Press Briefing by Mike McCurry

The Briefing Room

1:28 P.M. EST

MR. MCCURRY: Good afternoon, ladies and gentlemen. Welcome to the White House. Welcome to our daily briefing. And we'll pause for one moment while Time Magazine takes its seat.

Q: Thank you.

MR. MCCURRY: Thank you.

Let me start by telling you that -- I will not read the whole thing -- but the President has a statement on this anniversary of the Summit of the Americas. You'll recall that last December he joined with 33 other democratically-elected leaders from the Western Hemisphere in Miami, and together they charted a course for our relations designed to strengthen and advance democracy in this hemisphere -- to protect environment and natural resources, to expand opportunities for all nations and communities to promote a new hemispheric partnership for economic prosperity.

There has been a considerable amount of work in the year since the summit done to further that agenda. And today Mack McLarty, who has had the lead here at the White House and working with many of the governments in the region, will present to the President a summary of some of the report. I expect the President will also correspond directly with his 33 counterparts, really discussing the architecture that now exists for us both in our bilateral relations and in our regional work to address the overall goals of the summit. That statement available at the conclusion of the briefing, or shortly thereafter.

And that's it on my dime. What about you?

Q: Have you seen the letter from Senator Dole and Senator McCain asking for assurances before a Senate vote on Bosnia that the administration -- that the U.S. will be involved in training and arming the Bosnian army?

MR. MCCURRY: I've seen the letter, and I presume you have seen or will shortly see the President's letter that he has sent making it clear that we intend to coordinate the work of third countries as we provide the necessary balance that will contribute to stability in the Balkans upon the departure of NATO's implementation force.

You'll recall that the Dayton Accords themselves have provisions in them for a build-down of arms. We take the view that the best thing to do is to limit arms in that theater so we can reduce tension and reduce instability. But even with arms control, as we have anticipated, we believe that the Bosnian Croat federation would still be at some disadvantage. And because of that, we've made a commitment to the Bosnians that we would coordinate an international effort to ensure that they've got what they need for self-defense once the international force departs.

Now, that said, our military commanders have briefed the Commander-in-Chief that they're very cognizant of the need for the international force to be impartial. And providing arms and training to the federation by the military elements of the implementation force might jeopardize that impartiality, which is why we have indicated that we would coordinate the work of third countries in providing that equipment and training.

Q: Is there any kind of guarantee in this -- in the President's letter to Dole that the United States will go beyond coordinating to ensure that the results that Dole and McCain are looking for are achieved, that the result of building up the Bosnian military is achieved?

MR. MCCURRY: An explicit pledge by the President that we will ensure that the Bosnian government has what it needs for self-defense.

Q: May I follow up? They have said that they are not satisfied with Clinton's letter and that they want, before the Senate consideration this afternoon, they want assurances that a more explicit statement that the U.S. would guarantee and take the lead in providing and training and arming of the Bosnian government. They specifically said they're not satisfied with the letter.

MR. MCCURRY: As with so many things having to do with the Balkans, it's clear that for things to happen, the United States must take the lead. And we have indicated that we will ensure that this work is done, and that will require U.S. leadership to be certain. We've pledged to do that, and we've pledged to work with those third countries that will make the necessary equipment and training available, and I'm certain that we will do whatever follow-up work is necessary to satisfy the concerns of the senators.

Q: But their concern is that U.S. leave the job to the, as you keep saying, the third countries. They say the U.S. should do it, not leave the job --

MR. MCCURRY: They should then have a very good briefing from General Shalikashvili and the military leadership of our nation, working with NATO military commanders who are quite concerned about the position that would place the international force in. I'm sure that Senator Dole and Senator McCain want to minimize the risks to U.S. forces that will be deployed in Bosnia. And they will understand very quickly that it is because of that concern and because of our desire to minimize risks to U.S. forces that we believe that that work should be undertaken by third countries and not by the military units that will be deployed there to secure the peace agreement that had been reached by the parties.

Q: Well, that's my question. Why don't you have Shali pick up the phone and call him?

