Press Briefing by Dana Perino

Business Wire, July 24, 2008

WASHINGTON -- James S. Brady Press Briefing Room

12:43 P.M. EDT

MS. PERINO: A special welcome to the Frattos. A couple of announcements, so bear with me here.

In his speech on the freedom agenda earlier this morning you heard the President discuss PEPFAR, which is the President's Emergency Plan for AIDS Relief. He noted the importance of continuing our commitment to fight HIV/AIDS, malaria and other diseases in the poorest countries. He emphasized that "nations afflicted with debilitating public health crises cannot build strong and prosperous societies for their citizens." And today the House is set to vote on final passage for the legislation to reauthorize PEPFAR and other diseases, the treatment for them. The President looks forward to passage of one of his highest priorities, and commends the many members from both sides of the aisle who worked to get it done. The bill will ensure that we are able to keep our commitments to replace disease and despair with healing and hope.

Also, it's come to light that Congressional Democrats plan a maneuver today to turn off what's called the "Medicare trigger." It was passed in 2003 and created a warning system whenever Medicare spending began to take a larger percentage of federal spending. Basically it required that when Medicare spending from general revenue exceeds 45 percent in two consecutive trustees' reports, the President would be required to propose a plan to Congress to reduce spending. Congress -- the Democratic leaders in Congress have decided not to take action, and would have the responsibility for acting on the proposals under expedited procedures.

Because they haven't acted and they ignored the warning, they have not fulfilled their obligations. Well, today, apparently Speaker Pelosi intends to do away with the trigger altogether for the remainder of the Congress, not only abandoning any responsibility to deal with runaway entitlement spending now, but to even get rid of the warning system altogether. This is the legislative equivalent of pulling out the fuse lights in your car, or the fuse in your car, when the "check engine" light is flashing.

The growth in entitlement spending, as you have heard the President say, is coming decades to -- in the coming decades will pose a tremendous risk to the United States economy. He has proposed ways in his budgets to deal with it, both on Medicare and also on Social Security. And we know that the Congress is reluctant to act on that as well.

There's another troubling aspect to all of this, and that is that actions by Democratic leaders to change the rules of the game when it gets to be uncomfortable, and we saw this with the Colombia free trade agreement. So instead of playing by their own rules, they just decided to change the rules altogether. And we're quite disappointed by this, and we'll be watching for further action.

That's it. Go ahead.

Q I wanted to ask about the housing bill. You all obviously decided to support it. I'm curious, though, what the White House estimates are of how much this will help, especially given the magnitude of the problem. We're talking about possibly getting new mortgages -- new, more attractive mortgages for about 400,000 people when some estimates put the number of foreclosures coming at about 6 million. How has the White House calculated that this will help? Is it because it would have a broader domino effect, or is 400,000 enough people to get help to? What's the calculation there?

MS. PERINO: There's several different aspects of the bill. You've mentioned a couple of them, but one of the things that we thought was most important, and the reason that the President decided that it was too important to have a prolonged veto fight -- that we were sure we would win and we proved that we would win yesterday -- is because Secretary Paulson has said that we need to have the GSE reform for Fannie Mae and Freddie Mac in order for us to be able to help stabilize the markets and provide confidence to the markets, which would not only help homeowners, but would help the overall economy. So that was the largest part of the bill.

Certainly, there are going to be some people that we are not going to be able to help that are going to have foreclosures. But we have been able, through HOPE NOW and through FHA Secure, two programs where we worked with the private sector and with HUD, to try to make sure that people could rework their loans. That will help, and this bill will provide some more help.

One of the things that we did not like about that $4 billion that the Democrats wanted to include in the bill is that it's an incentive for lenders to foreclose. Without that money -- if they think -- if the lenders think that they're going to get bailed out by the federal government, they're more incentivized then to foreclose on a property. What we would prefer is to not have that type of a bailout and to have the lenders be incentivized to try to work with the current homeowner to rework the loan in a way that the lender -- or that the homeowner can pay. So that -- those are the broad parameters of the bill.