Press Gaggle by Ari Fleischer

Air Force One
En route Minneapolis, Minnesota

12:03 A.M. EDT

MR. FLEISCHER: All right. I'll give you a report. The President, prior to departure, had the intelligence and the FBI briefing. And he will arrive at Micro Control Company this afternoon and will have a meeting with small business owners and employees. We have a handout on who they are for you. And then he'll make remarks on the economy.

The Micro Control Company is a manufacturer of test equipment for the electronics industry and was founded by Harold Hamilton in 1972. A year later, Micro Control designed the first microprocessor controlled test system. This was the first in a series of technological innovations made by this company. Today they deal predominantly with burn-in testing, which is the process of stressing and testing electrical devices to ensure optimum performance. The process forces defective devices to fail before they are incorporated into assemblies, therefore making sure that assemblies are done in as safe a way as possible, and in a way that the product is useable.

The company's product line includes high power burn-in test systems for memory and logic applications, automatic test equipment, supplemental equipment. Among the company's list of the customers are AT&T, Bell Labs, Intel, some of the big telecommunication companies.

Another way to describe what they do, to put it more succinctly is they help American companies to produce the world's finest technology, from Internet servers to microwave ovens.

Q: Microwave ovens, okay. (Laughter.)

MR. FLEISCHER: I had to go from the briefing papers to the President's speech to make the translation.

And then the President will return to the White House this evening and that is that. So I am at your disposal.

Q: Do you have any reaction to the IAEA's report on Iran's nuclear efforts? And, secondly, in his comments yesterday what kind of new line was the President trying to draw, in terms of Iran's seeming clandestine efforts to achieve a nuclear weapon?

MR. FLEISCHER: Well, the President welcomes the international community's report about Iranian attempts to develop nuclear weaponry. The report stated that Iran had -- there are a number of past failures by Iran to report material, facilities and activities as required by safeguard applications.

The report noted that the enrichment plan that Iran is under IAEA safeguards, and the board encouraged Iran not to introduce nuclear material at the pilot enrichment plant, as a confidence building measure. And then the board called on Iran to take two specific concrete steps. One is to permit the IAEA to take environmental samples at locations inside Iran. And they also call on Iran to ratify an additional protocol making certain that Iran is acting in a way that provides assurances to the international community of the peaceful nature of Iran's nuclear activities.

The board is concerned, the international community is concerned and the President is concerned. The President welcomes this report. It's international reinforcement of the President's message yesterday that the world, broadly speaking, joins together in fighting proliferation and making certain that Iran does not develop nuclear weapons.

Q: Iran rejected those, quickly rejected those requests, though, today, according to the reports just before we left. What next?

MR. FLEISCHER: Well, I've seen mixed commentary on what Iran's reaction has been. Iran did not support the board. All nations of the IAEA supported this; Iran did not. But then Iran has issued statements welcoming this. So I think it remains to be seen what Iran's reaction will be.

But if Iran is not pursuing nuclear weapons, why wouldn't they cooperate fully and completely with the IAEA?

Q: Ari, is there a military option on the table for dealing with Iran?

MR. FLEISCHER: The President wanted to see what the IAEA reported. Clearly, the United States and the international community share the same concerns about Iran. The President's hope is that the future of Iran will be decided by the Iranian people. There is a tremendous young population in Iran that is yearning for a better way of life and a more tolerant way of life. That's where the President is focused.

Q: Will there be more efforts to go to the U.N., to bring this before the Security Council?

MR. FLEISCHER: The IAEA just made its report. I think the world will be very interested in Iranian reaction -- and Iranian reaction will be telling. If the Iranians are pursuing peaceful nuclear energy, as they claim they are, then they have every reason to comply with the IAEA's request, particularly the two specific requests to take the environmental sample and to sign the additional protocol.

So I think the international community will watch Iran's next move.

Q: So is the President still undecided on whether he believes Iran is, in fact, already committed to acquiring a weapon? Or does he -- I mean, does he think that Iran has actually made that decision?