MR. MCCURRY: Well, he's available; he's briefed -- and I would imagine they're aware of his views. But we will be more than happy to make sure that people go through in detail why we believe that implementation force should not be involved in the job of equipping and arming the Bosnian government.

Q: The letter that you're going to release is the same one he sent yesterday? This is not a new response to their letter?

MR. MCCURRY: No, he sent a specific letter to the Majority Leader on the administration's policy with respect to military stabilization measures in Bosnia. We have not released that, but my understanding is that Senator Dole has commented on that now, and can't we see whether that's something that we would release.

Q: -- to their --

Q: Was this before Dole and McCain's letter that the President --

Q: -- yesterday's letter, right?

MR. MCCURRY: No, yesterday we sent a letter generally. There was a letter -- a letter -- previous letter sent to Senator Dole that outlined in specific our concerns. This letter is not in response to the concerns they have stated. But as I just indicated, we've made our views well-known in the Senate.

Q: This is a new letter? There's a new letter today?

MR. MCCURRY: There is not --

Q: This is the old letter.

MR. MCCURRY: This is an older letter. There's a new letter from Senator Dole and Senator McCain.

Q: There's no new correspondence.

Q: Yes, you haven't responded to that.

MR. MCCURRY: There's not a direct response to that, but we will, as I say, be willing to work with the senators to satisfy their concerns on this point

Q: Mike, this was an issue two weeks ago. A reporter asked the President about this at a news conference in Europe. And the President gave a similar answer to the one that you're giving today. But having seen this on the horizon and knowing this was a problem, why can't the White House meet with the senators and work out -- try to work out something so that it wouldn't all pile up just as you're getting ready to go to Paris?

MR. MCCURRY: We could not have been clearer in stating what our view is on equipping and training to the senators. The President has made this point repeatedly in his meetings with the leadership and with others. And they're well aware of our views. They're well aware of our concern of our military about the risk that U.S. forces would face if they were involved directly in that type of equipping and training. So --

Q: So what are they doing here then?

MR. MCCURRY: What are the senators --

Q: What are the senators doing by writing this letter --

MR. MCCURRY: We are looking for every opportunity we can to meet with them and to make the most persuasive case we can about the necessity of our deployment. But our views on equipping and training the Bosnian government are well-known, but so is the President's pledge to ensure that it gets done.

Q: I guess what I'm trying to say is do you think this is just sort of a last-minute ploy so that the Senate doesn't have to give the President the assurances that he wants before he goes off to Paris?

MR. MCCURRY: I am not going to speculate as to their motive. You can ask them that yourself.

Q: Dole's letter says that he understands the IFOR shouldn't be involved in the training. He talks -- they talk about wanting U.S. governmental forces outside of the IFOR to be doing this.

MR. MCCURRY: Well, it's very difficult to imagine how that would happen in an integrated plan such as the one that NATO has developed for the theater. It is hard to imagine how you would separate out forces that are involved in securing the peace agreement as against those that are conducting training and --

Q: -- it be done out of country, Mike. They are suggesting it be done out of country.

MR. MCCURRY: Well, there are lots of ways that you could coordinate the work that would happen.

Q: I'm sorry, what did you just say?

MR. MCCURRY: I said there are a lots of ways that we have pledged to coordinate the work that third countries will do. There are lots of ways that work or coordination could occur.

Q: Do you think that this is an issue that could hold up Senate consideration this afternoon if Dole's most recent letter says he's not going to bring it up until he's satisfied?

MR. MCCURRY: I have absolutely no way of knowing.

Q: Mike, with the President leaving tomorrow night, what kind of a signal does it send to, a, the parties in the former Yugoslavia, and, b, to the NATO allies that Congress is still in such disarray on this, and that there still hasn't been a vote and there's so much skepticism about it?

MR. MCCURRY: Well, it will be disconcerting to our allies that there is not support in the United States Congress for NATO's implementation force. Every leader, every European leader that the President has discussed Bosnia with in recent weeks, those that he saw on his recent trip there, to a person, talked about the importance of U.S. leadership in the implementation force that is going to Bosnia. They're expecting us to lead this effort. The peace agreement itself would not have been achieved if the United States had not pledged to be a part of this implementation force. And I'm certain that mixed signals can't make any of our allies happy. At the same time, they understand the commitment the President has made. They have -- they understand well the President's determination to be sure that we don't miss this opportunity to bring peace to the Balkans.

