Obama Destroying Democracy

How the White House’s Deal With Big Pharma Undermines Democracy By Robert Reich|Aug 9, 2009, 5:30 PM|Author's Website

I’m a strong supporter of universal health insurance, and a fan of the Obama administration. But I’m appalled by the deal the White House has made with the pharmaceutical industry’s lobbying arm to buy their support. Last week, after being reported in the Los Angeles Times, the White House confirmed it has promised Big Pharma that any healthcare legislation will bar the government from using its huge purchasing power to negotiate lower drug prices. That’s basically the same deal George W. Bush struck in getting the Medicare drug benefit, and it’s proven a bonanza for the drug industry. A continuation will be an even larger bonanza, given all the Boomers who will be enrolling in Medicare over the next decade. And it will be a gold mine if the deal extends to Medicaid, which will be expanded under most versions of the healthcare bills now emerging from Congress, and to any public option that might be included. (We don’t know how far the deal extends beyond Medicare because its details haven’t been made public.) Let me remind you: Any bonanza for the drug industry means higher health-care costs for the rest of us, which is one reason why critics of the emerging healthcare plans, including the Congressional Budget Office, are so worried about their failure to adequately stem future healthcare costs. To be sure, as part of its deal with the White House, Big Pharma apparently has promised to cut future drug costs by $80 billion. But neither the industry nor the White House nor any congressional committee has announced exactly where the $80 billion in savings will show up nor how this portion of the deal will be enforced. In any event, you can bet that the bonanza Big Pharma will reap far exceeds $80 billion. Otherwise, why would it have agreed? In return, Big Pharma isn’t just supporting universal health care. It’s also spending a lots of money on TV and radio advertising in support. Sunday’s New York Times reports that Big Pharma has budgeted $150 million for TV ads promoting universal health insurance, starting this August (that’s more money than John McCain spent on TV advertising in last year’s presidential campaign), after having already spent a bundle through advocacy groups like Healthy Economies Now and Families USA. I want universal health insurance. And having had a front-row seat in 1994 when Big Pharma and the rest of the health-industry complex went to battle against it, I can tell you first hand how big and effective the onslaught can be. So I appreciate Big Pharma’s support this time around, and I like it that the industry is doing the reverse of what it did last time, and airing ads to persuade the public of the rightness of the White House’s effort.

But I also care about democracy, and the deal between Big Pharma and the White House frankly worries me. It’s bad enough when industry lobbyists extract concessions from members of Congress, which happens all the time. But when an industry gets secret concessions out of the White House in return for a promise to lend the industry’s support to a key piece of legislation, we’re in big trouble. That’s called extortion: An industry is using its capacity to threaten or prevent legislation as a means of altering that legislation for its own benefit. And it’s doing so at the highest reaches of our government, in the office of the President. When the industry support comes with an industry-sponsored ad campaign in favor of that legislation, the threat to democracy is even greater. Citizens end up paying for advertisements designed to persuade them that the legislation is in their interest. In this case, those payments come in the form of drug prices that will be higher than otherwise, stretching years into the future. I don’t want to be puritanical about all this. Politics is a rough game in which means and ends often get mixed and melded. Perhaps the White House deal with Big Pharma is a necessary step to get anything resembling universal health insurance. But if that’s the case, our democracy is in terrible shape. How soon until big industries and their Washington lobbyists have become so politically powerful that secret WhiteHouse-industry deals like this are prerequisites to any important legislation? When will it become standard practice that such deals come with hundreds of millions of dollars of industry-sponsored TV advertising designed to persuade the public that the legislation is in the public’s interest? (Any Democrats and progressives who might be reading this should ask themselves how they’ll feel when a Republican White House cuts such deals to advance its own legislative priorities.) We’re on a precarious road — and wherever it leads, it’s not toward democracy.

http://wallstreetpit.com/9303-the-deal-between-big-pharma-and-the-white-house

__________________ As reported in LA Time: White House deal with drug firms draws flak An $80-billion pact with the pharmaceutical industry intended to advance the administration's healthcare reform goals has instead created confusion and

discord.

By Tom Hamburger August 14, 2009

Reporting from Washington - An $80-billion deal with the drug industry that the White House thought would add momentum to its campaign for national healthcare reform has instead provoked a political tempest, frustrating and bewildering some of the president's most important allies. As complaints rolled in, the administration offered varying, sometimes contradictory explanations of the deal. "I've heard a lot of confusion about what was agreed to," said Rep. Henry A. Waxman (D-Beverly Hills), chairman of the House Energy and Commerce Committee, who wrote healthcare legislation that would impose more cost on the industry than that contained in the White House agreement. Under the deal, the Pharmaceutical Research and Manufacturers of America, or PhRMA, agreed to provide $80 billion in cost savings over 10 years. It also promised to promote healthcare reform in a multimillion-dollar ad campaign. In return, the White House agreed to consider the $80 billion as a cap on PhRMA's costs in the overhaul legislation. In addition, the White House agreed not to require rebates on sales of commonly prescribed drugs to patients enrolled jointly in Medicaid and Medicare. Separately, the White House told PhRMA executives that legislation the industry has long opposed to permit importation of cheaper drugs from Canada and Europe would probably not be necessary if a healthcare overhaul bill passed. The drug industry's chief lobbyist, PhRMA President W.J. "Billy" Tauzin, said the unwritten agreement was reached with Democratic Sen. Max Baucus of Montana, chairman of the Senate Finance Committee, and was closely monitored and "blessed" by the White House. Since the agreement was announced June 20 -- with President Obama saying, "We are at a turning point in America's journey toward healthcare reform" -- critics from the left and right have criticized the accord. Business and conservative interests are angry that one of their most important traditional allies -- PhRMA -- is now working with Democrats to build support for the president's plan. Liberals say Obama gave away too much to the industry. House Speaker Nancy Pelosi (D-San Francisco) said wryly that she thought if PhRMA agreed to $80 billion in savings, it was likely that real savings could probably be twice that amount. She suggested that the House might not honor the White House-PhRMA-Senate deal. Sen. Bernie Sanders (I-Vt.) said that when he read news accounts suggesting that the White House had told PhRMA it would not pursue

Canadian drug importation, he sought and received assurances from White House Chief of Staff Rahm Emanuel that there was no such deal. After that conversation, however, White House healthcare spokeswoman Linda Douglass confirmed to reporters that the White House had discussed the importation provision with worried drug company executives, telling them that "health insurance reform that lowers costs, including pharmaceutical costs, would probably make such legislation unnecessary." Sanders views that as a dubious assumption and says he intends to continue to pursue the provision. Waxman became concerned about other reports of what was in the agreement, in part because he feared it might undermine aspects of his healthcare bill. In an interview this week, he expressed alarm about Tauzin's claim -- since revised -that the deal included a promise not to have Medicare seek further drug price discounts. "It's ridiculous to have a program in which Medicare spends millions of dollars with drug companies as a customer and does not get a better deal on pharmaceutical prices," Waxman said. After first declining to comment, the White House now says the topic did not explicitly come up in discussions with the industry. "I think a lot of people in the room walked away with a different understanding of what was agreed to," Waxman said. Tauzin, a former congressman from Louisiana, believed that he had that there would not be negotiations over Medicare drug prices in Currently, government negotiations for lower prices are banned in Part D program under a "noninterference" clause that the industry several years ago.

