Press Briefing by Ari Fleischer

James S. Brady Press Briefing Room

12:35 P.M. EST

MR. FLEISCHER: Good afternoon and happy New Year to everybody. The President began his day with an intelligence briefing, followed by an FBI briefing. Then he had a series of policy briefings. And this afternoon, the President will look forward to a Cabinet meeting where the President will discuss with members of his Cabinet his agenda for the year. The President is going to focus on economic growth, making America a more compassionate country, and providing for the security of our nation abroad and on the homefront.

And with that, I'm more than happy to take your questions. Helen.

Q: At the earlier briefing, Ari, you said that the President deplored the taking of innocent lives. Does that apply to all innocent lives in the world? And I have a follow-up.

MR. FLEISCHER: I refer specifically to a horrible terrorist attack on Tel Aviv that killed scores and wounded hundreds. And the President, as he said in his statement yesterday, deplores in the strongest terms the taking of those lives and the wounding of those people, innocents in Israel.

Q: My follow-up is, why does he want to drop bombs on innocent Iraqis?

MR. FLEISCHER: Helen, the question is how to protect Americans, and our allies and friends --

Q: They're not attacking you.

MR. FLEISCHER: -- from a country --

Q: Have they laid the glove on you or on the United States, the Iraqis, in 11 years?

MR. FLEISCHER: I guess you have forgotten about the Americans who were killed in the first Gulf War as a result of Saddam Hussein's aggression then.

Q: Is this revenge, 11 years of revenge?

MR. FLEISCHER: Helen, I think you know very well that the President's position is that he wants to avert war, and that the President has asked the United Nations to go into Iraq to help with the purpose of averting war.

Q: Would the President attack innocent Iraqi lives?

MR. FLEISCHER: The President wants to make certain that he can defend our country, defend our interests, defend the region, and make certain that American lives are not lost.

Q: And he thinks they are a threat to us?

MR. FLEISCHER: There is no question that the President thinks that Iraq is a threat to the United States.

Q: The Iraqi people?

MR. FLEISCHER: The Iraqi people are represented by their government. If there was regime change, the Iraqi --

Q: So they will be vulnerable?

MR. FLEISCHER: Actually, the President has made it very clear that he has not dispute with the people of Iraq. That's why the American policy remains a policy of regime change. There is no question the people of Iraq --

Q: That's a decision for them to make, isn't it? It's their country.

MR. FLEISCHER: Helen, if you think that the people of Iraq are in a position to dictate who their dictator is, I don't think that has been what history has shown.

Q: I think many countries don't have -- people don't have the decision -- including us.

Q: Without going into details, Senator McCain says that he thinks that the President's economic plan should have some benefit for the middle class. From what we've seen of it, there doesn't appear to be much for the middle class, mainly geared toward higher-income Americans. Can you give us any idea -- if you don't want to go into details, give us an idea of what the percentage of the stimulus package will go to middle class Americans?

MR. FLEISCHER: The President very much looks forward to traveling to Chicago tomorrow to announce an economic growth plan for all Americans. The President's plan will encourage consumer spending, it will promote investment throughout our country and in the business community and small business, and it will also help the unemployed.

Specifically, under the President's proposal to provide tax relief, 92 million taxpayers will receive, on average, a tax cut of $1,083 in 2003; 46 million married couples would receive average tax cuts of $1,716; 34 million families with children would benefit from an average tax cut of $1,473; and 13 million elderly taxpayers would receive an average tax cut of $1,384. The final statistic I'm happy to give you is a typical family of four with two earners making $39,000 in income will receive a total of $1,100 in tax relief under the plan.

So the President's plan is a plan that helps all Americans. It helps middle income Americans, it helps the economy get going and growing again, and it's a plan the President looks forward to discussing.

Q: Are those figures from the plan that was passed last year or the one --

MR. FLEISCHER: No, this is from the plan the President will announce tomorrow.

Q: These figures are for the one announced tomorrow.

MR. FLEISCHER: Correct.

Q: What's the percentage of the amount of money, $600 billion or whatever it is that's going to go to pay for tax cuts, what's the percentage of that will go to middle class Americans?

MR. FLEISCHER: I'll try to have additional numbers tomorrow, Ron, but as you can see from the numbers, it's focused at the majority of American income taxpayers who are middle class.

Q: Just to follow up, on the $600 billion, we're looking at, according to the CBO numbers, I think, an expected deficit of $250 billion in fiscal year 2003. I understand the logic -- your logic that these tax cuts will lead to growth and that will do away with the budget deficits. But don't you have to couple that with spending cuts? And how is the administration going to do that, given the expense of homeland security and a possible war with Iraq?

