*EPF401 07/25/2002
Transcript: White House Daily Briefing, July 25
(Bush events in North Carolina, homeland security legislation, trade promotion authority, U.S. economy/stock market, medical liability reform, corporate responsibility legislation) (2930)

White House Press Secretary Ari Fleischer briefed reporters on Air Force One July 25 as they accompanied the President on a short visit to North Carolina, where Bush was to urge a cap on the amount of money people can be awarded in medical malpractice suits, and attend a fundraiser for Elizabeth Dole, Republican, who is campaigning for a U.S. Senate seat from that state.

Following is the White House transcript:

(begin transcript)

THE WHITE HOUSE

Office of the Press Secretary (Greensboro, North Carolina)

July 25, 2002

PRESS GAGGLE WITH ARI FLEISCHER

Aboard Air Force One En Route Greensboro, North Carolina

12:18 P.M. EDT

MR. FLEISCHER: Short circuit today, just because we have a short flight, so we'll see how much time we can get into before we take off. The President today had his intelligence briefing, FBI briefing, did a drop-by, group of Future Farmers of America. And then the President's event today will be a roundtable on medical liability reform, followed by a speech on medical liability reform.

Tonight he'll raise approximately $750,000 for Elizabeth Dole for the North Carolina Party and for the National Republican Senatorial Committee.

In the President's roundtable -- we'll give you the list of all the people who will be there and their stories, and you may want to talk to some of these people at the event. But the President is going to be joined by some real people who have some real life experiences dealing with the problems of medical malpractice.

Dr. Shelby Wilbourn has been practicing obstetrics in Las Vegas for 12 years. He's never been sued or had a claim filed against him, yet his insurance premium went from $33,000 to $108,000. At the end of this month he's closing his practice and moving to Maine, where his premiums will be about a quarter of what they would have been in Nevada.

Jill and Chet Barnes will be there. Jill is a student teacher and her husband is a fireman. They live near Las Vegas, where their own doctor left his practice because of high malpractice insurance rates. Jill is eight weeks pregnant. She and Chet were trying to find another doctor, but found out there's a limit on the number of deliveries a doctor can agree to take because of the sky-rocketing malpractice premiums. Jill has to drive about an hour and a half away to Arizona to get prenatal care. Now she's faced with trying to plan her delivery in Arizona -- not always an easy thing to do to plan a delivery like that.

So these are some of the stories you'll hear. And then Mark is here to go over the substance of the President's announcement. You have the fact sheets, so I won't get into that at any great length.

Before I take questions, there are two things I do want to raise. The President is extremely concerned with the way the Senate Committee is passing the homeland security bill that he proposed. The President believes that the bill as it stands from this committee action would not allow for an efficient transition or an effective department. The President will continue to work in a bipartisan manner, but we do have serious reservations about the direction that the bill has taken.

Similarly, in the Senate, despite what we believe is important progress being made on trade promotion authority, the Majority Leader of the Senate has said that "we are in no hurry." This is very disappointing. The nation is in a hurry. Because of the problem the Senate is going to have in putting this off until the fall, it raises questions about will the Senate even be able to get it done at all. So the President continues to believe that we can and we should get a trade promotion agreement done this week that can be passed by both Houses before they leave for August recess. The statement "we're in no hurry" is a disappointment. The nation is in a hurry. It's taken 10 years; it needs to get done.

Q: What's his specific concern on the homeland bill as it's changing?

MR. FLEISCHER: On the homeland bill there remain important issues involving giving managers the flexibility they need to run an effective and efficient department.

We'll come back.

Q: Is that a veto threat on the homeland security bill that you're making?

MR. FLEISCHER: Let me take Scott's question, then I'll come to that. When it comes to flexibility in the work force, the President thinks that the homeland security department's primary job is the homeland protection and defense of a very real terrorist threat to our country. To accomplish this, the President believes that we must protect people's civil service protections -- provide civil service protections. That's why he wants the protections to include what they currently include -- the Civil Rights Act, EEOC regulations, Fair Labor Standards Act, Social Security Act, Government Ethics Act, the Hatch Act. All of these will apply under the President's proposal, and what the Congress is working on.

The areas of difference deal with the ability of managers to be flexible in the hiring and firing and the need to have a work force that focuses on its defensive mission against terrorism. Let me give you some examples of what the President is seeking that managers at Homeland Security would not be able to do.