an understanding the future. the Medicare lobbied for

This week, Tauzin's top aide at PhRMA, Ken Johnson, reiterated that view but said it was time to stop public discussions about whether it came up in the closed-door White House meetings. From the time the industry was first asked to participate in crafting healthcare overhaul legislation, Johnson said that Tauzin told everyone: "We'll do everything we can to help. But we will not support price controls, because they will hurt patients by drying up research and development needed to find new cures, and they will kill jobs in a very fragile economy." Tauzin thought the White House and others understood that meant there would be no change in the government prohibition on price negotiations for drugs. "We thought there was an underlying assumption on that key point," Johnson said. At this stage, he added, "it's counterproductive to keep talking about it."

http://www.latimes.com/news/nationworld/nation/la-na-health-pharma142009aug14,0,5896090.story

__________________ Obama gives powerful drug lobby a seat at healthcare table The pharmaceutical industry, once condemned by the president as a source of healthcare problems, has become a White House partner.

Billy Tauzin(BOUGHT BY

BIG MONEY)

Former Louisiana congressman Billy Tauzin is the pharmaceutical industry's chief lobbyist. (Susan Walsh / Associated Press / September 3, 2003)

By Tom Hamburger August 4, 2009

Reporting from Washington - As a candidate for president, Barack Obama lambasted drug companies and the influence they wielded in Washington. He even ran a television ad targeting the industry's chief lobbyist, former Louisiana congressman Billy Tauzin, and the role Tauzin played in preventing Medicare from negotiating for lower drug prices. Since the election, Tauzin has morphed into the president's partner. He has been invited to the White House half a dozen times in recent months. There, he says, he eventually secured an agreement that the administration wouldn't try to overturn the very Medicare drug policy that Obama had criticized on the campaign trail. "The White House blessed it," Tauzin said. At the same time, Tauzin said the industry he represents was offering political and financial support for the president's healthcare initiative, a remarkable shift considering that drug companies vigorously opposed a national overhaul the last time it was proposed, when Bill Clinton was president. If a package passes Congress, the pharmaceutical industry has pledged $80 billion in cost savings over 10 years to help pay for it. For his part, Tauzin said he had not only received the White House pledge to forswear Medicare drug price

bargaining, but also a separate promise not to pursue another proposal Obama supported during the campaign: importing cheaper drugs from Canada or Europe. Both proposals could cost the industry billions, undermine its ability to develop new cures and, in the case of imports, possibly compromise safety, industry officials contend. Much of the bargaining took place in July at a meeting in the Roosevelt Room, just off the Oval Office, a person familiar with the discussions said. In attendance were Tauzin, several industry chief executives -- including those from Abbott Laboratories, Merck and Pfizer -- White House Chief of Staff Rahm Emanuel and White House aides. White House officials acknowledge discussing the importation question with Tauzin but had no comment on whether there was an agreement to block future Medicare price negotiations. Yet everyone agrees that drug companies -- Washington's leading source of lobbyist money -- now have "a seat at the table" at the White House and on Capitol Hill as healthcare legislation works its way through Congress. If nothing else, a popular president who six months ago criticized drug companies for greed now praises their work on behalf of the public good. "I think the pharmaceutical industry has been quite constructive in this debate," Obama told a small group of regional reporters last week. "And the savings that they've put on the table are real and significant and are appreciated." The pharmaceutical industry's political transformation provides an example of Obama's approach to achieving his healthcare goals, which includes negotiation and compromise, even with those he and his allies have painted as a source of the problem. The benefits to the White House go beyond budget savings. Tauzin's trade association, the Pharmaceutical Research and Manufacturers of America, or PhRMA, is helping to underwrite a multimillion-dollar TV advertising campaign touting comprehensive healthcare legislation. One ad resurrects Harry and Louise, the fictional couple whose caustic kitchentable comments in ads sponsored by the health insurance industry helped sink Clinton's plan in 1994. This time, with the drug companies paying the bill, Harry and Louise have changed their view. "A little more cooperation, a little less politics, and we can get the job done this time," Louise says in the commercial, a joint project of PhRMA and Families USA, a health reform advocacy group with which the drug industry used to be at odds. In an interview, Tauzin said he carefully negotiated his agreements with the White House, offering the $80-billion discount program in return for assurances that there would be no government price-setting in Medicare Part D, the drug program

for seniors. It was important, he said, to block the threat of Medicare price negotiations, which he called tantamount to price-setting and a threat to the industry. In addition, Tauzin said the industry asked the administration not to allow the import of cheaper drugs because of safety concerns. Linda Douglass, a White House spokeswoman, said that when drug company executives brought up the import plan, they were told that the administration believed that health reform would reduce drug prices so significantly that the legislation once backed by Obama would "not be necessary." It's far too early to tell whether the pharmaceutical industry's decision to back Obama's health initiative will pay off. "Since Obama came into office, the drug industry has received everything it wants, domestic and foreign," said James Love, who leads an international nonprofit promoting low-cost distribution of drugs to fight the world's most devastating diseases. "Yes, the drug companies are getting tremendous sweetheart deals" from Obama, said Lawrence Jacobs, a University of Minnesota political scientist who studies the history of health reform and other major social and economic changes. "But these bargains are the price of admission for achieving substantial reform." Tauzin, a Democrat who helped found the conservative Blue Dog coalition in the House before switching to the Republican Party in 1995, was chairman of the House committee that helped shepherd Medicare drug legislation through Congress, including the provision that the government not interfere with price negotiations. The pharmaceutical industry, once condemned by the president as a source of healthcare problems, has become a White House partner. Tauzin said PhRMA's support for Obama's initiative represented no shift in the industry's basic philosophy. "Our principles haven't changed, but we are looking at a different situation today," he said. "There's an opportunity now to get a health bill passed that doesn't provide for government control of healthcare. We are participating as fully as we can now because we see an economic and moral imperative to do something when so many millions of people don't have access to healthcare." The prescription for PhRMA's partisan activities has changed recently along with the political landscape. In 2005 and 2006, during Tauzin's first two years at PhRMA, just a third of the industry's $19.5 million in campaign donations went to Democrats. Tauzin came into

the organization, he said, determined to make it more bipartisan and more generally appealing to the public. This year, for the first time in two decades, Democrats have so far picked up more of the industry's campaign cash -- 54% -- than Republicans, according to the Center for Responsive Politics. And PhRMA, a reliable backer of conservative candidates and causes in the past, has shifted allegiance in other ways, including joining labor leaders in a highpriced ad campaign to build grass-roots support for Obama's health plan. Besides the new "Harry and Louise" ads, the industry is underwriting commercials that praise potentially vulnerable Democratic incumbents. Other things haven't changed, including the industry's unrivaled investment in lobbying. In just the last four months, the industry has spent $68 million on lobbying in Washington, assuring its continued standing atop the nation's lobbyist spending list. Sen. Bernie Sanders (I-Vt.), a champion of importing drugs from Canada and reducing the cost of pharmaceuticals, professes continued suspicion of the industry, including its deals with the White House. "The drug companies form the most powerful lobby in Washington," he said. "They never lose." http://www.latimes.com/features/health/la-na-healthcare-pharma42009aug04,0,3660985.story?page=2