MR. FLEISCHER: Well, the President's approach is that what creates surpluses in our country and in our government's coffers is growth, that without growth, there are deficits. In times of growth, we have surpluses. And that's what history has shown. And so the current deficit is caused as a result of the recession. We know the slowdown began in the summer of 2000, and then we went into recession as an economy in 2001. And we are now beginning to emerge from the recession.

The President wants to make certain that -- the people who suffer from the biggest deficits in our society are the people who don't have a job -- and he wants to put a plan in place to help give a boost to the economy, to give a boost to business investment, to give a boost to American taxpayers so that more jobs are created so that people can go about earning income and feeding their families.

That's where the President's focus is, and that's why this plan is addressed to giving a short-term boost to the economy, helping the unemployed, as well as putting the fundamentals in place for longer-term sustainable growth. And that, in the President's judgment, will help to return to an era of surpluses.

Q: Are you factoring in when you're doing these numbers, the cost of a possible war with Iraq?

MR. FLEISCHER: I'm talking about the tax cut itself. That's what you're question was addressed to.

Q: Right. And ultimately, you hope to not be in a deficit situation down the road, presumably, right?

MR. FLEISCHER: Well, clearly, anything dealing with Iraq is such a hypothetical, I'm not in a position to address what a potential cost could or could not be. But regardless of any decisions that are made on Iraq, the economy needs a boost. And that's why the President is going to go to Chicago tomorrow, separate and apart from anything dealing with Iraq, to announce a plan to give the economy a boost.

Q: You also call for cuts in spending, though, in addition to this.

MR. FLEISCHER: The President is going to continue to ask Congress to hold the line on spending. The President has announced a series of priorities which involve increases in spending for education, increases in spending for homeland security, to fight bioterrorism, to provide more money for first responders. All of those are the priorities that the President has announced that he'll continue to work with the Congress on.

And the Congress, as you know, is taking up the appropriation bill that was undone from the last Congress, in the next two weeks. They've already agreed on an aggregate cap of $750 bill for all domestic discretionary spending for the 11 remaining appropriation bills. So the President is encouraged by the fact that they have already agreed to a cap that the administration supports for the upcoming appropriation cycle for 2003.

Q: British Foreign Secretary Jack Straw said earlier today that the way he sees it, war with Iraq is less likely now than it was. Does the White House agree with that assessment?

MR. FLEISCHER: Well, the President, as he said over the holidays, remains very hopeful that peace can be pursued as a result of some of the decisions Saddam Hussein has yet to make. And this is about disarmament. And that's why the inspectors are there. They're going about their jobs and they're doing their work, and the President continues to hope that war can be averted.

Q: So the buildup that we're witnessing now, particularly the departure of the hospital ship Comfort today, is that posturing or is that serious?

MR. FLEISCHER: I think the President has been very serious. And hopefully, Saddam Hussein will get the message that the world community, through the United Nations, has called on Saddam Hussein to disarm, and as the President said, he will either disarm or the United States will lead a coalition to disarm him. That's a serious message. It's not a bluff. And perhaps as a result of it being such a serious message, Saddam Hussein will indeed get that message and disarm peacefully.

Q: Back on the stimulus package, how does any of the benefits that you outlined in the tax cuts, especially for the average American family making $39,000 a year, does any of that come from cutting taxes on dividends?

MR. FLEISCHER: The dividend tax -- first of all, I'm not going to comment on anything specific to what the President may or may not propose tomorrow. This is the President's announcement to make the substantive points about it. I can share with you some of the statistics and aggregate information about it.

Speaking generically on the question of a dividend cut, half of all American households nowadays, in our modern economy, own stock through either pensions, 401K plans, or other accounts. That means roughly 70 million Americans, a surge in Americans, own stock. More than 35 million Americans have dividend income. Of those 35 million Americans, more than 10 million are senior citizens.

And so the President believes very much that people need to have incentives for growth. He believes very much that we should help people to plan for a secure future. Obviously, senior citizens rely greatly on their income because they're no longer working; they rely greatly on their income that comes from things like their investments. And fortunately, for an increasing number of Americans, which does increase continually year after year, a larger and larger number do have income and resources coming from investments.

Q: Isn't a lot of that already tax-free, though, through 401ks and that kind of thing?

MR. FLEISCHER: The dividend income remains double-taxed.

Q: Not if you have your -- if you're investing through a 401k, though.

MR. FLEISCHER: The amount that you would have in there is diminished as a result of it already being taxed once as profits of the corporation are taxed. That's the source of the double-taxation on dividend income.

Q: But you aren't cutting that.

MR. FLEISCHER: I'm sorry? You'll have to show up at the speech tomorrow to find out what the President is cutting.

Q: So you dispute the notion that cutting taxes on dividends of these 35 million Americans with dividend income, that most of them are well-to-do or better off or well above the average, and what you're really doing is helping --

MR. FLEISCHER: When you look at the statistics, more than half the money from dividend taxation goes to seniors.