MR. FLEISCHER: The President is concerned about Iranian efforts that indicate they want to acquire nuclear weaponry. And as the President said, we -- which is an expression representing the international community -- will not tolerate Iranian development of nuclear weaponry, which is exactly what the IAEA report is all about.

The world's protocols for fighting against proliferation are important and that's why Iran needs to comply. Otherwise, the world will conclude that Iran may be producing nuclear weapons.

Q: Does the U.S. have any sort of leverage going forward? If so, what?

MR. FLEISCHER: I think already the European Union has taken a look at this report and they will make their judgments about ongoing trade with Iran. But proliferation remains a vital issue around the world -- unless the international community is content to let various nations acquire nuclear weapons. The President is not. The international community is not. And this is why the report by the IAEA today is significant.

Q: Ari, what kind of support can you give the protesters in Iran, other than just verbal support?

MR. FLEISCHER: I think history has shown, and there are many recent examples of it in eastern Europe and in the former Soviet Union, that when the President of the United States speaks out with moral clarity and urges governments to engage in openness and tolerance, and to welcome dissent and democracy, it has a profound impact. And it's a message that is well received by people who yearn for freedom.

That's not to make light of it, that's an important action that American Presidents have taken in the past, and that this President has taken today.

Q: Is there a concern that there could be a backlash against these people, when you come out in support of them?

MR. FLEISCHER: The choice is be silent in the face of brave people who seek tolerance, who seek freedom, or speak out as the President takes the side of those who seek freedom and opportunity.

Q: -- the President made clear that he's not taking any options off the table. Does he reserve that same right to not take any options off the table with dealing with nuclear proliferation in whatever country it might be?

MR. FLEISCHER: I think it's a fair statement that this President, as a matter of overall policy around the globe, does not take options off the table.

Q: Does that apply to Iran, as well? Are you saying that the military option is not off the table?

MR. FLEISCHER: I re-state what I said, that as a broad matter of policy that applies around the globe, the President does not take options off the table.

Q: Has the President talked to the Secretary of State, in terms of his visit to Jordan, upcoming?

MR. FLEISCHER: I don't know.

Q: Is he optimistic that Powell can accomplish anything?

MR. FLEISCHER: I think the President is hopeful. There continue to be many conversations between the United States, the Israelis and the Palestinians. As you know, the President yesterday spoke with President Mubarak of Egypt. And this is all aimed at helping the Israelis and the Palestinians to find a way to cooperate on the security front. The President thinks the best way to protect Israel's security is for a strong Israel to cooperate with a Palestinian Authority that's dedicated to fighting terror; and for a Palestinian Authority to cooperate with Israel.

Q: I was going to ask about this weekend. After he gets back from Georgia, what happens -- Saturday, Sunday?

MR. FLEISCHER: The President will be at the White House over the weekend. He has t-ball Sunday, opening game of t-ball season.

Q: Anything Saturday?

MR. FLEISCHER: Chairman Ripken.

Q: What about Berlusconi? Is he coming into town this weekend?

MR. FLEISCHER: He's too old to play in the game. (Laughter.) But he appreciates your interest.

Q: Is he disappointed you're not letting him? He's coming in July, isn't he?

MR. FLEISCHER: Prime Minister Berlusconi is not coming this weekend.

Q: Ari, I just have a question on Iraq. I was wondering if you had any reaction to the Wall Street Journal article saying that the White House is considering a plan to use future oil revenues to help pay for Iraq reconstruction?

MR. FLEISCHER: The President has always said the Iraqi oil revenue belongs to the people of Iraq. And, of course, that will be used to help them in improving their lives and better their lives, which is all part of reconstruction.

Q: Isn't it a problem that the pipeline -- the production capacities have been destroyed? They've analyzed and the pipelines won't be in operation for at least six months, so it will be a while longer than you thought before oil revenues can come on stream. Is there something to do in the meantime to provide revenues for Iraq?