__________________

Obama's Biggest Health Reform BlunderHow Big Pharma's Billy Tauzin conned the White House out of $76 billion. By Timothy Noah, Thursday, Aug. 6, 2009 Billy Tauzin, president of the Pharmaceutical Research and Manufacturers of America, has cut a secret deal on health reform with the White House. Tauzin told Tom Hamburger of the Los Angeles Times that in exchange for the much-touted $80 billion in savings that PhRMA volunteered in June to help cover the uninsured and

reduce drug prices for some senior citizens, the White House had promised to block any congressional effort to allow the government to negotiate Medicare drug prices. Tauzin is from Louisiana, where tall tales grow like weeds, and at first his assertion seemed wildly implausible. But two days after the L.A. Times scoop, the New York Times got White House confirmation. "The president encouraged this approach," White House deputy chief of staff Jim Messina said in an e-mail. "He wanted to bring all parties to the table to discuss health insurance reform." President Obama's handshake with Tauzin is easily the dumbest mistake he's made in shepherding health reform through Congress. Tauzin revealed the deal out of pique that the House energy and commerce committee, in breaking its logjam with Blue Dog Democrats, amended the health reform bill to allow Medicare drug negotiation. "Who is ever going to go into a deal with the White House again if they don't keep their word?" he sputtered. "You are just going to duke it out instead." It's pretty rich that Tauzin should be lecturing anybody about steadfastness. He entered the House as a Democrat but jumped to the Republican Party in 1995. He told the Baton Rouge Advocate in June 2003 that he would "complete my term and run for re-election," but in December 2004 he quit the House to become president of PhRMA, a job he reportedly leveraged with a somewhat less lucrative offer to become chairman of the Motion Picture Association of America. Tauzin is legally bound by House ethics rules not to make with the intent to influence, any communication to or appearance before any officer or employee of any department, agency, court, or court-martial of the United States or the District of Columbia, on behalf of any other person (except the United States or the District of Columbia) in connection with a particular matter … in which the person participated personally and substantially as such officer or employee, and … which involved a specific party or specific parties at the time of such participation. Yet Tauzin, six years prior to securing the White House's promise not to let the government negotiate Medicare drug prices, was instrumental in writing the 2003 bill that created a Medicare drug benefit … but barred the government from negotiating drug prices! (At the time, Tauzin was chairman of the House energy and commerce committee.) Unlike some other House ethics rules, the prohibition against lobbying on anything "in which the person participated personally and substantially" is supposed to be permanent. It would seem not to be worth the paper it's written on. Why is the White House's PhRMA deal a bad bargain? Because in securing $80 billion in savings over 10 years, the White House is forgoing what could be as much as $156 billion over the same time period. That's what a 2008 report by energy and commerce's investigations subcommittee calculated to be the savings if Medicare were permitted to buy drugs at the same rates negotiated by the (much smaller) Medicaid program.

So Tauzin conned the White House out of $76 billion. Granted, the provision agreed to by energy and commerce would raise nowhere near that amount, largely because it prohibits Medicare from creating a drug formulary to deny coverage to drugs it deems ineffective or cost-inefficient. (Instead, private insurers who administer the drug benefit establish their own formularies.) In striking the bargain with PhRMA, Obama broke a not-insignificant campaign promise ("Obama will repeal the ban on direct negotiation with drug companies and use the resulting savings … to further invest in improving health care coverage and quality"). Candidate Obama, citing a paper by Roger Hickey, Jeff Cruz, and Dean Baker of the Institute for America's Future, put the savings at $30 billion a year, which over a decade would be roughly twice the $156 billion savings envisioned by the energy and commerce committee. (Hickey, Cruz, and Baker proposed matching not Medicaid drug prices but those negotiated by the more straightforwardly socialist Veterans Administration.) By this reckoning, Tauzin swindled not $76 billion from President Obama but $220 billion. That's nearly half what the House health reform bill expects to raise with its proposed surtax on incomes above $350,000! It's often noted that Obama's strategy on health reform is the opposite of Hillary Clinton's in 1994. (See, for example, "The Ghosts of Clintoncare" by Ezra Klein in the Washington Post.) Instead of hiring Ira Magaziner to draft a bill and then shoving that bill down Congress' throat, the Obama White House is letting Congress write the health reform bill. This strikes me as a reasonably shrewd strategy. But when you very deliberately aren't controlling the legislative process, it doesn't make a lot of sense to cut deals with special interests about what that legislation will contain. Health reform has a thousand interconnected parts. Give in on something here, and you have to make alterations on something there. That's why Senate finance Chairman Max Baucus keeps saying, "Everything is on the table" (even though that isn't strictly true). Obama has taken tens and perhaps hundreds of billions of dollars off the table by ruling out an elementary cost-saving measure whose rejection by the Republican congressional majority back in 2003 is an ongoing scandal. What did he get in return? The hope that other sectors in the health care industry would get onboard with reform. But health reform's principal target—the insurance companies—not only refuses to endorse the creation of a public-option government health insurance program, the one essential component to major health care reform; it refuses even to stop hunting for trivial reasons to cancel insurance for policyholders after they develop expensive-to-treat illnesses. (See "Why You Can't Trust Your Health Insurer.") Mr. President, you've been played for a sucker. [Update, 7:40 p.m.: Asked at today's White House briefing about the contradiction between the Tauzin deal and what the energy and commerce committee passed, Press Secretary Robert Gibbs said: "I do think—look, I think the goal of all of those at