Q: Rich seniors.

MR. FLEISCHER: Well, if you believe that all 10 million seniors I just referenced are rich, then you believe that almost everybody in America is rich. The President would like to see a nation in which more and more people have opportunities to become successful. And that's one of the reasons he feels so strongly that it is wrong to tax people's future, that it is wrong to tax people's savings.

Q: Okay, one -- just one quickly on Iraq. You said this morning, the work of the inspectors needs to continue.

MR. FLEISCHER: Correct.

Q: For how long?

MR. FLEISCHER: The President has not put a period of time on there. The President wants to continue to work with the international community to make certain that the inspectors can do their job. And that requires the compliance of Iraq with the United Nations Security Council resolutions. Saddam Hussein's statements where he accused the weapons inspectors of being -- of carrying out pure intelligence work is an attempt to divert attention from the fact that Iraq still has not shown signs that it will disarm itself of weapons of mass destruction.

Q: You mentioned before that 35 million Americans receive dividend income. The proposal, as we understand it, is going to allocate something like $300 billion over 10 years, eliminating taxation of dividends. Why couldn't $300 billion be put to better use across a much wider array of Americans, rather than just those 35 million who receive dividend income? Never mind that only a small portion of them get a large amount.

MR. FLEISCHER: Well, the President looks forward to having many announcements that he'll be making. Not only what you're surmising the President will describe tomorrow on the dividend side of the ledger, but all income taxpayers pay income taxes. And the President looks forward to addressing a series of ideas tomorrow that will help lower taxes for all Americans, give a boost to the economy, give a boost to growth. But keep in mind what I said -- the President does not think it is right to tax savings and to penalize people who save, and the President does not think it is right to penalize people who plan for their future.

Q: Ari, do you consider this to be a stimulus plan? Or is that not a word you'd use? And how much of the cost of this will we see in the current year?

MR. FLEISCHER: Well, the President views this plan as doing two things: giving a short-term boost to the economy. The economy has grown, but it's not grown as much as the President would like. And for anybody who is unemployed, every little bit of growth in the economy means fewer people will be unemployed. And so in very human terms, every little bit of growth helps put somebody back at a job and puts food on a table for a family that is suffering or going without, having to make do by stretching budgets.

The President also wants to provide a more fundamental basis for long-term growth so the economy's fundamentals remain solid and we can have even more sustained growth at a higher rate for even longer periods of time. So the President views this as a way to accomplish both.

Q: Can you say what percent is up front, the first year?

MR. FLEISCHER: All that will be available tomorrow when the announcement is made.

Q: The IAEA passed a resolution demanding that North Korea abandon its nuclear weapons programs and giving North Korea one more chance. Do you think that that's a strong enough stand at this time?

MR. FLEISCHER: The President views the actions of the IAEA in Vienna today as the appropriate course of action. When you take a look at what they did and what they said today, they deplored in the strongest terms Korea's unilateral acts preventing international verification of their nonproliferation obligations. They called on Korea to cooperate urgently with the IAEA, allowing them to reestablish monitoring, and to verify all its nuclear material. The President views this as the appropriate course of action.

Q: But why is that? I mean, in light of the fact that North Korea has broken its agreements before, I mean, why not bring it before the U.N. Security Council at this time?

MR. FLEISCHER: Because what's happening here is you see the world coming together. And the nations that were involved in this decision today are very broad. It's not only China, Russia, South Korea, Japan and the United States that are troubled by North Korea's unilateralist actions. The nations that made up the board that voted in Vienna today include Australia, Malaysia, Iran, Cuba. It takes a lot of work to get condemned by Iran and Cuba, and North Korea has done it.

Q: A quick follow-up on the tax cut issue. The figures that you gave for the average tax cut size, is that just from the proposed dividend tax, or are there other tax cuts mixed up with that?

MR. FLEISCHER: That's from the entirety of the President's proposal tomorrow.

Q: So that's not just from --

MR. FLEISCHER: From every piece of the proposal the President will make tomorrow.

Q: It includes additional income tax cuts?

MR. FLEISCHER: Comprehensive.

Q: What percentage of the total stimulus is tax related, and what percentage is other sorts of things, such as aid to the states and extending unemployment benefits?

MR. FLEISCHER: The overwhelming amount is in the form of providing tax relief to give a boost to the economy and to individuals.

Q: If I could ask you on North Korea, there is a lot of talk, as you know, of some sort of agreement by which we would -- led by the South Koreans to try to get the U.S. back at the table with the North Koreans. If, in fact, North Korea takes some step to back away from its nuclear ambitions, is the U.S. prepared to sit down and have talks? And secondly, is the U.S. prepared to offer any sort of assurance about non-aggression and that sort of thing?