If a Border Patrol agent, under the way the Senate bill is written, is found to be intoxicated on the job and let's a potential terrorist into the country, he or she can't be fired without a written 30-day notice and must be paid during that notice period. Contrast that to what happened at America West with the drunk pilots. The country demanded action; a strong management system allowed action to be taken, which creates a powerful deterrent for other workers to make sure that they do not engage in behavior that could damage the homeland protections of our country.

In terms of rewarding people for good jobs, the President wants managers to be able to give people salary increases. Under current rules, workers cannot necessarily be given salary increases without going through a very difficult, burdensome, cumbersome series of procedures that often takes months, if not years, for a good worker to be get a pay raise.

Similarly, on the other side, a supervisor who would like to deny a within-grade pay raise to a agent who performed poorly would not be able to do so anytime quickly under the way the bill is currently constituted.

And other examples where, again, in terms of the need to be able to give managers -- front-line managers of homeland security more flexibility, literally, under the current rules, the following cases have been actually adjudicated and have taken months, if not longer, for managers to have internal flexibility. And this involves little things, where managers have set dress codes, where the wearing of jeans or sneakers was prohibited. That's all been adjudicated. Short-sleeve shirts versus long-sleeve shirts, been adjudicated. Little managerial details like removal of a water cooler from a work area, all been adjudicated. This is the type of managerial flexibility that the President would simply ask Congress to provide the line-item managers at a department whose mission is national security a little more flexibility than is found in the current law. All the other protections apply, with these hiring, firing, pay raise, discipline, reward incentives that are vital to a well-functioning machine that is involved in national defense is what the President is seeking. That's important flexibility.

Another area that has drawn concern is making the White House Office of Homeland Security a Senate confirmable position. That's a non-starter for this President. That's micromanagement of the White House by the Congress. You notice that the White House did not seek to tell the Congress how to micromanage its internal affairs. It's wrong for the Senate to try to micromanage internal White House affairs. So this does raise a lot of concerns. Now, having said all this, the President remains hopeful and optimistic that these provisions can be fixed without a veto. But he does feel strongly about it. He is prepared to -- he will receive a recommendation from his advisors to veto this if the President's concerns are not addressed.

Q: You're saying a veto threat if his concerns --

MR. FLEISCHER: The President will receive a veto recommendation from his advisors if these concerns are not addressed.

Q: Ari, can I ask a question on a different topic? Would the White House rule out consulting with top Wall Street experts about the current concerns in the market the way you guys have in the past met with and talked with CEOs about economic and corporate issues?

MR. FLEISCHER: As you know, the Secretary of the Treasury was up on Wall Street meeting with leading experts earlier this week. And the President's focus remains properly so on the fundamentals of the economy which, after all, drive the markets.

Q: As a follow-up, President Clinton had recommended that the White House, including President Bush, I think talked to like Warren Buffet, George Soros. Is that something you guys would rule out, like having a summit at the White House or having the President involved, you know, consulting with Wall Street experts?

MR. FLEISCHER: The President's focus is on the economy, and the administration always reaches out and talks to experts in the economy, which plays a role in markets.

Q: So would that include I guess I'm unclear. Are you ruling out ever consulting with Wall Street experts?

MR. FLEISCHER: Exactly as I indicated, of course. I just said to you that the Treasury Secretary was up on Wall Street.

Q: -- the Treasury Secretary will continue to do?

MR. FLEISCHER: -- conversations at the White House, talked to experts all the time in a variety of fields that include the economy, that include markets, a variety of shapes and sizes.

Q: The President's a strong backer of states' rights. Why impose this nationwide cap? Doesn't that contradict his states' rights backing?

DR. McCLELLAN: The President always has strong concerns about federalism. But he also has a strong belief in the role of the national government to play an important role in many public policy problems. In this case, the report released by HHS today documents enormous concerns that affect all Americans. The quality of care problems caused by liability laws in states that have not adopted reasonable minimum standards are causing people in their states to lose care. People are having to cross state lines to get medical care.

In addition, the kinds of liability laws that exist in some states that have not adopted reasonable reforms add billions of dollars in costs to federal programs. We are in a situation today where health care costs are rising nationwide and where we are trying to expand and improve government federal government programs to provide better, more affordable care to all Americans.

When states do not adopt reasonable liability reforms, Medicare costs are higher by billions of dollars, Medicaid costs borne by the federal government are higher by billions of dollars, federal tax subsidies that go to support private health insurance are boosted by billions of dollars. The HHS report estimates that the federal government could save $30 billion or more per year by the national adoption of minimum standards for medical liability. Those dollars can go to providing greater access to care and more affordable, higher quality health care for millions of Americans. This is a national problem that needs a national solution.

