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Office of the Press Secretary

For Immediate Release September 30, 1996
                              BRIEFING BY
                      CHIEF OF STAFF LEON PANETTA,
                    SECRETARY OF TREASURY BOB RUBIN,                 
                    AND OMB DIRECTOR FRANKLIN RAINES                                 

The Briefing Room

11:58 A.M. EDT

MR. MCCURRY: And a cheerful good morning to all of you. As you know, the United States Congress is expected to complete work on the omnibus appropriations bill for the Fiscal Year 1997 later today. The President is expected to sign said measure by midnight tonight. And to bring you all the highlights and the internal information that you need to understand this important piece of legislation, we are delighted to have the Chief of Staff, Leon Panetta, here; the Secretary of the Treasury, Robert Rubin; and Franklin Raines, the Director of the Office of Management and Budget.

I'll tell you also -- we'll go through the briefing now -- some of our technical staff, if you've got specific questions on aspects of the bill, they'll be available outside the awning area at the conclusion of this briefing.

Q Will there be coverage of the President signing it?

MR. MCCURRY: I am anticipating a very late arrival of this tonight. Our goal is to have a statement out that will be embargoed until -- we'll alert you when he signs it, but to keep everyone from having to stay here all night long, we don't anticipate this until very late this evening, so we'll probably do it by paper very late tonight.

Q So you're saying no coverage.

MR. MCCURRY: No coverage. We'll maybe put out a photo or something.


MR. PANETTA: Good morning. What I wanted to do is to summarize some of the negotiations that occurred on the bill and then some of its key elements, and then have Bob Rubin, Secretary of Treasury, speak to some of the issues that were involved here, as well as Frank Raines, Director of OMB, who participated in the negotiating sessions.

As you all know, we reached agreement on this early Saturday morning, and it wraps up six of the Fiscal Year 1997 appropriations bills, as well as a number of other issues. The bill itself is what we term, instead of a CR, this is really an omnibus appropriations bill that funds all of these areas through the fiscal year. So this is not a short-term CR. This basically approves all of the appropriations bill through October 1 of next year.

It's been passed by the House, overwhelmingly passed by the House last Saturday evening. And we expect that it will be adopted by the Senate probably late today. When that happens, obviously, the President will sign it into law to ensure that the departments and agencies that are covered by this appropriations bill can continue to operate. Everyone anticipates that this will happen. So this is not a question of raising a concern, it's just a question of getting it done, and that should happen tonight.

The agreement was reached as a result of a lot of very tough negotiations that went on, as you know, for a period of about two and a half days really because we started in earnest Thursday, worked through Thursday night until about 4:00 a.m. on Thursday. I got back at it at 9:00 a.m. the next morning, continued to negotiate through Friday night and finally completed the agreement about 7:00 a.m. Saturday morning, at which time the staff obviously had to then put together all of the working documents and bring them all together and then, even at that point, we had a series of problems that had to be resolved through Saturday morning that were finally completed, I think, with one final solution that had to take place Saturday afternoon. But that was all done.

And I do want to take this moment to commend the team that worked on this: Frank Raines as Director of OMB -- this was his first budget negotiations under fire and it's probably a good learning lesson for somebody that's got to take on that responsibility; John Hilley who headed up the legislative shop along with Barbara Chow and Martha Foley on my staff who did tremendous work; Jack Lew who was also involved as well as the entire -- all of the PADs from OMB and all of the team that worked on this. I just want to commend all of them because it was hard. We worked through the evening, through the night, and then ultimately had to put 2000 pages of a bill together.

In addition, I also want to commend both the House and Senate leadership on both sides. We had a number of meetings with both the Democratic leadership as well as the Republican leadership to try to resolve these issues, and I want to commend them for their cooperation in this effort. These are tough negotiations. They were tough going through them, not only because of the issues that had to be confronted here, but there was also the larger battle that was reflected in these budget negotiations, the battle that took place over the last two years over the priorities for this country and what we wanted to do in terms of directing this country into the next century.