MR. FLEISCHER: Well, the President has repeatedly stated as plainly as can be that the United States has no plans to invade or to attack North Korea. So that's an often-made statement that should be seen for what it is. And the President believes North Korea knows that and they understand that. But we will continue to work with our allies on a common approach to the problem that North Korea has created through its unilateralist actions.

Q: Is there something the North Koreans can do that would prompt the U.S. to sit down and talk, which seems to be a key for them?

MR. FLEISCHER: Well, keep in mind, the United States has long supported South Korea's engagement with North Korea. When you take a look at what's happened, nations like Japan were engaging -- were beginning engagement with North Korea. And as a result of North Korea's actions, Japan examined what it was doing and has decided to proceed at a different pace. So various nations continue to have various levels of discussion with North Korea.

I want to point out that even while there were many conversations -- in North Korea, North Korea was still breaking its word. So I don't think the issue is whether or not North Korea is being talked to or not talked to. The issue is North Korea breaking its word. They have broken the word of the people they talked to, and they've broken their word with the people they don't talk to. The one constant is that North Korea breaks its word.

So from the American point of view, we very strongly support the efforts to discuss with North Korea, through our friends in South Korea and Japan; we always have. But the United States has made it clear that North Korea knows what it needs to do, and it needs to come back into international compliance, as the IAEA has urged them to do today in the strongest of terms.

Q: Is dialogue possible if they take some step backward on their nuclear program?

MR. FLEISCHER: They know what they need to do, and they need to come into international compliance.

Q: Ari, a couple of questions on the numbers you've been using today. When you -- first, when you were running down the list of average tax relief, you started with 92 million, $1083, right?

MR. FLEISCHER: Correct.

Q: Now, is that the overall number? And the ones that follow it, do they include a lot of duplication? For example, the married people in there --

MR. FLEISCHER: Clearly, there will be duplication in there. Anytime you talk about married couples or families with children, obviously there's duplication. And this is how the tax system works. These are the aggregate numbers that are available through tax researchers.

Q: The one clean number is the 92 million?

MR. FLEISCHER: Well, I'm not sure what you mean by clean. They're all accurate numbers.

Q: Well, not duplicate.

MR. FLEISCHER: They're all, I think, helpful ways of understanding the different phases that people are in their life and how they qualify for tax relief. We have a very complicated tax code. Whereas, you know under current law if you have children, you get a $600 child credit. So therefore, you want to take a look at families with children. But there are many people who pay income taxes who don't have children. So they're also a category that you want to take a look at.

But the overall number is that 92 million taxpayers would receive on average a tax cut of $1,083 in 2003, based on everything that the President will propose tomorrow.

Q: And then on this -- the question of the dividend income, the 35 million and the 10 million of those being seniors, there has been some work by people who are not supportive of this plan -- demographic work -- and they conclude that, in fact, these are -- the vast, vast majority of these people are wealthy people. Do you dispute that?

MR. FLEISCHER: Well, I think when you recognize that more than $10 million senior citizens receive dividend income --

Q: Yes, but they say that, like, only 6 percent of them are people -- are seniors in any kind of middle to lower income brackets. And in fact, there are -- like, over 90 percent of them are seniors who are living in our highest tax brackets, the wealthiest.

MR. FLEISCHER: Again, I think that you'll be able -- tomorrow when the President makes his proposals -- to see any data, and we'll be happy to compare the data. But there's no question that we have created a tax system in America where the lion's share of people who pay income taxes -- let me put it this way -- many individual Americans no longer pay income taxes. And so it's hard to give income tax relief to people who do not pay income taxes.

What happens in America today, under our complicated tax system, is that there are many millions of Americans who pay no income taxes, but pay Social Security taxes and pay Medicare taxes. In return, they receive Social Security and they receive Medicare. And that's why there's been some discussion about the payroll tax. Both those programs, of course, are dedicated and receive their fund from that dedicated tax. And any effort to cut those taxes would mean that the shortfall in those funds would only grow worse.

Q: But so you don't dispute the fact that the vast majority of these people in the dividend area, in fact, may be wealthy people?

MR. FLEISCHER: No, I do dispute that. I think very often the critics of tax relief describe everybody in America as rich, in an effort to stop tax relief. And I think that's been an old tactic by people who wanted to raise taxes on the American people in the first place.

Q: So who do you describe as rich?

Q: Ari, the President is going to propose additional tax cuts, in part in order to stimulate what he's described as a sluggish economy. While he's doing that, a number of states are contemplating tax increases to offset huge budget deficits. If they're forced to go that route, that would, to some degree, reverse the stimulative effects of the federal tax cuts. Is the President planning to do anything to help the states avoid that course of action?

