from about 3,000 to 13,000 over the last decade. In other words, this process is taking place more and more often. I don't think that's healthy for the process. Matter of fact, I think it's circumventing the process. Now, that's up -- obviously, up for the legislature to determine whether I'm right or not. The President proposes, and the legislative body disposes, and I'm proposing a way to help deal with this problem. And that way is to pass a line-item veto.

Now, here's why it's necessary. First of all, part of the problem with the line-item veto is that it's oftentimes deemed to be unconstitutional. As a matter of fact, I know there are people in this room that helped pass the line-item veto in 1996. President Clinton was the President then, and the Congress -- in my judgment -- wisely gave him the line-item veto. And yet, shortly thereafter, when he started using the line-item veto, the Supreme Court struck it down because they concluded that it unconstitutionally permitted the President to unilaterally change a law passed by the Congress. In other words, the bill didn't pass constitutional muster.

And so we dealt with this issue. We figured out that, obviously, any line-item veto would again be challenged to our highest court. And so we proposed the following type of legislation: When the President sees an earmark or spending provision that is wasteful or unnecessary, he can send it back to the Congress. And Congress is then required to hold a prompt up or down vote on whether to retain the targeted spending. In other words, the Congress is still in the process.

The line-item veto submitted would meet the Court's constitutional requirements. And that's important. Members of Congress need to know that we've thought carefully about this, and we've worked with them to make sure that that which is passed is constitutional.

The other thing the line-item veto needs to do is it will shine the light of day on spending items that get passed in the dark of the night, and that will have -- in my judgment -- a healthy -- it will send a healthy signal to the people that we're going to be wise about how we spend their money.

The bill I submitted will be an effective tool for restraining government spending because it will address a central dilemma created by unwarranted earmarks. And here's the dilemma: When members of Congress are faced with an important bill that includes wasteful spending in the bill, they have two bad options: On the one hand, they can vote against the whole bill, including the worthwhile spending, or they can vote for the whole bill, including the wasteful spending. When such a bill comes to the President it creates a dilemma. I've negotiated year after year on a top-line budget number. And Congress has met that top-line budget number, which means it's very difficult for the President, then, to veto the appropriations bills that have met the top-line budget number because the next year's budget negotiations will be meaningless. You can imagine members of the United States House or Senate walking into the President's office and saying, wait a minute, we met your number last year, and you vetoed the bill, so forget negotiations.

I want to be a part of the budgetary process. It's an important part of the President's working with Congress, and I'm not going to deal myself out of the budgetary process. So my point is, they can meet the size of the pie, but I may not like some of the slices of the pie. And therefore, what do we do about it? And one way to deal with it is the line-item veto. The President could approve the spending that is necessary, could red-line spending that is not, and then let the Congress decide whether or not the President is right. It's a fair process; I believe it's a necessary process.

Many members in Congress, I know, want to do the right thing. And so one of the interesting things about the line-item veto is it will help deal with that dilemma I described, either all or nothing when it comes to voting for appropriations bills. You know, sometimes a member of Congress gets a special project for the district, and they go back and tout the project. Then you have members who don't agree with earmarking, and they don't have any special project to tout to the district. And yet, the people in their district are voting for the special project for the other person's district. And I think the line-item veto -- I know the line-item veto would help resolve this dilemma.

You see, if there's an opportunity for the President to red-line certain programs and hold them up to the light of day, it will probably mean members of Congress are less likely to propose the earmarks in the first place. Rather than being able to move a special project into the bill without hearing, this -- the President would have the opportunity to say, wait a minute, this doesn't make much sense, it doesn't seem to fit into the priorities; this special project, this unusual study -- (laughter) -- or this particular project, this doesn't make sense.

I believe that part of a budgetary reform program is the line-item veto, the opportunity to put the light on such programs. And that will help members resolve the dilemma of either voting for an important bill with bad items in it, or being a part of trying to put bad items in it in order to justify their existence in the Congress.

The good thing about the line-item veto, it has bipartisan support. We've got a Democrat member from the United States Congress who supported that bill strongly. Governors have had the line-item veto. I met with Senator Ben Nelson earlier this morning in the Oval Office -- he talked about what an effective tool it was to have the line-item. Did you have it, Engler, when you were governor? Engler had it. It's an important part of relating with the legislative process. And by the way, these aren't just Republican governors with the line-item veto, they're Democrat and Republican governors who are using that line-item veto effectively.

The line-item veto has bipartisan support in the Congress. Thirty-five Democrats joined more than 200 Republicans in the House to get the bill passed. That's a good sign. I was disappointed, frankly, though, that more Democrats didn't vote for the bill, especially those who are calling for fiscal discipline in Washington, D.C. I mean, you can't call for fiscal discipline on the one hand, and then not pass a tool to enhance fiscal discipline on the other hand. You can't have it both ways, it seems like to me.

Now the Senate is going to take up the measure. And again, I want to thank the Senators who are here for strategizing on how we can get the bill moving. Senator Frist is committed to getting the bill moving. Senator McCain is one of the important co-sponsors, as is Senator John Kerry. I remember campaigning against him in 2004, and I remember him talking about the line-item veto, and I appreciate the fact that he's living up to the political promises he made. It's a good sign, and I applaud Senator Kerry for taking the lead on the line-item veto. And I hope members of his party listen to his justifications for that important piece of legislation.

What's really interesting is, we've had senators on record for the line-item veto. After all, the Senate passed a line-item veto in 1996. And for those senators who passed the line-item veto in 1996, I hope they still consider it an important vote in 2006. Ten years hasn't made that big a difference. It was good enough 10 years ago, it's good enough today, for those who voted for the line-item veto. (Applause.)

Oh, I know this town is full of all kinds of politics, but we ought to set politics aside. We need to set politics aside when it comes to reforming Social Security and Medicare, and we need to set politics aside so that the President can work with the Congress to bring fiscal discipline to our budgets. That's what the taxpayers expect from those of us who are honored to serve.

So that's my opinion on the line-item veto. I hope you can feel -- tell I feel strongly about it. I think it makes sense, no matter who the President may be. I think it makes sense for a Republican President to have a line-item veto, and I think it makes sense for a Democrat President to have a line-item veto. And I urge the United States Senate to pass this important legislation so we can reconcile whatever differences there are between the House and the Senate version, and show the people that we are serious about being responsible with their money.

Thanks for letting me come by and say hello. (Applause.)

END 11:26 A.M. EDT For Immediate Release, Office of the Press Secretary, June 27, 2006

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