Q: And the signal to the former warring parties, if they are former?

MR. MCCURRY: Well, they will have an opportunity to see the President on Thursday. They know his commitment. And they also know that the deployment of the enabling force is now occurring. And they're expecting, just as we expect them to live up to their commitments, they're expecting us to make good on ours.

Q: Are Dole or McCain included in the group of senators that are meeting with the President this afternoon?

MR. MCCURRY: No, this was not designed to be a leadership meeting. It was designed to reach out to a broader cross-section of the Senate.

Q: Mike, what third countries are under consideration for this coordinating effort?

MR. MCCURRY: There are a number of them, and as we engage in diplomatic efforts with them, at this point I don't think it's proper for me to identify them. But it's not -- none of the names are a surprise. And in fact some news organizations have reported on the obvious and likely choices.

Q: Mike, Holbrooke said on the Hill last week that you guys are going to go ahead with the deployment whether you get a congressional vote or not. But the President seems to not like that question, and I don't think that you've answered it either. Can you say today, firmly, that you're going to go ahead and deploy those men on Friday?

MR. MCCURRY: We don't expect to be in that situation. We expect to have an expression of support for the troops that will be there to do the very necessary work of bringing peace into the Balkans and helping the parties secure the agreement that they will sign in Paris on Thursday.

Q: -- question -- Holbrooke answered the question according to administration policy?

MR. MCCURRY: The Assistant Secretary of State for European Affairs well understands the role the Commander in Chief must play to protect U.S. interests around this world.

Q: And nothing has changed since --

MR. MCCURRY: Nothing has changed. We still expect to have an expression of support for our troops as they do this very necessary work in Bosnia.

Q: Both you and the President today used the term "support for our troops". So I take it you're not expecting support for the mission. And how does that undermine the mission itself in terms of our relations with our allies?

MR. MCCURRY: I don't believe -- I don't believe an expression of support by Congress for our troops in any way undermines the mission that they will be addressing while they are deployed.

Q: How disappointed are you that it's not support for the mission, support for the troops? I mean, that's like mom and apple pie.

MR. MCCURRY: Well, the administration, as any administration, would rather enjoy full support for all of its policies. But the critical ingredient here is support for the troops being sent to do a difficult but important job in the Balkans. And we believe at the of the day that support will be present as Congress deliberates on the resolutions that will be considered both in the Senate and the House.

Q: Will private U.S. contractors, defense contractors, be allowed to equip and train the Bosnian army?

MR. MCCURRY: We will ensure this country -- ensure that this work will be done. And we'd prefer that it be done by third countries that have got experience in doing that type of training and that type -- and providing that type of materiel. But we will ensure that the work is done, because we understand and agree with the concerns of those senators that believe there must be a military balance in the region, and for there to be a long-term prospect for peace in the Balkans.

Q: Is there anything stopping private U.S. contractors from doing this work?

MR. MCCURRY: There may well be certain aspects of arms control and export regulations that would apply, but I'm not enough of an expert to kind of detail those. Again, our preference is that it would be done by third countries.

Q: When you say that you fully expect Congress to have offered support by the time the President is in Paris, do you mean both the House and the Senate?

MR. MCCURRY: Well, we would hope both, and I think that we would like to expect both, being optimists.

Q: Does the President plan to meet with any House members, particularly any of those who just came back from Bosnia before he leaves tomorrow?

MR. MCCURRY: Well, he has seen some members of the earlier congressional delegation, and he's heard reports about those that have just returned, and he's very encouraged by the reports of those members of Congress who have actually gone and talked to the people of Bosnia, talked to leaders there, and talked to some of the initial elements of our military force that will be deployed. They all come back very impressed with the importance of the mission; some have come back with changed views on whether or not this deserves their support. So we have encouraged members to go, and we have encouraged other members to talk to those who have gone.

Q: But is he going to make any -- is he going to meet with any House members before he leaves?