MR. FLEISCHER: Well, again, it's not the President's business to tell states how to conduct their affairs. The President obviously believes that policies that reduce taxes create more growth, and that's the policy he's pursuing on the federal level. There are also a number of states that do not have shortfalls. And different states make different decisions on spending. As I indicated earlier, spending is a big contributor to budget deficits.

I'm not going to predict every course of action the President may or may not take. But clearly, states would benefit tremendously from a federal economy that is growing. The recession hurt everybody. It hurt the federal government, it hurt state governments. That's the problem with recessions, they hurt one and all. That's why the President believes the answer is in growth. Growth, of course, is good for the state governments.

Q: But there's been talk of specific aid to states to help them close some of the budget deficits that --

MR. FLEISCHER: As you know, I have not described any of the substance the President may or may not announce tomorrow. I would just suggest to you, some of the things I've been reading in the newspapers are incorrect about things the President may or may not propose.

Q: Like what? (Laughter.)

MR. FLEISCHER: If I told you, you wouldn't travel to Chicago and give Chicago an economic stimulus by spending all that lunch money there.

Q: Ari, many people have come to the conclusion that the stock market is still pretty much a bubble economy. We've seen how the bubble has burst over the last few years. Many people feel that that -- we have not seen the end of it. At the same time, you have, as was indicated, many of the states which are facing deficits looking to the federal government for aid, the only type of aid, of course, which would come from some form of tax revenues. How do you counter the criticism that you are helping through this tax relief to feed the stock market bubble at the cost of the funds which otherwise would be available for the necessary needs of the people suffering in the states and in the country as a whole by cutting the tax revenues?

MR. FLEISCHER: Well, again, the President begins this with the belief that the economy needs a boost. And if you take a look at the statements made by many private-sector economists, they agree. The economy is recovering from its recession. It is, indeed, growing. But the President, because he wants to make sure that people looking for work have more opportunity to find work, wants to put these proposals in place so the economy grows even faster. And his conclusion is the best way to do that is through the growth policies that low taxes create.

Now, I'm very well aware that there are many people who think taxing the American people once is not enough, and they want to tax the American people twice. And the President believes that we need to reduce taxes on working Americans, on the American people. And that's what he's going to focus on tomorrow.

Q: If I can follow on that. Traditionally, the successful program for coming out of a recession or a depression are those taken by Franklin Roosevelt during the 1930s, through a process of infrastructural developments, TVA, these kind of programs; or in the 1960s where we came out of the Korean War recession of '58, '59, Kennedy launched the space program which put the economy -- was also an infrastructural investment program. Has the President considered these type of things for bringing the physical economy back into motion and thereby helping business through infrastructural --

MR. FLEISCHER: Yes, I would just urge to be at the speech tomorrow and you'll see every detail the President is going to describe.

Q: Ari, in a few minutes, Senator Clinton is going to hold a news conference in which she's, once again, going to accuse the President of foot-dragging on extending unemployment insurance benefits. Any concern or regrets that the White House didn't do more to try and get some kind of UI extension --

MR. FLEISCHER: The President is concerned and he regrets very much that this was not able to get done last year. But finger-pointing is not going to get anybody's unemployment extension carried out into law. What's necessary is people to work well together. The reason it didn't happen was because it was too big a divide last year between the Senate approach and the House approach. And the President would very much like to work with people to bridge the divide and not point fingers at any one part of the divide.

Q: Can I -- I'm sorry, an unrelated follow-up. The GOP has announced that New York City will be the site of the 2004 convention. Is this a signal that the President believes the state of New York is winnable for him?

MR. FLEISCHER: Well, one, the committee worked very hard to make its decision about the holding of the convention. They did a tremendous amount of research and there were a number of leading cities that were considered. The President is very pleased and looks forward to go to going to New York. I think that others more expert in politics can tell you whether New York is winnable or not for the President, but the President would very much like to, if he decides to run for reelection, carry his campaign throughout the country. And obviously, the President has a great many new supporters in New York. And the President looks forward to continuing to talk about the policies that he thinks are good not only for New York, but for the entire nation. But New York, as well.

And my brother's apartment will be available to anybody who needs it. (Laughter.)

Q: Did he have to explain to his brother why New York over Florida?

MR. FLEISCHER: As you know, the decision was made by the Republican National Committee. It's not a decision that the President makes, and the President supported the decision they made. He looks forward to it.

Q: Isn't it the assumption with the stimulus that in order for it to have any short-term stimulative effect that people will actually have to go out and spend this money? Isn't it a real possibility that a lot of these people who are getting back $1,000, which is less than they owe on their credit cards, that they will actually have to -- that they will actually go out and spend that money, and not use it to just pay off debt?