Q: If I could follow up, does the President risk appearing to side with big business here, in this case the insurance industry, over the little guy?

MR. FLEISCHER: The President sides here with pregnant mothers, with patients who want to have access to their doctors. That's who the President sides with. That's where the problems lie.

Q: On homeland security, are you now dropping your insistence that the legislation be completed by the August recess?

MR. FLEISCHER: What the President has called for is House passage and Senate passage prior to recess. No, we are not dropping that call. The President reiterates that call. We hope that will be done and the President is hopeful that, by stating these concerns, it will be helpful to the Congress so they can address these concerns.

And let me read to you from a letter. We'll make this available to you. This is dated today. Quote this is a letter to Congressman Armey and Mrs. Pelosi "Key to making the new Homeland Security Department successful will be having an agile, flexible personnel system. Another of our conclusions from the congressionally mandated three-year study is that today's civil service system has become a drag on our national security. The morass of rules, regulations and bureaucracy prevent the government from hiring and retaining the work force that is needed to combat the threats of the future. Our specific recommendation was to eliminate recruitment hurdles for civil service, ensure a faster and easier hiring process, and see to it that the strengthened professional education and retention programs are worthy of full funding by the Congress."

That's a letter sent to the congressional leaders by Democrat Lee Hamilton and Republican Warren Rudman, two of the most respected experts in the field of homeland security, who also have a concern about the quality of the work force.

Q: You said the President will receive a veto recommendation from his advisors. Do you know whether the President believes this would merit a veto, if these changes aren't made?

MR. FLEISCHER: The President is hopeful that by speaking out, he will be helpful to the Congress in addressing these issues so that this can remain a bipartisan effort, and that it can remain an effort that brings the country together to fight for our national security as part of a homeland defense bill.

Q: Ari, in other words, are you saying the President will veto this bill if those changes aren't made?

MR. FLEISCHER: I'm saying the President will receive a recommendation from his advisors to veto. It's early in the process in the Senate.

Q: How often does the President meet with Secretary O'Neill and his economic team?

MR. FLEISCHER: The President meets with his economic team sometimes two, three times a week.

Q: Including O'Neill?

MR. FLEISCHER: Depending on the topic, yes.

Q: If the Senate moves as quickly as it looks like they're going to on corporate responsibility, can you give us any guidance on a signing ceremony? Could it be as early as tomorrow?

MR. FLEISCHER: Corporate responsibility? Too soon to say what the exact timing will be. The House is scheduled to vote on corporate responsibility today, it looks like the Senate will also follow today. And the President is encouraged by that.

Q: Is there a possibility of a signing ceremony tomorrow, before he leaves town?

MR. FLEISCHER: No, Scott, I'd be very surprised if it happens that fast. I never rule anything out on the never say never theory, but I'd be very surprised if it moved that fast.

Q: Any observation to make about yesterday's stock market surge, Ari?

MR. FLEISCHER: No, the White House policy is we don't comment on day-to-day changes in the market.

Q: Not even when it's good news?

Q: Back on the medical malpractice, the White House has put forth proposals for tax credits to help people get private health insurance, and Democrats have not really embraced them. I wonder what makes you think that Democrats would embrace a malpractice reform plan such as this?

MR. FLEISCHER: Well, the President listens to this -- to the real-life stories about pregnant mothers who can't find doctors, about the impact on health care broadly, when doctors leave states because they can no longer afford to practice medicine there, and the impact on all of society as a result of defensive medicine that forces health care premiums to be much higher than they should be. And the President is hopeful that a bipartisan coalition can be assembled.

DR. McCLELLAN: I'd also point out that there is bipartisan support emerging for the President's tax credit ideas. Tax credits for health insurance have now passed both the House of Representatives and the Senate. They're under active consideration in the trade conference that's ongoing right now, and we're hopeful that this will actually be a new program established in law very soon.

MR. FLEISCHER: Last question, or else we'll never have lunch.

Q: How concerned are you that the President is politically vulnerable on the health care issue, that people perceive that he's not concerned about rising health care costs?

MR. FLEISCHER: The President does not look at this in terms of politics, one way or another. The President looks at this in terms of what is necessary to help people get their health care. You'll hear in the President's remarks, he'll also talk about the importance of Congress getting an agreement so seniors can get prescription drugs.

Q: Why North Carolina? Why to North Carolina with this program?

MR. FLEISCHER: Because health care is an important issue in North Carolina, as well as anywhere else -- everywhere else in the country.

All right.

(end White House transcript)

(end transcript)

(Distributed by the Office of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)

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