the table, particularly the president, is to see costs come down and to see progress made on that. But I don't want to get ahead of negotiating what might be bill differences." This at least allows for the possibility that the White House will renege on its ill-advised bargain with PhRMA.] [Update, Aug. 7: The White House has graduated to making Clintonian-sounding distinctions about the meaning of its bargain with PhRMA. Bloomburg's James Rowley reports that White House deputy chief of staff Jim Messina told a meeting of Senate Democrats yesterday that the Tauzin deal (what follows is Rowley's paraphrase) "didn't require Obama to discourage Congress from requiring price negotiations for the Medicare program." Huh? The bottom line remains that it would be better for the White House to welsh than to honor this atrocious deal.] [Update, Aug. 8: "Obama Reverses Stand on Drug-Industry Deal" reads a headline in today's New York Times. The story, alas, doesn't support that conclusion. "White House officials," reports the Times's David Kirkpatrick, "said Friday that Mr. Messina, the deputy chief of staff who sent the e-mail message, had not intended to confirm that the deal ruled out price negotiations." Possibly not. But the White House saying it did not intend to confirm something sidesteps the question of whether that something was true. Meanwhile PhRMA, Kirkpatrick reports, has stopped complaining about being doublecrossed by the House energy and commerce vote, "perhaps satisfied that the White House had at least ruled out the price rebates in the House bill." Does that mean the White House will take rebates out of the House bill? If so, that isn't much of a reversal; drug rebates aren't in the Senate health committee bill. (The Senate finance bill was still being written when the Senate broke yesterday for recess.) Also, Kirkpatrick's use of the word "perhaps" is difficult to parse. Is the Times reporter relating his own speculation, speculation coming out of the White House or PhRMA, or something a White House or PhRMA source told him off the record ("You can report this but make it sound like your own speculation")? White House Press Secretary Robert Gibbs, when asked about the Tauzin deal once again on Aug. 7, contiued to dodge the question. But he did say, "[W]e feel like $80 billion [in savings from the drug industry] is an appropriate amount, and I think the—I don't have the statistic in front of me, but I think the House bill has $85 billion in it. So I would argue that we're all in the same ballpark." Translation: "Never mind whether there's a deal to keep PhRMA's health-reform contribution to its promised $80 billion. All we want is $80 billion!" That doesn't sound like to me like the White House is reversing its stand. In today's radio address, Obama said, "Let me start by dispelling the outlandish rumors that that reform will promote euthanasia, cut Medicaid or bring about a government takeover of health care. That's simply not true." Missing from Obama's litany was the accusation that the White House cut a secret deal with the pharmaceutical industry. Instead, Obama repeated his familiar refrain, "Drug companies have agreed to make prescription drugs more affordable for seniors." Yes, we know. But what will they get in return?]

http://www.slate.com/id/2224621/

_____________________ NOW, few words from Gibb the LIAR for the aka +++++

LIAR in CHIEF

Barry Soetoro/Obama

THE WHITE HOUSE Office of the Press Secretary For Immediate Release August 6, 2009 PRESS BRIEFING BY PRESS SECRETARY ROBERT GIBBS James S. Brady Press Briefing Room

MR. GIBBS:

Good afternoon.

Ms. Levin.

Q Can you tell us the current plans and the thinking about getting President Obama together with President Clinton about North Korea? MR. GIBBS: We talked a little bit about this this morning. I know when the President -- let me make sure I'm specific -- when President Obama spoke yesterday morning with President Clinton, President Obama expressed his desire to get together fairly soon so the two men would have a chance to talk. As we have described to you all, the members of the NSC briefed former President Clinton prior to his trip. There will -- there has been and will continue to be a formal debriefing process now on the back end of that trip. There were some communications between the former President and the NSC yesterday, and that will continue over the next several days. I know they want to get together. Right now we're just trying to coordinate the schedules of two rather busy men. Q So is it fair to say that the NSC staff will talk to President Clinton and gather all the information that needs to be gathered, and that after that point, then the two Presidents will get together and discuss whatever it is or -MR. GIBBS: I don't have -- there's nothing currently scheduled. I would put these in many ways on two different tracks. They could certainly happen simultaneously. Obviously it's our desire to get whatever impressions President Clinton has. Q

And is this happening in person, on the phone?

MR. GIBBS: Last night it happened on the phone. will happen in person or not.

I don't know if future ones

I will say this, and obviously I was not part of the debriefing last night, but if you look at where historically President Clinton has been -- and I don't have any knowledge of what was debriefed or talked about, but I can only imagine that given his history on this issue, that he would strongly encourage the North Koreans to set aside their renewed pursuit of a nuclear weapon, come back and live by the agreements that they've been party to before, and to encourage them to understand that the acquisition of those weapons is not going to bring international prestige but further isolation based on his history on these issues. Q Just one more quick one on this. Do you guys have any indications, whether through the start of this debriefing with President Clinton or other channels, that North Koreans want anything in return for the pardon? MR. GIBBS: anything.

I haven't been party to these negotiations and I haven't heard of

Yes, sir. Q Robert, can you give us an idea as to the administration's timetable on reforming Fannie Mae and Freddie Mac, and any details on the way you're leaning? MR. GIBBS: Obviously as part of financial regulatory reform, GSE reform is going to be part of that. Obviously these were mentioned in the white paper that the administration released on regulatory reform -- there was a discussion of this on pages 41 and 42 of that reform. The story out today is light-years ahead of any decision-making process here. There's no meeting that's scheduled, and it's safe to say that many senior administration economic officials learned of this proposal some time this morning at the foot of their driveway. Q

So does that mean there's not a proposal?

MR. GIBBS: Well, staff are certainly -- as I've said through financial regulatory reform, staff are aware of the problem and working on it as a part of financial regulatory reform. I think to assume that either this is at a point of even a decision by senior economic officials, let alone anybody that occupies the Oval Office, is way, way ahead of itself. Q reform?

Is there a time frame in mind specifically for those two companies for

MR. GIBBS: I don't have a specific timetable. I can certainly look into that. Again, I know it's certainly part of a broader financial regulatory reform, and obviously both play an important role in the President's home loan modification program and overall housing policy. Yes, sir. Q Some foreign policy experts have wondered about the precedence set by President Clinton's trip to North Korea, the humanitarian mission, as you guys describe it -- about whether or not it would mean that other rogue states making a similar request in a similar situation -- and it's not too hard to see a fairly close parallel with what's going on in Iran right now -- whether that would now merit a visit from somebody of President Clinton's prestige. And I was wondering, A, if that was a concern before you guys signed off on this trip, and B, what your response is to that criticism. MR. GIBBS:

Well, look, I've described this and others as separate from the

concerns that we had about North Korea, its nuclear policy, its provocative international actions. And I think our policy to ensure that U.N. Security Council regulations are implemented is no different today than it was Monday before President Clinton left. This was a private humanitarian mission with only the goal of bringing back two journalists to safety. I don't read a lot of precedent into it. I know the President is enormously thankful and grateful for the work that President Clinton did on this, and his willingness to undertake such an important mission. But that's what this was about. I think the administration has taken very strong action relating to and responding to the actions of the North Koreans. I think what happened in the U.N. Security Council, the unanimous passage of those resolutions and the impact that they have already had on ensuring that the North Koreans are unable to move weapons out of their country, quite frankly is the best response for anybody's criticism. Q And then Senator Cornyn sent you guys a letter expressing concern about the tips at whitehouse.gov and what that meant, what exactly you were seeking in terms of disinformation. I got a statement from Linda Douglass earlier, and I assume that, just from what she suggests in her response, you guys are not going to be saving the names or the IP addresses, anything along those lines -MR. GIBBS: Nobody is collecting names. This was -- we have seen and as I've discussed from this podium, a lot of misinformation around health care reform, some of it I think spread purposefully. We have used on many occasions the Web site to debunk things that are simply not true. We ask people if they have questions about health care reform and about what they're hearing about its effects on them to let us know and we provide them information to show that that wasn't true. But nobody is collecting names. Q But in -- is it misinformation that in 2003, President Obama, then a state senator, supported a single-payer health care system? MR. GIBBS: I think, again, if you look at the statements that have been put up on other Internet sites that splice a bunch of stuff together, and I think if you look at the answers that state senator, U.S. senator, and President Barack Obama have given on that -- I think we hope to provide people with a full and accurate picture, not something that only the words opponents want might to see. Yes, sir. Q Thanks, Robert. The President meeting with the six senators, bipartisan-group senators -- what was his message to them and what is the sort of expectation? MR. GIBBS: The President invited the group to come to the White House today to provide an update and a status report of sorts on their negotiations amongst themselves in the committee. The President's message to them is to continue to work and find consensus on an issue that we know they've been working hard on and is very important to the American people. The President wants them to continue to work and make progress, and wanted to hear directly from them on where they were. It wasn't a negotiating session. The meeting just recently broke up and I don't have -- I have not had a chance to talk to the President since the conclusion of that meeting. Q

So there's no sense as to how close they are?

MR. GIBBS:

I don't have one yet, no.

Q And in terms of -- I know in an interview yesterday, the President suggested that -- it appeared that he's losing patience when it comes to bipartisanship and getting the kind of bill that can be supported by Republicans and Democrats. Is he losing patience pushing bipartisanship in saying that he might have to forego that? MR. GIBBS: Well, no. I think the President's actions today, the invitation that came from him to a bipartisan group of senators to come and discuss where they were on health care denotes that he's serious about getting something through Congress and he's serious about doing so in a way that brings about a large coalition. I'd say, Dan, that if you look at even some of the Finance Committee statements from earlier in the year, they had wanted to come to some agreement in June. Obviously we've reached warmer months than June without that. So the President simply wanted an update. I will say this: I think the President is very serious about getting something done -- I know he is -- about getting something done this year. That's been his goal all along. Q

With or without Republicans?

MR. GIBBS:

With those that want to see health care reform.

Yes, ma'am. Q Are you saying that the President doesn’t see any potentiality for improving relations with this North Korean move? How come we don't know anything that led up to it, if there's any quid pro quo or anything else? We're so in the dark. MR. GIBBS: Well, look, there was no quid pro quo. I think we, on a call, went through in fairly exhaustive detail, step by step, how the invitation came for President Clinton to go when we were notified about that. Again, Helen, whether or not -Q You let them make all the announcements, show all the pictures. took total control of -MR. GIBBS: Q

They

Well, I didn't --

Not you, per se.

(Laughter.)

MR. GIBBS: I was going to say, I have less control over the North Korean television cameras than even I had hoped. Q

You, representing the United States, that is.

MR. GIBBS: Right, exactly. No, look, obviously we took great care while this was going on to ensure that our ultimate goal was success. Obviously the President and the team here will have a chance to hear directly from President Clinton about what he heard and saw. We're obviously anxious to get that. But I'd say again, Helen, I think what is crucially important to understand -whether or not North Korea wants a better relationship we'll certainly find out -they have the power, though, to change that relationship. They have the power to come back to the set of agreements that they entered into to denuclearize the

Korean Peninsula. That's our goal. We think that's the international community's goal based on their reaction to some of the provocative, if not outlandish, statements and actions that the North Koreans have taken. They have the ability and the power to do that. We certainly, regardless of this mission or not, we certainly hope that they'll come back to implementing the agreements that they entered into, while at the same time we will continue to take the steps necessary to enforce Security Council resolutions to ensure the weapons of mass destruction are not spread by the North Koreans. Q

Well, in terms of -- just one more question --

MR. GIBBS:

Sure.

Q -- of the policy, are we only against people who might get the weapons and not against those who have already gotten them and could use them? MR. GIBBS: Well, look, I think the spread of -- the President has said numerous times, the spread of a weapon of mass destruction, the spread of nuclear materiel and nuclear weapons is our number-one worry and cause of concern for national security. He has outlined a series of very aggressive steps as it relates to nuclear proliferation that we will continue to work toward and implement over the course of the next many months and years. Obviously we have great concern in a nation that would try to acquire, as we would a group trying to get a hold of a weapon inside of a nation that already has those weapons. Chip. Q Back on health care. You said the President doesn’t want to draw any lines in the sand on public option, but doesn’t that put Democrats in a quandary when they go home and they hold town hall meetings and they talk to constituents and they say, where do you stand on a public option -- they don't know what to say because they don't know where it's going to end up, they don't know what the President is going to ultimately -- if they say, yes, I support a public option, and they come back in the fall and it's not on the table anymore, then they've put themselves out on a limb for no reason. Aren’t you making things politically difficult for Democrats by not saying, yes, he wants a public option in there, period? MR. GIBBS: Again, we've outlined our principles. What's most important here is, as I've said here a bunch, we get choice and competition in what can tend to be a very restricted market for private insurance. I have not noticed down the street a shortage of personal opinion, one way or the other. So I think if somebody is asked about where they sit or stand on that issue, I have no doubt that each member up there has their own opinion. Q Well, they do, but for Blue Dogs, for example, it's a very delicate issue and they're not going to want to go out on a limb on a public option and then have that limb sawed off when they come back in the fall. MR. GIBBS: continue to make explain to every for every single

What I think is important, Chip, is if we continue to work and progress, we'll be able to go home by the end of the year and constituent the steps that were taken to get health care reform American. I think that's the most important discussion. We want

to see progress continue to move forward. That's why the President had the meeting here today, to get an update on where the Senate Finance Committee is. Look, there are a lot of different opinions on a lot of different issues and we'll continue to work through those as we get closer to health care reform. Q Quickly on -- do you have anything on the unemployment benefits numbers that came out today? And in addition to that, you touched on this on Monday, but what is going on behind the scenes? How much work is being done and how dedicated is this White House to extending unemployment -MR. GIBBS: Well, let me take the questions a little separately here. I mean, obviously -- look, I think as you see a lot of these statistics that come out each and every week, you can see positive signs and you can see continued signs for concern. Four-week average for first-time unemployment claims is down less than the market expected in first-time weekly claims. Again, we look at -- I think what's important to do also is look at some of that four-week average because that smoothes out particularly some of the seasonal differences. At the same time, you continue to have a growing number and record number receiving those long-term benefits. That brings us to your second question, which is over the course of between now and the end of the year, you are going to have different people, based on the length of time on each of the receiving unemployment insurance, you will have people exhaust that benefit. We're very concerned about that. Obviously that's been a -- was a big part of the Recovery Act and something that we want to see, and I think there's bipartisan support to see, continued. At the same time, we're also looking at working to continue benefits that were extended as part of the recovery plan itself. Two different -- both kind of a short-term and more of a medium- to long-term issue that the administration is concerned about and wants to work with Congress to ensure that we are continuing to help those that are victims of a struggling economy who are looking and actively participating in a job search to help support their families. And we're definitely committed to that. Q

Is passing that a top priority?