MR. FLEISCHER: I think what you just heard, with all due respect, is exactly why some American people look at Washington and say Washington doesn't get it. A thousand dollars is a tremendous amount of money to most Americans. It's not just an amount of money on people's credit card -- that it's smaller than what's on their credit card. That's real money. That's a lot of real money to a lot of Americans. And the American people feel that it's their money and that they're over-taxed. And I think that anybody who hears that they may get $1,000 of their money back is very appreciative for it.

In terms of the mechanisms by which it can be delivered, I indicated to you that the figure would receive on average a tax cut in 2003, so the variety of means available to the federal government to make certain that money gets into people's hands so it can have a stimulative effect as quickly as possible.

Q: So you're not concerned that they're just going to use it to pay off debt? You're confident people -- when they get this money are going to go out on a spending spree?

MR. FLEISCHER: As I said, the President believes that the plan he's going to announce tomorrow is good for the economy and good for the country because it will do three things: One, it will encourage consumer spending; two, it will promote investment; and three, it will help the unemployed.

Q: Ari, many people are wondering why we keep 37,000 U.S. troops in South Korea where they've been for 50 years, and where South Koreans are reportedly demonstrating with placards reading "American troops out." And my question: Has the President given any consideration of transferring these troops elsewhere, rather than allowing the possibility of them being taken prisoner by a surprise attack by the 1 million-man North Korean army, possibly using nuclear weapons?

MR. FLEISCHER: Nothing like that has crossed my radar screen, that's been brought to my attention by anybody inside the White House. Obviously, there's a growing debate in print about this topic.

Q: Reuters reports a senior administration official, who didn't' want to be identified, saying that "we intend to continue supplying food to North Korea, even though that government is spending its money on nuclear development rather than food. And my question: Does the President, or do you remember any incident in World War II that our planes dropped food on either Nazi Germany or Imperial Japan?

MR. FLEISCHER: Let me tell you what our position is vis-a-vis food and North Korea. The United States does not condition food aid on political or security issues. We intend food aid to be viewed and seen and received as a humanitarian gesture of the people of the United States around the world. We intend to be responsive to the world food program's appeal for North Korea, as we have in past years. We still have concerns regarding monitoring and access in North Korea that need to be addresses. It remains very important for North Korea to make certain that the people who need the food receive the food.

Q: Did you recall any instance where we did this over Germany or Japan in the second world war?

MR. FLEISCHER: I wasn't alive then, Lester. So check --

Q: But you have a good memory.

MR. FLEISCHER: How can you have a memory if you weren't alive back then?

Q: In terms of unemployment, to follow up on Ken's question, is there any kind of outline of what kind of unemployment insurance the President will want -- a number of weeks, that kind of thing? And secondly, anything to specifically help out specific industries such as airlines, et cetera?

MR. FLEISCHER: Here's the President's approach on unemployment insurance. The President has called for unemployment insurance to be extended and to do so retroactively to December 28th, so that people who were cut off as a result of the impasse reached last year can get the help that they need. The President wants to make certain that it gets done.

And what has often happened in Washington is when people stake out positions, either one side or another, as happened last year, there's no room for compromise, no room for agreement, and therefore, people who need help don't get the help. The President sees his role in this as being the one who can bring the House and the Senate together to get it done. The problem is the House and the Senate have been feuding, and what they need is somebody who can step in quietly to help the unemployed to get it done.

And that's what the President is going to do. He's going to work very hard with the House and the Senate to help them to find a way to help the unemployed who got cut off and who deserve this help. The economy remains soft, and that's why the President thinks this is the right course to take.

Q: But any position does he have in terms of weeks?

MR. FLEISCHER: It's just as I said. The President is going to work with both to bring them together to get an agreement.

Q: If I could follow up to that, in a sense, the Democrats, who are unveiling another economic stimulus proposal today, do believe that extending unemployment benefits broadly for at least 26 more weeks is the best way to stimulate the economy immediately. Would the President agree with that? Is that the best way to immediately kick-start the economy?

MR. FLEISCHER: Well, I think the fact of the matter is that unemployment insurance needs to be seen as the President sees it, which is a compassionate way to help people who have lost income, who rely on the income to feed their families and to make ends meet in our society. But by any equation, unemployment insurance itself is a very small dollar amount and would not be seen as in and of itself a stimulative part. It's a compassionate part and a necessary part of an economic recovery program, and that's how the President views it.

Q: Ari, my recollection is, late last week the inspection team in Iraq indicated it hadn't come across anything to indicate a weapons program in Iraq yet. At what point does the United States provide the inspectors with the information they have so they can look in the places where these weapons are supposed to be?

MR. FLEISCHER: Well, the United States is providing them information and we continue to provide them information. We strongly support their efforts, it's in America's interests that they have the intelligence, the equipment and the personnel to do the job that the international community and the United Nations Security Council have asked them to do.