The President was very pleased with the outcome of this negotiation, sent a letter to both the House and the Senate asking that the budget be approved and that he would sign it. The budget, I believe, reflects the priorities that the President has established for this country to try to ensure that we move towards a balanced budget, continue to move towards a balanced budget, but fund the key priorities that are important to this country in education, in the environment, protecting the 100,000 cops, and protecting the other priorities that were important to this country, and at the same time, not having to seriously cut or undermine Medicare or Medicaid or education or any of these areas.

This is fundamentally an agreement that I think reflects what the President has been fighting for the last four years, but in particular, the last two years to ensure that this country is headed in the right direction.

I have to tell you that there is no question that there was some leverage here that I felt I had as we entered these negotiations. The leverage was based really on three things. First of all, I think it was the fact that, number one, the President had fought the Republican budget successfully in terms of what priorities were to be set for this country and that by basically confronting the Republican in terms of their agenda, their budget agenda. That confrontation, I think, clearly was in the minds of those who were sitting down at the table. They did not want to repeat the same mistakes that had been made. I think, in addition to that, the American people had obviously made their views known particularly with regards to the issue of shutting down the government and that this was not the way to go.

The Republicans obviously were very sensitive to that issue as we are approaching another deadline here and no one wanted to repeat another shutdown. That also obviously helped provide additional incentives.

And, lastly, I think it was a reflection that obviously the Republicans in the Congress have been in a pattern of working to try to resolve some of these issues that they had confronted over the last two years as part of the Contract. This was part of a pattern that we saw developing with minimum wage, with Kennedy-Kassebaum, with the welfare reform bill and now with this final budget agreement -- that, in effect, they were interested in trying to resolve these issues, get them behind them as opposed to confronting them and try to adjourn the Congress, get out of town and get back to the campaign. I think all of those factors obviously helped provide leverage as we were negotiating this final agreement.

In the end, it is indeed, I think, a victory for the President, for the Congress, but most importantly for the American people. It's clearly a victory for the President and the priorities that he has been fighting for for four years, but in particular over these last two years to try to ensure that we implement fiscal responsibility, move towards a balanced budget, but ensure that our investments are protected.

It's a victory for the Congress. In the end, when you have a bipartisan agreement that brings together both the Democrats and Republicans working together to get this done and the resulting vote is a clear indication of that, it is what the American people most of all want in this country, which is for the parties to work together to do what's right for this country and for their children in the future. In the end, as I said, it's a victory for the American people because it does address the concerns that they care about -- educating their kids, protecting their families from crime and drugs, providing for a clean environment and combatting the threat of terrorism.

Let me just, if I can, summarize briefly -- and Frank and Bob Rubin will go into some of this -- but let me just summarize the highlights. First of all, as you should know, this budget is about $15.3 billion. In terms of non-defense discretionary, the President's budget had reflected a budget that had requested about $15.3 billion about what this budget reflects. But what we did was we restored about $6.5 billion to $7 billion by paying for it in the areas that we cared about. So we are still very clearly on a path toward a balanced budget. We have, indeed, achieved additional savings here. But we also restored our priorities by basically paying for it and ensuring that we did not increase the deficit in that process.

The key areas that we restored in terms of our critical investments were clearly education. Of the $6.5 billion that we were trying to restore, over $3 billion of that was for education alone. Education, I think, is the most significant area of restoration in terms of investments. There is no question about it. Head Start, Safe and Drug-Free Schools, Goals 2000, national service, Pell Grant scholarships -- those were all increased in terms of the investment. And this was done, again, on a basis in which Democrats, Republicans, we almost immediately when we sat down at the table concurred that we were going to, in fact, increase the investment in education. That was a very key element here.

We also protected, as I said, the 100,000 cops. There was an effort to continue to undermine the amount of money that goes specifically for 100,000 cops. We were able to keep that commitment. The drug money, which we also fought for to try to restore the full funding package that the President had asked for, was met. And we have restored those funds.

And we have, in addition, on terrorism, put about $1 billion, a little over $1 billion into antiterrorism efforts. That combines both the Gore Commission recommendations for increased security with regards to air safety, as well as increasing the manpower within the different agencies on terrorism itself. In addition to that, as you may know, we have funds that will study taggants as part of both the black powder and smokeless powder issues which have always been an issue that has been opposed in the past. We now have that study to, in fact, determine if we can use taggants in that area. That's an important step as well.