MR. GIBBS:

Yes.

Yes, sir. Q The President has said that when all is said and done he expects that the unemployment rate will top 10 percent. Does he still believe that? MR. GIBBS: Yes. Whether that happens tomorrow, I don't know. Again, for my friends in the Council of Economic Advisers, I don't know anything on the specific numbers. I expect we'll see several hundred thousand jobs lost. I expect that we'll see an uptick in that unemployment rate come tomorrow. You had a follow-up? Q Your economic advisors who had fanned out on Sunday across the talk shows, there was talk that the economic growth rate needs to be around 2.5 percent in order to see some of this -- these same jobs being built back into the economy. Is that the operating threshold that you're looking at? MR. GIBBS:

Well, I think what they were talking about in some ways were sort

of historical mathematical conclusions. I know there have been articles, as well. You've got to see a growth rate at a certain level, and quite frankly, you've got to see job creation point at a certain level in order simply to maintain an unemployment rate. If it were to -- let's say it were to get to 9.6 or 9.7 -- in order to see that happening again, month after month, you'd actually have to be continuing to create jobs. That's why I think the President believes this will creep up and soon hit and exceed 10. We are obviously working to do all that we can to create growth, to lay the foundation for long-term job creation in order to see jobs created and the unemployment rate come down. Q And a follow on health care. confused. MR. GIBBS:

So am I.

I'm new around here so I get a little

Go ahead.

Q Is the President open to the possibility of utilizing the processes in place in getting 50 votes for his health care plan instead of 60, if that's what's necessary? MR. GIBBS: Obviously the President meeting with Democrats and Republicans means the President is interested in doing this, first and foremost, through regular order. Obviously the option for reconciliation was contained in the budget agreement, and we'd certainly crossed that bridge when we got to it. Q So that's hanging out there like a sword of Damocles over these Senate negotiations. MR. GIBBS: there.

Unclear how it's hanging -- (laughter) -- but it's certainly out

Q And the President is open to a bill that does not ultimately include a public option? MR. GIBBS: The President is open to a bill that increases choice and competition. I've got to figure out how many times you guys have asked and I have said -- it's great discipline on both of our parts. Yes, ma'am. Q You said that this meeting today is not a negotiation. But -- and he is going to get a status update presumably on all the various issues. Is he planning on weighing -- did he plan on weighing in on his views on any of the issues that are on the table? MR. GIBBS: Well, again, I don't have a debrief from him or the team on what happened exactly in the meeting. I know that -- I have no doubt that they discussed where everybody is on certain issues -Q

Including the President?

MR. GIBBS: Including the President. And I'm sure they discussed -continued discussions on how to bridge some of those differences. I don't -- what I'm trying to tell you is this was -- this was not -- there weren't three envelopes where we opened all three and then figured out how to get from one to three and okay, that issue is solved and now the next issue. This was the President hoping to figure out and continue to monitor the progress that's being

made throughout now, and quite frankly, hoping to ask them to continue to work throughout August. Q A monitor seems a little passive, as opposed to -- and I realize "negotiate" is very active, but is there -- is it somewhere in between? MR. GIBBS:

He's tired today.

(Laughter.)

No, I mean --

Q Sort of -- are they just saying "this is where we are," and he says, "okay, thanks for the update," or is it, "have you thought about this?" MR. GIBBS: No. I mean, the meeting lasted presumably longer than presumably what that would entail. I hate to get ahead of a readout just because I haven't gotten one myself. But I don't doubt that discussions continued on many of those issues. Q And then on a separate subject, looking just ahead to after the August recess, does the White House anticipate putting any new issues on the congressional agenda that are not -- you obviously have health, energy, financial regulation -- those are huge issues. Do you think that that's going to do it for the remainder of the year, or do you anticipate anything new? MR. GIBBS: You know, I haven't talked to leg affairs specifically about this. Obviously, that is, as you mentioned, a decent amount. Obviously, we've got appropriations bills that we have to finish to get through the next fiscal year. Let me get a better update from them. I mean, obviously, I think there are a number of issues. Whether they make it to the floor this year or not we'll continue to monitor and work on -- or monitor and negotiate -- so that we can -I'll take both the passive and the active voice on each of those. Yes, sir. Q Just to clarify one thing going back to the Bill Clinton trip, kind of unusual for you to characterize someone other than your boss and you said this was based on his history, but do you have direct knowledge -MR. GIBBS: Q

No --

-- that he did urge North Korea --

MR. GIBBS: No, no, and I think that's -- I think I -- I hope I previewed that enough. I mean, I think if you simply look at where he has always been on this issue and on the agreements and the work that he did with Kim Jong-il's father on denuclearization, I'm simply extrapolating from that. I have not been -- I have not heard the debrief on the specific conversations or what impressions the former President left North Korea with. Yes, sir. Q I have kind of a clean-up question on that, too. Is it fair to say that the President would be getting his Clinton briefing before he leaves for Mexico on Sunday? MR. GIBBS: Q

You mean whether he will see President Clinton before then?

See him, hear him, have his briefing before he leaves.

MR. GIBBS:

Let me make sure I understand.

Whether President Obama will -- I

don't know whether President Obama will meet with President Clinton prior to leaving for Mexico. I have -- I do believe that extensive debriefing of former President Clinton will happen very quickly and that President Obama will be brought into that dialogue to learn what former President Clinton learned as quickly as possible. I assume that happens before we leave on Sunday. Q But the intention is to have President Obama and President Clinton talk to each other. Is it -MR. GIBBS: I think they want to see each other at some point. Again, I don't -- I seriously doubt that's going to happen between now and Sunday, again, just because of the coordination of their schedules. Q Okay, can I follow up on another thing? A couple of months ago, the White House and the drug manufacturing industry reached a deal to cut drug prices. The New York Times has a story this morning, which I'm sure you've seen. How is the administration going to handle the House's demand to cut drug prices further and not blow that deal apart? MR. GIBBS: Well, again, to take -- I'm going to go back to the passive voice. I'm not going to get ahead of negotiating in a conference committee, though I appreciate the hopeful status update on where the negotiations are. Q

But you could if you wanted to.

(Laughter.)

MR. GIBBS: It would be a little -- a little brave of me. I do think -look, I think the goal of all of those at the table, particularly the President, is to see costs come down and to see progress made on that. But I don't want to get ahead of negotiating what might be bill differences. Q

But what do you think of the House's demands for additional cuts?