MR. FLEISCHER: Well, indeed, there are issues that have to be addressed and have been addressed and continue to be addressed in helping the Iraqis to increase their oil production. Oil production has, in fact, been increasing. The exact pace of it will be determined by engineering facts on the ground. You can talk to -- probably the folks in Iraq would have the statistics on it. I didn't bring them back to the airplane with me on what levels of increase have already taken place, but they've been marked. There is more room to grow, and it's important to help the Iraqis to get increasingly back on line.

Q: But is the administration considering some form of credits, to give credits now for oil that will come on line later?

MR. FLEISCHER: I don't know. You'd have to talk to the people directly involved in that. I don't know.

Q: Anything new on that missing plane in Africa?

MR. FLEISCHER: I've heard nothing new.

Q: The committee that decides when recessions begin and end says it can't -- it still doesn't have enough data to say that the last recession has ended. Does the administration think the recession may still be going on?

MR. FLEISCHER: I had not heard that. I can tell you that -- just remembering right off the top of my head, we do know from the Department of Commerce, I think is the agency that releases economic growth figures, GDP, that of course the first three quarters of 2001 were negative, the fourth quarter of 2001 was positive; then you had, of course, five percentage point growth in the first quarter of 2002, and then you've had a jagged period of growth since then.

Q: It isn't only growth. There are other factors that this committee looks at, too.

MR. FLEISCHER: You're referring to the group, the Institute for Business -- IBRE or IBER, I believe is what its title is. Tom, I just haven't heard that specific report today. But judging by the patterns of growth in the economy, which is where -- which is pretty much a traditional measurement, the economy emerged from recession in the fall of 2001 and has had low growth since then.

Q: Was the President disappointed on the jobless claims report this morning?

MR. FLEISCHER: It's not a practice to comment on the weekly unemployment insurance claims, because of the great fluctuation. This is a weekly report that comes out on Thursday. I can tell you, not from the President's point of view --

Q: They stayed below --

MR. FLEISCHER: I think they stayed below. I think they were 4,000 market expectations. The market expected, I think, 425,000 claims and they came in at 421,000, if I recall.

Q: And they also stayed above 400,000 for the 18th consecutive week.

MR. FLEISCHER: The President continues to think unemployment is too high, and that's why he's focused, as he will today, on the jobs package and on growth and on recovery. That remains his top domestic priority. But in terms of today's report, specifically, the market had expected 425,000, it came in 4,000 lower than market expectations.

Q: Does he draw anything from that at all, or is it too small?

MR. FLEISCHER: No, economists will tell you definitely not to draw overall implications from the weekly UI claims, because there's too much fluctuation. And, of course, unemployment is a lagging indicator. Growth typically kicks in faster than -- earlier than the unemployment rates decline.

Q: Are you guys taking credit for the stock market surge of recent weeks, Ari?

MR. FLEISCHER: No.

Q: Why not?

MR. FLEISCHER: Because the stock market is something that investors make their decisions about. They make their decisions on a variety of factors that can include the status of the overall economy. The President's focus is on improving the status of the overall economy, which creates a wonderful ripple throughout many sectors of the economy, that can include markets. It also includes people's ability to find work and people's productivity, people's income, all of which affects the economic well-being in American's lives. But, no, the answer is no.

I do notice that the gigantic down arrows that used to accompany the President's speeches are no longer seen, and they have not -- interestingly, and I don't understand why -- been replaced by gigantic up arrows as he speaks. (Laughter.)

Q: Does he ever look down to see those arrows when he's talking? (Laughter.)

MR. FLEISCHER: No, but he does hear about them afterwards. He did hear about them afterwards. That was just about a year ago.

Q: Are you seeing any effect on the economy of the tax cuts?

MR. FLEISCHER: It's too soon to say. The refund checks have not gone out yet. The whitholdings are only now being adjusted in accordance with the schedule the Treasury laid out. So it's too son to say.

Q: Thanks.

MR. FLEISCHER: Thank you everybody.

END 12:19 P.M. EDT