There were other major achievements in the bill. On immigration, as you know, we were very concerned about the ability to do a strong bill on illegal immigration in this country without continuing to penalize legal immigrants. The bill that initially emerged raised concerns for us not only with regards to the Gallegly Amendment, which was ultimately pulled back, but with regards to other steps that would have targeted and penalized legal immigrants.

We were able, I think, as a result of this negotiation to be able to modify -- eliminate the large hits with regards to legal immigrants while keeping some very strong enforcement measures with regards to illegal immigration. I think the President and the Congress need to recognize -- the President in particular, recognizes that this is a nation of immigrants and that we need to be a nation of laws, but the most important thing is we should not -- we should not -- penalize those legal immigrants who come to this country.

The other point is with regards to the Brady Bill expansion. We were able to get the expansion of the Brady Bill to keep guns out of the hands of those who have abused their spouses and children. This was a proposal that passed on the Senate side. The NRA, at the last minute, came in to try to see if they could modify or weaken that provision. We were able to hold a very tough provision on that with regards to the expansion of the Brady Bill in this area.

In addition, for those of you who follow these things, we were able to privatize Sallie Mae which is that area -- we have been able to privatize, as you know, areas that through the reinventing government initiative -- this was one of the efforts to try to see if we could do it with regards to housing funds under Sally Mae. We also have the small business reauthorization that was included here.

There were two areas that we did not get -- I'll just mention to you briefly. We were trying to get the gag rule for HMOs enacted. We had a team that was working on that, but they couldn't bring it together into a bipartisan agreement. So we will continue to work at that in the future to get that done.

On parks, there was an effort to try to put parks into this proposal. Our particular interest was to get the Presidio done, to get Sterling Forest done, to get the Tall Grass proposals done, plus some other initiatives that Ralph Regula was interested in. Unfortunately, that got bogged down in a larger parks bill debate as to whether or not other areas that the administration would oppose would be included. As you know, the parks bill -- a separate parks bill has now passed the House. We hope that it passes the Senate. If it does, the President would sign that bill that passed the House last Saturday.

In the end, this was, I think -- and I've participated in a number of these -- I think this was a successful effort to try to, in fact, protect our priorities, to complete negotiations on a proposal that I think represents a turning point in the national debate. The President has been very clear about what our priorities should be. This Congress came in with the Contract on America that tried to set a very different agenda for this country. In the end, what happened over the weekend is a reflection that, in fact, the President I think has stood firm for where this country needs to go and that the Congress has, in fact, recognized that the American people support those priorities. And that's why we were able to get this done and get it done, I think, successfully and in a bipartisan fashion.


SECRETARY RUBIN: Thank you, Leon. My comments will be very brief and will be made in the context of what Leon said. First, let me say this was a very complicated situation. I think the resolve of the President clearly was critical and the enormous abilities of Leon and Frank and John Hilley and all the people who worked with them, in my judgment, led to an accomplishment, a very substantial accomplishment, not only with respect to the budgetary matters, but all of the related issues that Leon talked about.

Let me make a comment or two, if I may, about context. This, in my view, having started this process -- well, I started this process in December of 1992 with the transition -- and in my view, this is one more step in the consistent and broad-based economic strategy the President has had. And that strategy has been very successful, has led to the -- been the predominant factor, in my view, in the economy that we have enjoyed for the almost four years now of this administration -- the 10.5 million new jobs, unemployment falling from 7.3 percent when he took office to 5.1 percent today, inflation being low, investment being -- private sector investment being at record levels, and the deficit being down 60 percent.

In addition to seeing the effects here in this economy, the economy we all live in, you see it when you go to international conferences. I hosted the G-7 finance ministers and Central Bank governors for an all-day -- pretty much all-day Saturday meeting, and it was very interesting. Four or five years ago at these kinds of meetings, the United States was severely criticized for not doing the kinds of things the world felt we needed to do.