MR. GIBBS: I think that everybody shares the goal of cutting costs of health care, but beyond that I don't have anything specific. Major. Q Robert, Dr. Romer left the door open to a second stimulus in 2010, saying at one point, a good doctor always monitors the situation. Is that a fair assessment that the administration will wait until the beginning of next year before making any concrete decision about a second stimulus? MR. GIBBS: Well, timing aside, I think the good doctor -- both Romer and the good mythical doctor they were speaking about -- said exactly what we've all said, which is, first and foremost, our focus is on implementing the Recovery Act that Congress passed. Secondly, we will continue to monitor the economic situation. If there are ideas that the President or the economic team believe can and should be taken in order to accelerate the recovery and to lay that foundation, we'll certainly take a look at that. Obviously, I don't anticipate anything new in the near term, except as I said, the implementation of the recovery plan. Q Dr. Romer was also asked directly to say whether or not the President would raise taxes on the middle class in his first term. Her initial reaction was, "Can I go now?" Then she said, well, the first priority is to lower costs on government through health care. But at no point did she say the President would not raise taxes on the middle class in the first term. This would now be the third economic advisor of the President who, given the opportunity to say

declaratively that would not happen, has not. MR. GIBBS:

Do I count as an economic advisor?

Q So I'm asking you to help us understand why three people who are in every meeting with the President every day on the future of his economic policy would, after three times given the opportunity to say it's not going to happen, punt all three times. MR. GIBBS: Major, in fairness to her and to me, I will be happy to take a look at the transcript. Q

It's accurate what he said.

MR. GIBBS: I'm not questioning the veracity of Major. I do appreciate the ability to at least look at what the good doctor said. I'm going to give you the same answer that I gave you on Monday, which was the President's answer. Q And what would account for this what appears to be a repetitive disconnect between the President and his economic advisors, who meet with him every day on these topics? MR. GIBBS: And I'll have a better answer to that when I get a chance to look at what she said. Q Following up on what Jake asked about the fishy e-mails, would it be more likely to assume, Robert, that the White House would be curious about people who would be e-mailing them about things that they'd consider either disingenuous or inaccurate in order to keep in touch with them as part of an ongoing dialogue about their support for the White House efforts on health care -- meaning you're not looking for people who are saying things that are not accurate, but you're looking for ways to always expand the number of folks who e-mail you or Organizing For America as a political tool to keep in touch with them? MR. GIBBS: Well, let's -- hold on. Let me -- I'm not entirely sure what the question was, but let me put down some fence posts in the speech. OFA and the White House Web site, as you well know, are not in any way connected. Point number one. Point number two, I think I was -- as Jake vouched for the veracity of your statement, I think he will equally vouch for the veracity of mine in saying that I was pretty clear that we're not collecting names from those e-mails. Q

He was pretty clear.

MR. GIBBS:

(Laughter.)

I like the fact that, like, Jake is the arbiter here of --

Q

Well, I guess what I'm trying to figure out is --

Q

Ombudsman.

(Laughter.)

Q What I'm trying to figure out is why ask for them then? the goal here? MR. GIBBS:

I mean, what's

Well, Major, as I said to you before, as I said to Jake before --

Q And the staff that you have assembled here is obviously very capable of detecting all sorts of conversations in America about all sorts of issues and

responding and putting together briefing points -MR. GIBBS: (Laughter.)

-- we get stuff about what's said on FOX News all the time.

Q I wouldn't be surprised. goal is of seeking -MR. GIBBS: Q

I just don't understand what the particular

The particular goal is to --

-- e-mail the White House about things -- about this particular issue.

MR. GIBBS: Well, it's to get misinformation and to clarify for everybody what the misinformation is. I don't -- I hope that's not new. It doesn't certainly seem to be. Q What, the existence of so-called misinformation, or the White House soliciting -MR. GIBBS: Q

No, the --

-- descriptions in e-mails?

MR. GIBBS: -- the White House looking to correct misinformation. When you make a mistake in your report, sometimes I e-mail you; occasionally I call; sometimes I just throw something against the wall. Occasionally it's all three. Q

You ask Jake if Major makes any mistakes in his reports.

Q

Never.

(Laughter.)

MR. GIBBS: That would be -- let's not put Jake in that position. But, Major, we've discussed in here seniors having a misimpression about what is contained in the bill. We've talked about all sorts of things that are misconceptions in here. Q

-- all the thousands of people e-mailing the White House.

MR. GIBBS: And all we're asking people to do is if they're confused about what health care reform is going to mean to them, we're happy to help clear that up for you. Nobody is keeping anybody's names. I do have your e-mail. That is -Q

As I have yours.

MR. GIBBS: Maybe I assume that's because I assume future mistakes, but I'm not going to say that. (Laughter.) But nobody is collecting information. Everybody is trying to give people only the facts around what we all understand is a very complicated issue. Yes, sir. Q I know you said you haven't talked to the President about the meeting today with the Senate finance members, but did you have any sense going in what he thought of the proposal taking shape in the committee? MR. GIBBS: Look, I think we've heard various reports. I think part of what he wanted to do was to get that update on where they were on different aspects of

the legislation, and see how that comported with the principles that he's outlined. But again, as you said, I have not gotten a full debrief on that. Q Robert, on that same subject, if I may, the President is not frustrated with the pace of these bipartisan negotiations? And what did he mean yesterday by saying if there's not agreement by next month, I’m going to have to reassess? MR. GIBBS: Well, we want to get health care reform done. We've had this debate, as I've said before, for four decades. The issues aren't different; they're the same. Cost continues to skyrocket for families and small businesses. People lose their health insurance and people fall prey to insurance companies that discriminate against preexisting conditions, kick you off your insurance when you've become too sick. All of those things the President wishes to change and to do it this year. Q

He is frustrated with the pace?

MR. GIBBS: No, he's frustrated with the fact that millions of people are watching their costs go up; they're watching their insurance company dictate whether or not they're going to get medical treatment. I think that's a frustration to the President, members of Congress and members of the American people. Yes, sir. Q Do you know how many e-mails have been sent to the flag at whitehouse.gov address? And, secondly, isn't the White House required by law to save all correspondence it receives, so will it be informing individuals whose emails have been forwarded that they might want to have a chance to correct the historical record about the alleged fishiness of their e-mails? MR. GIBBS: Q

I, for the life of me, didn't understand your question.

Is the White House required to save the e-mails?

MR. GIBBS: Obviously, the National Archives documents correspondence with the White House. Q So the people whose e-mails have been forwarded, they won't be informed that their e-mails are being forwarded to the government? MR. GIBBS: Maybe I'm missing something. I'm sure you're hashing some nefarious plot, but I, for the life of me, can't understand it. Yes, sir. Q Yes. Thanks, Robert. Yes, just to go back to the 2003 video, and separately from any question as to whether those were mischaracterization of the legislation, President Obama did say in 2003 that, I happen to be a proponent of single-payer universal health care plan. As recently as last June he said -- told the AMA there were some countries where a single-payer system works pretty well. And I just want to ask, is that the President's preference, or was it -MR. GIBBS: Q

I think the President --

-- has it changed since that time?