As the inspectors' capability to secure and use intelligence information has improved -- as, i.e., the size of their inspection team has grown, their experience has deepened, their capabilities such as additional helicopters has improved -- we'll be able to increase our level of support. And that's what you're seeing happen now.

Much also still depends on Iraq, Iraq's willingness to comply. Inspectors, even with the best of intelligence, met with a country like Iraq that won't comply, still can confound the inspectors' ability to do their job.

And one other piece, just on this issue is we continue to provide increased intelligence information to the inspectors. The inspectors are doing their very, very best. And the President is appreciative of those efforts. But bear in mind the environment in which they find themselves working. It is the Iraqis who prevent them from -- who have put in place the hurdles that mean that they -- as you knew in the past, bugging their rooms, monitoring their conversations. And so there is also the issue of what information Iraq is trying to get as a result of anything that could be conveyed. It's not as if it's just a matter between the United States and the inspectors. Iraq's failure to comply plays a role in this as well; otherwise information would end up in Iraq's hands.

Q: Can you prove that?

MR. FLEISCHER: Terry, I think you reported it yourselves throughout the '90s about the fact that the inspectors rooms were bugged and they don't have secure phones everywhere. That's why I said --

Q: It's based on historical record.

MR. FLEISCHER: Sure. And based on Iraqi patterns.

Q: And we have definite proof?

MR. FLEISCHER: And just as -- hold on a moment, Helen -- as I said, just as they're getting additional equipment, more resources, more information is and will be provided. After all, why wouldn't we provide it? We want them to have as much as they can to do their job.

Q: If I could follow just a second. They have to have their report in by the end of this month. And the administration is confident that they've provided them with enough information that they can have a full report on what the activities are in --

MR. FLEISCHER: Well, their ability to have a full report or not is going to be directly dependent on what Iraq does, not what the United States does. It's Iraq's compliance, it's Iraq's cooperation that determines whether the inspectors have the means to do their jobs.

Q: What means of comparison do you have though? If they've come back and say they haven't found anything, what are you compare it to, because there's no other --

MR. FLEISCHER: Well, let's wait and see what happens when they come back.

Q: Concerning the alternative stimulus package the Democrats are offering today, has the White House been briefed at all on that and any response to it?

MR. FLEISCHER: No, the White House has not received, to the best that I've been told, any advance information on what the Democratic Party or its leaders or its individuals will be offering this afternoon. We look forward to hearing about it, we look forward to seeing it. We hope that we will be able to work with Democrats in the Congress to provide a stimulus to the economy.

Obviously, when the President's tax plan was passed in 2001, a large number of Democrats joined with the President in supporting it. In fact, you can already see there are many Democrats -- I should say there are some Democrats -- who have already come out saying that they believe that some of the proposals that were enacted in 2001 should be accelerated this year. So we'll see. There may be some divisions among Democratic ranks. There may not be everybody in the Democrat Party who supports the President's tax approach. Nevertheless, the President will be on the hunt to look for Democrats who will work with him to give the economy a boost.

Q: Thank you. Some questions on the war effort. Is there any evidence that Iran played any role in support for the homicide bombings in Israel? And is the U.S. getting support from elements in Iran for efforts against Saddam Hussein?

MR. FLEISCHER: Nothing has been brought to my attention vis-a-vis the most recent attack in Israel concerning Iran, and I leave it at that.

Q: What about any help for the war effort?

MR. FLEISCHER: Nothing beyond anything that's been previously reported to you.

Q: One more. Do you expect the use of bases in Turkey and Saudi Arabia if the U.N. does not approve military action against Saddam Hussein?

MR. FLEISCHER: Anything dealing with operations or bases, as you know, you need to check with DOD.

Q: Thank you, and happy New Year.

MR. FLEISCHER: Happy New Year to you.

Q: Thank you. The President said that as Commander-in-Chief, he will get a smallpox vaccination. Has he gotten it yet? And did he have any adverse reaction? Is he -- if he hasn't gotten it, when will he?

MR. FLEISCHER: The President did receive it. He received it on the Saturday right before Christmas. I don't recall what was the exact date -- just prior for his departure for Camp David. And, no, the President has not had any adverse reactions. At least not to the smallpox vaccine. (Laughter.)

Q: What?

MR. FLEISCHER: Lester, he occasionally has adverse reactions to other things, Lester.

Q: Ari, I wanted to say something else. I wanted to say today is a very important day for Hispanics and especially for Hispanic children. It's the day, like Santa Clause and the Three Kings Day and it's the Santa Claus for all the Hispanic children all over. And so I thought I wanted to say happy Three Kings Day.

MR. FLEISCHER: Thank you.