MR. MCCURRY: He may very well, but I don't have anything that's scheduled at this point.

Q: Further on the vote of support in Congress, as you know, the Senate is going to have three votes. One is a vote on the cutoff of funds; one is a vote on supporting the troops, but not the mission; and the third is on supporting the mission, but with conditions. What happens if the Senate only votes on supporting the troops, but not the mission?

MR. MCCURRY: I'm not going to do a what-if today. That, we hope, will happen tomorrow, and we can deal with the reality tomorrow, depending on what happens.

Q: Does the President have any meetings in Paris other than with President Chirac, any other bilaterals?

MR. MCCURRY: He has a meeting with President Tudjman, Milosevic and Izetbegovic.

Q: Is that before or after the peace-signing?

MR. MCCURRY: That's after the signing in the afternoon.

Q: Separately or one meeting --

MR. MCCURRY: -- before? Did they switch that around? All right, they've apparently switched the schedule from what I've seen, so --

Q: Are those all unilaterals?

MR. MCCURRY: We'll have David -- David and Mary Ellen will be in a position to run through the schedule and brief on it later. Maybe you guys can just jump up and do that at the end.

Q: Mike, you said that the U.S. would ensure that this work of equipping and training be done by third countries. Will the U.S. also ensure that this does not begin before there is some kind of leeway to allow the Bosnian Serbs to build down?

MR. MCCURRY: Well, we will proceed under the terms of the agreement. And based on what we've heard from the assessment team that the President sent to Bosnia to actually meet with the military leadership of the Bosnian government to assess their needs, we'll proceed in a manner that's consistent both with the U.N. resolution on lifting the arms embargo and that matches the provisions of the Dayton Agreement that call for an extensive arms control effort under the auspices of the OSCE.

That allows us to do the type of planning and training necessary to coordinate this effort, to see that the third country parties begin to answer the question how will they get this job done in a time certain, but it would restrict the actual transfers during the initial six-month period that's referred to in the Dayton Agreement. It would also be consistent with some of the restrictions on transfers of heavy weapons and other armaments.

There's a 90-day period in the Dayton agreement, and then another 100-day -- 180-day period that refers to the different types of weaponry that would be available to the parties. So it will be done consistent with Dayton, consistent with the U.N. Security Counsel resolution, but done in a way that ensures that the kind of planning and preparation that needs to occur can occur immediately.

Q: So the U.S. could be training the trainers in the meantime?

MR. MCCURRY: The United States, by saying that we will coordinate the work that needs to be done, will not delay in beginning the work necessary to do the coordination.

Q: I'm still a little bit confused. Will there be definite guarantees to prevent these third-party countries from just being funnels for American arms? And what if, in fact, that turns out to be the case -- I mean, what impact do you think that will have on the overall --

MR. MCCURRY: Yes, there are guarantees because there are restrictions on third-party transfers of weaponry that are a matter of our federal law. You'll recall yesterday we were dealing with the question of whether or not Israel would sell one of its fighter jets that includes a U.S.-made engine to Ecuador. So there are those types of restrictions that exist in arms export law, and those will apply, but those are not barriers to ensuring that we achieve the military balance that the President has pledged to achieve.

Q: Do you have a dollar figure on what ensuring would involve?

MR. MCCURRY: No, the -- there's not a specific dollar figure attached to that beyond the -- that's not included in the marginal costs of the Bosnia theater operations that we've calculated before. But there are -- we believe there is -- and there is some evidence that there have been arms available in the international arms market that have gone to the Bosnian government even during the period of the U.N. arms embargo, in violation of the arms embargo. And that does not appear -- funding of this or providing the weaponry does not seem to be a barrier to getting it to them -- making it an effective force so that it achieves the deterrent effect of balancing out other forces that are in the theater that is the critical element.

Q: Mike, has the government made a decision whether or not they would supply them with NATO standard arms or Warsaw Pact-type arms? Have you made that --

MR. MCCURRY: Well, that is -- there is a, as I say, a military assessment team that has just returned from Bosnia that's had that type of discussion with the Bosnian government. The type of -- the type of force posture that the Bosnian government army has at this point, it's fairly well known, and a pretty obvious answer to that. But I would leave it to those who are more militarily expert to answer the question of what type of weaponry would best integrate into the existing Bosnian government military forces.