At this meeting, and it's been true now pretty much through this administration, the United States is regarded as the world's leading economy, and the President is treated with enormous respect for the actions that he has taken and for doing the kinds of things that the rest of the world felt we needed to do to get our country back on track. And, similarly, the markets, from the very beginning, or from almost the very beginning, have viewed our economic program with respect and that's been reflected in how they have behaved.

So let me conclude by saying that I think this is a very important accomplishment, both with respect to the budget and the other matters that were dealt with, and it continues this economy on the right fiscal path for next year and because of the priorities that were emphasized, the right for the 21st century.


MR. RAINES: Let me start by saying how much I enjoy doing an all-nighter with Leon Panetta. It was a very interesting process, but particularly to see how well I think the administration is prepared for what has become these end-of-session negotiations necessary to bring the public's businesses to a close. The most important thing I think I would say is that --how close we came not to achieving this goal. We had six appropriation bills that were not approved. We had -- if the bills that had been moving had gone forward, we would have had a very substantially different set of priorities reflected in the appropriations than what's in the bill before the Congress today. And that, I think, is the most important message here.

Let me give you just a few examples. The bill as it's being approved now will provide over $4.2 billion in additional funds for the President's investments in education and training. What that means is that the Pell Grant program will now increase aid for over 126,000 students rather than a reduction, as was proposed in prior years. The direct college loan program, instead of being eliminated, will in fact be fully funded. We'll have additional funding for Safe and Drug-Free Schools, 19-percent increase to help communities reduce drug abuse and prevent violence. Title I program, which would have denied 1.1 million children benefits in their last year, will now increase -- provide increased benefits for half a million. In Head Start, where last year the budget proposal would have cut funds for 50,000 young children, we'll have a 50,000-child increase this year.

We see the same thing in areas of law enforcement and drug programs. There is a full funding of the Community-Oriented Policy services program -- the COPS program. What this means that we'll have -- 64,000 of the 100,000 police the President called for will now be funded. And we will be on our track to getting to the full 100,000 police officers on the street. Substantial -- we've got full support for the antiterrorism proposals of the President that were put forward as well as in drug enforcement.

In EPA, we were in grave danger of failing to fund under the proposals as they stood a week ago the initiatives in clean water and clean drinking water. But we were able to provide the funding necessary to ensure that those programs will, in fact, go forward and that we will not have the kinds of water quality problems that we've seen in various places around the country.

In the environmental cleanup, one example that's been very highlighted -- it seems every four years it gets a lot of attention and that is Boston Harbor. There was an effort to substantially reduce the funding that was available to continue the cleanup of Boston Harbor. But, in fact, we're going to see an increase of $25 million or 50-percent increase in funding for that program.

In the health area, similar kinds of achievements have been seen. We're going to have increases by 32 percent in the Ryan White AIDS treatment grants. NIH is going to see a substantial improvement. We're going to see funding in the Centers for Disease Control so that it is able to move forward on major initiatives that the President has outlined. Our one disappointment in this area, as Leon mentioned, was on the antigag rule which we very much hoped to have been able to have had implemented in this area.

But this wasn't only about funding issues. We also have a series of what might be considered good government issues. Leon mentioned the privatization of Sallie Mae. We also, after many years of debate, are finally putting the S&L crisis behind us with the funding of the safe fund for the thrift industry -- an issue that's been very contentious, was not going to be resolved, but was resolved as a part of these negotiations.

So across the board, this is an example of when a President has priorities and sticks to those priorities, we can see how you can, in fact, have them implemented -- something that people have often scoffed that you couldn't do that. The President from the beginning set out his priorities, he's pursued his priorities.

Now, we do not have a complete congruence. There's still some disagreements. In the Defense budget for example, there's about $2.5 billion of funds that the Defense Department didn't ask for and the Joint Chiefs didn't ask for, but still made it into the bill. We thought that that was something that we could have avoided and used to further reduce the deficit.

But overall, we're delighted that the President's priorities were reflected. We wish we didn't have to come down to the last minute to see the progress. But by moving $6.5 billion of the President's priorities into the budget, we think that it was well worth the many hours of sleep that were given up by people here in the White House and the Departments and at OMB.