MR. GIBBS:

The President's preference on a health care plan he had an opportunity

to outline, debate, and discuss in an almost two-year campaign for President from 2007 to 2008. April. Q Robert, going back to two questions, one on unemployment, you said that you were still expecting the unemployment rate for mainstream America to hit 10 percent. Are you expecting the unemployment rate for black America to still hit 20 percent by the end of this year? MR. GIBBS: I don't know what the number will be. Again, I expect that it is -- I think we've done briefings on this in terms of recovery and things like that, and expect that the unemployment rate will continue to rise for all Americans. I don't have a specific number. I don't know that the President has characterized a specific number for African Americans. Q For obvious reasons, there's a reason why the black unemployment is singled out. So you're saying it will go up. Do you expect, though, that it will stay double that of mainstream America -- mainstream Americans? MR. GIBBS:

Let me get some guidance from the econ guys on that.

Q

Okay, and then on --

Q

You need to call them anyway, don't you?

MR. GIBBS:

Apparently.

(Laughter.)

Q Then on the issue of the Supreme Court, what is the work that the White House is doing now for the next possible Obama pick for another justice for the Supreme Court? MR. GIBBS: I don't have any news to report on the notion -- on what happens next if there is another vacancy. I do know the President is -- as we talked about this morning, you will hear from the President today directly if, as we expect, Judge Sotomayor becomes Justice Sotomayor today. I think obviously you commend Democrats and Republicans for getting her -- hopefully -- confirmed in a very timely way in order for her to participate in the Court's activities in September with the hearing of the case that's been held over, and in the work that they'll do before the session begins, the Court's term begins, to pick the important cases that they'll work on next year. And we're enormously proud of the bipartisan support that she's likely to get. Q Once again, going back to the work that the White House is doing, is it possibly something -- I understand that the work was happening in the transition, possibilities if this President were to become President. So would it be just a continued -MR. GIBBS: Well, in the transition it was pretty clear he was going to become President, but, yes. Q I mean, well, even before you guys officially announced the transition, before he was even President-elect, we understand you guys were working on possibilities. And what I'm saying is once he became -MR. GIBBS: Q

I'd have to check that.

Go ahead, I'll play along.

But is it just a continuation from prior to arriving at 1600 Pennsylvania

Avenue, from the work that you did then to now for a possible next pick? MR. GIBBS: Again, I don't -- I'm not trying to be squirrelly. I don't -- I have not heard any discussion about work that has happened above and beyond work that had happened prior to the President's announcement of Judge Sotomayor in anticipation of the possibility of additional picks. I think you've got -obviously, there were a number of names out there and that pool continues. Q Middle East. Has the administration asked Israel to freeze settlements for one year in order to encourage the Arab states to offer concessions and normalizations? There's a couple of reports out there in Israel today. MR. GIBBS: I think the President -- without getting into any specifics, the President has been clear in outlining the steps he believes that Israelis, Palestinians, and Arab states should take in order to achieve a lasting Middle East peace, and that includes a freeze on settlements. Q Robert, ahead of tomorrow's unemployment report, I just want to make sure I understood something you said before. You're obviously very concerned about helping everyone find a job, and yet when you describe the unemployment figure, you don't use the higher figure that reflects those very workers. I'm talking about the Labor Department's U3 rate, which is 9.5 percent. But isn't the real unemployment rate that reflects people who are really struggling and can only find part-time work -- that's 16.5 percent. So why don't you use the higher standard if it's more accurate? MR. GIBBS: Well, I don't know what Mike's question -- I think Mike's question was based on -- well, since Mike was asking me whether it was going to go to 10, I assumed the figure he was using was the one that hadn't at that point eclipsed 10, since that would be a little redundant. Understand that unemployment figures only denote, as you said, people that are -that have -- that continue to look for work and don't consider themselves so unlikely to find work that they've stopped looking. I don't know that one figure, whether it's those that have stopped, those that are underemployed, those that wish to be working full-time and are working part-time, or just those that simply the Bureau of Labor Statistics say are employed or unemployed -- I don't know that one number in and of itself can tell the story of economic devastation that we've seen and the concern that the President has for getting the economy back on track and creating jobs. Q But isn't the higher figure more accurate because if you're out of work and the only thing you can find is 20 hours a week at Starbucks or whatever, that's not exactly a full-time job. Why aren't people like that counted in -MR. GIBBS: No, that's a part-time job. Again, I don't -- it's not for me to say or to judge the efficacy of each -- or what each figure delineates. The President will be concerned about joblessness for as long as there are people that want to work and can't find it. Whether that number is an unemployment rate, whether that's the number of people that can only find that 20-hour job at Starbucks and wish they could find a 40-hour-a-week job, the President will continue to be concerned about job loss. Sam. Q I want to take one more whack at this New York Times article about the behind-the-scenes deal with pharmaceutical companies. What measures is the White House willing to take to ensure that this agreement remains in place and that no

extra cost-saving measures are put in place by the House? Is the White House willing to do anything? Are you guys going to set a line in the sand? Can you move beyond this agreement? MR. GIBBS: Well, we've not laid down any sand and I've not drawn in it. Again, the President has discussed throughout his time as a candidate and as President the importance of and ways that we need to cut costs for seniors. PhRMA, the Senate Finance Committee, supported by the White House, entered into an agreement that would cut the costs for seniors who -- millions of whom fall into the doughnut hole as part of Medicare Part D's benefit that was signed into law a few years ago. This will help fill that doughnut hole for millions of seniors, and some of that money will be used for health care reform. That's the goal of that agreement and that's the goal of our White House. Q If they extract money from pharmaceutical companies beyond that, is that something that the White House would -MR. GIBBS: Well, we feel comfortable with the amount of money that has been talked about at this point. Q Robert, there is some unhappiness on the Hill among Democrats at the pace at which Senator Baucus is moving and sort of the way he is moving. Does the President share that impatience? MR. GIBBS:

Can you be specific?

Q Well, that somehow in the end the Republicans are not going to be there and that he is being strung along by them. That's the sense. MR. GIBBS: Well, again, I think the President's main goal is to do all that we can to move forward, again, with that goal of getting something done for families, small businesses, and for people throughout this country this year. I don't believe the President thinks that -- I know the President doesn't believe that he thinks this is -- that not meeting this August goal for the Finance Committee imperils in any way health care reform. It gives us all a chance to continue working toward progress, and change isn't going to happen overnight, and we certainly understand that. Q Do you know anything about the plans for the swearing-in of Judge Sotomayor? MR. GIBBS: No, I don't. I promised to check on some of what might happen here as a result of that. I'll look at that and try to have something in the week ahead tomorrow. I would also encourage you to contact directly the Supreme Court and they may have a better sense of when she would be sworn in. Thanks, guys. END 1:30 P.M. EDT

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