Q: Ari, again, happy New Year. Only one question today. Indian Ambassador to the U.S. -- the New Year he had a very high praise for President Bush as fighting against terrorism. But he said there is more room that we can do, India and the United States can work together. And now also at the same time this week, I might be attending a short conference in Delhi where Indian Americans are gathering for security and terrorism conference, first ever called by the government of India, recognizing the Indian Americans in the U.S., their contributions to both countries. My question is how President Bush will address this conference if he's there, as far as Indian Americans are concerned, and any message on --

MR. FLEISCHER: Yes, I don't have anything on my schedule indicating that the President is attending that.

Q: And any message from him, let's say for this conference, as far as Indian Americans are concerned, together they're fighting against terrorism and supporting America and for the relations between the U.S. and India?

MR. FLEISCHER: The President's message to Indian Americans and to all Americans is that we are one nation. We are united in the war against terror. He appreciates the efforts of everybody in our broad community to help our country to combat and to win the war on terror. And he appreciates everybody who is serving in our Armed Forces and everybody who is doing their part in our police and everywhere else to keep America safe.

Q: Ari, just so I understand, are you saying that the President will not have a specific proposal tomorrow on unemployment insurance?

MR. FLEISCHER: No, I'm not telling what specific proposals he will or will not have. That will be the President's business to announce what's specific or not. I did say that the President's proposal tomorrow will focus on three things. And the third thing, if you recall I said, was there will be help for the unemployed. So I'm not telling you what he's going to announce, but I'm telling you that he will have something to say about helping the unemployed. I came very, very close. (Laughter.)

Q: And also the numbers that you gave earlier on benefits, those are -- you may have said, those are for next year, the various groups that would benefit from the tax cuts --

MR. FLEISCHER: Well, 2003 has arrived, so that's for this year.

Q: It's for this year, 2003.

Q: Can you just clear up one other point on those numbers? Is that money that taxpayers would have had coming to them in 2004, but moved up a year?

MR. FLEISCHER: It's a combination of factors. It's based on the totality of the President's plan.

Q: But how much of it was money that they would have --

MR. FLEISCHER: It includes some new proposals and it includes other proposals that have already found substantial bipartisan support in the Congress. And that could deal with calendar dates of those proposals.

Q: Do you know what percentage was already included in the tax cut that is being moved forward?

MR. FLEISCHER: No.

Q: Ari, as a result of the President's plan, do you have an estimate on how much you think the economy will grow by and how much the stock market will rise?

MR. FLEISCHER: I think it's impossible to predict any type of stock market performance based on announcements out of Washington. And I think private-sector forecasters may have information on growth. But as I indicated earlier, whatever the percentage growth is, if you're unemployed in America, every little bit helps to help people to find their jobs.

Q: Just one more question, do you have any plans yet for briefing tomorrow? And would it be here, in Chicago, or en route?

MR. FLEISCHER: Probably a little bit of both. En route to Chicago and then also we'll have some people stay back at the filing center to answer questions following the speech.

Q: Ari, other than Elliott Abrams, how many convicted criminals are on the White House staff?

MR. FLEISCHER: (Laughter.) You tell me, Russell. You seem to keep count.

Q: Can you give me a list of convicted criminals on the White House staff, other than Elliott Abrams?

MR. FLEISCHER: I'll go right to the convicted criminals division and ask them to turn -- (Laughter.)

Q: No, seriously -- why isn't being convicted of a criminal a disqualifier for being on the White House staff?

MR. FLEISCHER: Russell, this is an issue that you like to repeat every briefing. I refer you to the --

Q: But you don't answer --

MR. FLEISCHER: -- repeat I gave you the third time you asked it, which matched the second, which corresponded to the first.

Q: A question on Venezuela, Ari. Is the White House following the events of the last couple of weeks, especially the situation of the oil company where this strike has affected the market -- the international market of oil? And what do you think of the help that the new President of Brazil has given to President Chavez?

MR. FLEISCHER: Well, the President's message remains one of wanting to work for a peaceful resolution of the dispute in Venezuela that focuses on democracy and on listening to the people of Venezuela. The OAS efforts remain underway, and we continue to strongly support the OAS and their efforts.

Q: NBC News reported this morning that Saudi businessman Yassin Qadi, whom the Bush administration has designated a global terrorist, was actually a supporter of the President's and went to a Republican fundraiser and asked how he could contribute something like a half million dollars to the President's campaign. That fundraiser turned him down because it was illegal. But did -- does his support or past political support for the President cause you to question your decision to designate him as a global terrorist?

MR. FLEISCHER: This is the first I've heard of it, so I'll have to take a look at it.

THE PRESS: Thanks.

MR. FLEISCHER: Thank you.

END 1:20 P.M. EST