Q: New subject?

Q: Wait, no -- one more on this. This military assessment team went over there specifically to find out what the Bosnian army needs to be brought up to parity.

MR. MCCURRY: Well, to get a --

Q: -- U.S. military assessment team or --

MR. MCCURRY: This was a team sent at the direction of the President, a U.S. government assessment team, consistent with the President's pledge to ensure that that balance be achieved. But it's also -- was to achieve a better understanding of what the current force posture of the Bosnian government is as they begin what we hope will be at first an effort to build down arms.

Now, that should occur principally on the Bosnian Serb side. The disparity of arms that exists in Bosnia right now is largely a disparity of heavy weaponry, the Bosnian-Serb army having access to much heavier armament and better armament than the Bosnian government.

Q: But this -- this information the U.S. will use to tell third countries here's what they need, this is -- to kind of draw up an overall plan --

MR. MCCURRY: It could --

Q: -- for arming and training them, even if we don't --

MR. MCCURRY: It could in part be that, but it could also be what are the likely needs as they assess the future. Equipping a deterrent force that is a self-defense force is much different from equipping an offensive military force that's capable of reclaiming ground.

Q: Mike, leading up to the departure tomorrow night and the debate on the Hill, what does he plan to do on Bosnia tomorrow?

MR. MCCURRY: We'll have an event tomorrow that's being planned we'll tell you about later in the day when it's finalized, but he will want to address again the importance of this mission when he has an opportunity to speak publicly tomorrow.

Q: Is that a daytime thing, or is that on departure?

MR. MCCURRY: It'll be during the day tomorrow. There may even -- there was some discussion of doing a departure statement, but we'll -- let's see how the day develops and give you a better sense later.

Q: Mike, can you fill in the details on the reprimand that Hazel O'Leary got from Leon Panetta? And does the President intend to talk to her about this?

MR. MCCURRY: No, I can't because that's not the nature of the conversation she had with Mr. Panetta. Mr. Panetta met with Secretary O'Leary yesterday to review her upcoming testimony on the Hill, to, one, give her support for the job she's been doing. She's been a superb Secretary of Energy. She has achieved an enormous amount of cost savings to U.S. taxpayers through her efforts to reinvent the department.

The Chief of Staff also reviewed the matter to which she will testify to, and also gave her strong support for her decision to ask the Department's Inspector General to look into some of the allegations that have surfaced in the press most recently.

Q: So, wait a minute. Are stories that Leon Panetta actually issued some kind of reprimand to Secretary O'Leary incorrect? He did not?

MR. MCCURRY: Yes, that's correct. He did not.

Q: If I may follow up, during this time when everybody is talking about cutting budgets and fiscal responsibility and austerity in government spending, is the President the least bit concerned about these stories that Hazel O'Leary may have taken these trips with some amount of extravagance?

MR. MCCURRY: Well, the President rightfully would be concerned about any examples of waste, fraud and abuse in the federal budget. But he also knows that those missions that Secretary O'Leary traveled upon, returned for every dollar of taxpayer money spent, about $1,000 in private sector-generated activity that brings jobs and commerce here to the United States. That's why these delegations go abroad.

A key feature of this administration's foreign policy has been promoting the economic interests of the American people overseas, because so many of our jobs in this global economy depend on our ability to compete and to sell our goods and services overseas. And that's the purpose in virtually every instance for which the Secretary traveled, except for those times that she was dealing with national security issues related to energy issues and specifically disarmament and nonproliferation issues. So those are again, in the manifest best interests of the American people because they involve our security.

Q: If I may follow up -- if I may follow up -- yes, I do. Using that argument, if she would have taken half as many people, she would have returned $2,000 for every dollar spent. (Laughter.)

MR. MCCURRY: You know, look, she's addressed those issues. The Inspector General will look at issues related to the natures of her delegations. And I don't want to comment on something that might be before an IG. But the important thing is that -- the important thing is that the work she was doing overseas was in the interests of the American taxpayer, ultimately. And how that work was done may or may not be something that she would want to see her Inspector General examine.

Q: Is the White House comfortable with waiting for this Inspector General's report? When we first heard the reports about David Watkins using the helicopter, for example, the first word was that he was doing it in the interests of serving the President and serving the presidency because the President needed to be well rested and needed to know how to play golf. And then the White House got into it, and there was a very quick resignation. But in this case, you're willing to take the time to wait out the --

MR. MCCURRY: Well, you're familiar with federal statute involving the work of inspectors general within the federal government, and it's not the White House's place to tell departmental inspectors general how to conduct their inquiries. So they will do it according to whatever stipulations they determine to be appropriate.

Q: You think that's the only way to --

MR. MCCURRY: I think it's -- there's no other way than to allow them to do the independent impartial work that they should do as inspectors general. And they shouldn't be getting instructions from the White House on how to conduct those very legitimate and appropriate inquiries.

Q: And did Mr. Panetta receive assurances from Secretary O'Leary that as far as she is concerned, there was nothing that was untoward in any of this travel, that she felt it was entirely appropriate all the way?

MR. MCCURRY: The Chief of Staff, as I indicated, supported her decision to ask the Inspector General to look at these matters.

Q: And the President, Mike, has complete confidence in Secretary O'Leary?

MR. MCCURRY: The President believes she is doing a superb job as Secretary of the Energy.

Q: On the wetlands legislation on the Hill, for those of us who have colleagues who may be covering that story, can you tell them whether the President is considering vetoing that legislation?

MR. MCCURRY: This is the Florida provision? I'm not familiar enough --

Q: I knew you would ask me that. They only sent me -- back of this story. (Laughter.)

MR. MCCURRY: Okay, I'm sorry, we'll have to -- I'll have to look into it. I've seen -- there are several different wetlands provisions that are pending, I think, but I'll have to find out which one you're talking about.

Q: Mike, further on O'Leary, there is actually some rumors on the Hill that the White House already is interviewing potential energy secretaries. How secure is O'Leary in her job?

MR. MCCURRY: I haven't heard anything that would lead me to think there would be a reason to conduct job interviews.

Q: Mike, do you have any further guidance on what the President will do on the securities litigation legislation?

MR. MCCURRY: No, my guidance was not to believe everything you read, that he is looking at the issue and that he's got some different concerns that need to be addressed. He's had a session on this last week, and he's asked for a statement -- he had a statement drafted that reflected one approach, but it's not necessarily going to be complete in satisfying some of his concerns. So at this point, I would not predict what he will do on the legislation. He has until December 19th to decide whether or not to sign it or to veto it.

Q: Would you expect some resolution today, or --

MR. MCCURRY: No, I would not expect it resolved today.

Q: Has he made the decision -- are you telling us he's not made a decision --

MR. MCCURRY: I'd say that he won't make a decision until he's had all of the matters that he's asked about addressed, and they have not been addressed to his satisfaction yet.

Q: Mike, the White House faces a 5:00 p.m. deadline on a subpoena from the Senate Banking Committee to turn over notes of a meeting that occurred here, occurred concerning Whitewater. What is the White House response going to be to that subpoena today?

MR. MCCURRY: Whatever it is, Mr. Fabiano will have it.

Q: Can I try again on wetlands?

MR. MCCURRY: You can, but we're going to have to look into it for you, and I won't have an answer.

Q: This is the language that would take away from EPA its veto power over protecting some wetlands.

MR. MCCURRY: Is it in the Interior bill?

Q: -- it says it's in

MR. MCCURRY: If it's in the VA-HUD bill, we've already indicated we have ample reason to veto that, so it would be one among many reasons for a veto.

Q: Are there any meetings scheduled to negotiate a continuing resolution so the government doesn't shut down on Friday?

MR. MCCURRY: Well, the Chief of Staff was on the Hill getting a briefing on the new CBO numbers today. A couple of points on that -- some of these, I believe, Mr. Panetta has already made on the Hill, but it was an encouraging meeting because it's very clear that the CBO's new estimate now is moving in the direction that places it much closer to the Office of Management and Budget forecast for the future of the economy.

We believe that they need to keep working now. They should score the President's seven-year proposal; they ought to score the budget proposal that the coalition has made, the group of moderate, conservative Democrats in the Congress. They need to consult further as the Congress and the President have already agreed to do, they need to consult further on these assumptions and forecasts. And we would hope this would be just the first of several more detailed meetings on the nature of the economic assumptions that will underscore the final agreement between the President and the Congress on a balanced budget plan.

We also believe that the Republican Majority now needs to -- having these new assumptions available, they need to go back and prepare new budget proposals that satisfy some of the President's concerns and the priorities that Congress and the President agreed to in the continuing resolution. The only budget plan the Republican Congress has put forward is the one contained in the Reconciliation Act which did not meet that test and which the President of course vetoed. So they have no plan at the moment. They need to figure out how they're going to address these assumptions.

And then finally, the Congress, because this is complex work, these are very technical discussions today about the nature of the economic -- what we predict for economic performance in the future, but we have concerns about some of the underlying thrust of the CBO assumptions. They believe that wages are going to go down; unemployment's going to go up; there's going to be lower growth; there will be fewer jobs; and there will be higher interest rates as a result of balancing the budget. The President believes balancing the budget is a good thing for the national economy, and that the national economy will be performing much better in the next century if we get this work done now.

CBO seems to think that balancing the budget might have negative economic consequences, and we just disagree and we think that that's something that the economists at both the CBO and the OMB ought to address further in greater discussions. In any event, writing a budget between now and Friday, under those circumstances, is going to be next to impossible. And so what Congress should do right now is to pass a continuing resolution that will take us into next year so we can work through these issues, continue the productive tone that we had in the session today and get on with the business of writing a balanced budget plan.

Q: CBO has looked at the President's proposal and says that 2002 it comes up $100 billion short.

MR. MCCURRY: Which is, if you think about it, very encouraging, because their last estimate, they said -- and remember you heard one Republican member of Congress after another screaming, you know, $230 billion in deficit, they've cut that by more than half now as a result of these assumptions, or the change in their assumptions. So we think now they work through this question of what the best technical assumptions are for the budget, the more they look at and the more they think about it, they'll probably get that figure down to zero, just as the President does in his proposal.

Q: Are you planning to make any adjustments to your proposal now that the CBO has scored it $100 billion off. And also, are you --

MR. MCCURRY: Well, they have not scored it, Mike; they've made an estimate. We believe they should score it.

Q: But are you planning to provide any more detailed information? They say they don't have enough information to do the complete detailed scoring at this point.

MR. MCCURRY: Well, we -- they have got enough -- they've got enough to make certainly a preliminary estimate. They estimated the President's previous proposal in June. We believe they can give Congress a good sense of what the -- what the -- what a good estimate would look like by looking at the proposal we have. We will answer questions specifically they might if they're interested in the legislative language that might apply to specific provisions if there's any need for clarity. But I'm told that they could probably do a pretty good estimate in more detail, or do at least a full scoring, based on some of the information they have and information we'd be willing to provide.

Q: Mike, any replacement in the works for Lee Brown yet? And can you give us a comment on him leaving to -- for Rice University?

MR. MCCURRY: I'm sorry, say again.

Q: He's leaving for Rice University. We're being told --

MR. MCCURRY: Yes, apparently he -- I have to hold back. They are going to have a press conference at --

Q: -- I indulge you guys.

MR. MCCURRY: They're going to have a press conference at 3:15 p.m. today, and we will have a written statement available at that time that will applaud the very good work that he has done in quarterbacking a comprehensive approach to fighting drugs that we think has been successful and has some notable achievements in the last two-and-a-half years.

We have been working on finding a successor. We've made some progress on that. And it would be way too early at this point to indicate that we've chosen the successor, but there has been some review of appropriate candidates that's been conducted.

Q: Mike, you mentioned that Congress should pass that will take you all through January. What's the likelihood of that happening --

MR. MCCURRY: Well, we hope, based on -- Mr. Panetta met with those who gave him the briefing today, and as we understand the relevant Republican participants in the negotiation begin to dig in on these issues, they begin to see how enormously complex the work is of drafting budget provisions in an environment in which the assumptions are changing.

And our sense is that at least in part, in some places within the Republican caucus, in both the Senate and the House, there's a desire to do this work the right way, to get on with balancing the budget, and getting it done quickly, but that we need not put a gun to the head of the federal government and say, you know, we're going to shut down the government Friday night at midnight if we don't get the work done. That's not the atmosphere that we need to resolve these issues.

And we believe there is a substantial portion of the Republican caucus that's willing to say, as long as we've got a commitment to good-faith negotiations to get the job done of balancing the budget, we can get -- you know, we ought to take a break during the holidays and come back and tackle this very early in the new year -- and with the understanding, obviously, that a lot of people are going to be working throughout the holidays on crafting the appropriate measures.

Now, we think that should be done. We think there is sentiment within the Republican caucus, in part, to see that done. And so we're hopeful that they will adopt that attitude.

Q: Mike, in the meantime, a lot of families in the northern states are not being able to draw on the low-income heating program. Is there any chance that the administration would allow the states to have an emergency contingency funds to draw upon?

MR. MCCURRY: Well, I'll have to ask further on -- I don't know what we've got available to us under law. They are operating -- one of the reasons why the LIHEAP program has been short-changed is because we're operating in the restricted environment of a CR. They can only draw down certain percentages. Again, that's happening across the board. Israel has not gotten its full ESF funding allotment for exactly the same reason. That issue came up yesterday.

But, you know, the consequences of living in an environment in which you're governed by continuing resolution instead of full appropriations leaves you in that situation. I'll see -- I'll check with HHS and see if there are emergency provisions that can be made for funding. But with the very cold weather we have, this obviously is a source of concern.

Q: I know this doesn't really involve you, but do you know the position of the flag burning amendment?

MR. MCCURRY: The President has got a record that goes back to his days in Arkansas on flag burning. He is --

Q: (inaudible)

MR. MCCURRY: No, he's had -- he has -- he worked -- as Governor, he supported legislation that would have outlawed intentional desecration of the American Flag. In fact, he had developed in Arkansas a statewide flag respect program. He feels strongly about the flag as a symbol of this country and as a symbol that deserves adequate protection, that probably could deserve some federal protection appropriately structured. It's a different matter to say that we should now for the first time since 1792 attempt to amend the Bill of Rights to provide that type of protection.

The guys in the powdered wigs had it about right in 1792, and there's good reason why in 200-plus years we have not amended the Bill of Rights, which is what this legislation would do. It would tamper with the Constitution. And the President has serious reservations about that, while at the same time believing that the flag as a symbol of this nation deserves not only protection but respect and love.

Q: So what does he think would appropriate, Mike?

MR. MCCURRY: Well, we -- there have been -- in the past have been proposals to enact legislation that would provide federal protection or address federal -- I guess, criminal statutes that would provide penalties for flag burning. But that's a separate matter for making it unconstitutional.

Q: Are you saying then that the CBO assumptions are not acceptable to the White House because you feel they're just not --

MR. MCCURRY: No, we just -- we just don't think they're right. We continue to think the OMB's got it right. And the OMB has got a track record now that says they've been more right than the CBO. And CBO is -- you know, CBO is moving; they've gotten a little more enlightenment. And with some more thinking and some work and some consultation with the fine economists at OMB, they might get further enlightened still. And they might come around to a point where they -- as they begin to look at what they think -- what we think the -- this is largely a question of what is the out-year performance of the economy and what happens, particularly in the sixth and seventh years. And we believe there is going to be some economic reward for balancing the budget and moving in that direction. In fact, that's almost abundantly clear from the performance of the markets now.

Q: -- November 19 agreement only hold them to consult with you, not necessarily agree with you --

MR. MCCURRY: It says that they will score the final agreement after consultation with the OMB and with private forecasting experts.

By the way, just -- at the end of last week, the Blue Chip revised its forecast. And again, it's more optimistic than either OMB or CBO, even the new and improved CBO. So we just think the new and improved CBO could get a little newer and a little more improved.

THE PRESS: Thank you.

END 2:12 P.M. EST