Q Mr. Panetta, was does this do -- two parts question. First of all, what does this do to the balancing the budget by the year 2000? Is there so much spending in this that you would miss that deadline?

MR. PANETTA: No, not at all. On the contrary, I think this keeps us very much on path towards where we wanted to go in terms of ultimately balancing the budget. The reason for that is as follows. The $6.5 billion that we put back in to restore -- we fully paid for.

How did we fully pay for that? We paid for that in three areas. Number one, the provision on BIF-SAIF, which was the provision with regards to the Savings and Loan area that we've been trying to get through. That, in and of itself, produced over $3 billion in savings that could be used.

Secondly, on Spectrum, we sold part of the Spectrum which also provides, I believe, somewhere between $2 billion to $3 billion in savings, and then a billion of this came out of the Defense budget for paying for the terrorism piece of this.

So, when you look at the overall piece of increased investment that we have here with regards to our priorities, they are fully paid for. If you look at the big picture, the big picture is that we're $15.3 billion below what the President originally had requested. So that for the point of view of savings in the appropriations area, there are still significant savings. Combine that with, hopefully, continued growth in the economy, I think we are very much going to be able to stick to this path of reducing the deficit -- continuing to reduce the deficit, and ultimately arriving at a balanced budget.

Q To follow on that, you mention a new willingness to work with this Congress. All the things that you listed, like minimum wage and Kennedy-Kassebaum, came after Bob Dole left the Senate. Are you saying that if Senator Dole were still Senate Majority Leader you never would have been able to come to this kind of agreement?

MR. PANETTA: Well, I'll let the American people make that judgment. It is pretty clear that when Bob Dole did leave we were able to make some very successful efforts, working with the new leadership on the Senate side as well as the House in trying to get minimum wage done, get Kennedy-Kassebaum done, getting welfare reform bill done, and now getting this large appropriations agreement enacted along with immigration reform along the lines that we had sought, as well as expansion of the Brady Bill. I think those facts speak for themselves in terms of our ability to work with the new leadership.

Q Mr. Panetta, you said that this is $15.3 billion below what the President originally asked for, and so that's -- you're saying that if it wasn't for the Republican Congress we wouldn't have saved as much money?

MR. PANETTA: Understand that all of this -- understand that our proposal in discretionary spending was couched in our balanced budget that we offered at the beginning of the year. We offered a way to get to a balanced budget and within that balanced budget we felt we could increase our investments and get that done. And we have always said, we have always felt that this was not an issue about whether or not to balance the budget, this was a question of how do you balance the budget. And we felt you could do it and still increase our investments in education, in the environment, in crime, and still do it without having to undermine Medicare or Medicaid or the other programs that were important to people. We still believe that.

Obviously, in the absence of adopting an overall balanced budget agreement, with regards to non-defense discretionary alone, there are clearly additional savings that are achieved here with regards to non-defense discretionary. And we did have to come up with ways to pay for our additional investments, and that's okay. But in the end, I have to tell you that the reason this happened is because we were, in fact, able to stop their overall budget and, in the end, they felt that the American people wanted these investments as well. And because of that I think we were able to get it done without obviously undermining our goals in terms of reaching a balanced budget.

Q Can I ask you a question on another subject, on the Middle East summit? If you could, could you just explain what the President hopes to get out of this and if there isn't something concrete, some concrete progress made here this week, will that be a setback for his foreign policy record in the Middle East?

MR. PANETTA: The President's interest is to do whatever he can do to try to put the peace process back on track. And does it involve political risk? You bet it involves political risk. But he believes that political risks ought to be taken in this situation if in the end we can put the peace process back on track and bring peace back to that part of the world.

So those are the goals, and we are working now to try to bring these major players together here and our hope and our prayer is that in the end we can, in fact, resolve that situation and at least try to move towards the ultimate peace that is the hope for everyone in that region, and should be the hope for everyone in that region.

Q We're hearing out of Cairo today that it's been postponed until Wednesday.

MR. MCCURRY: I can do all that.

MR. PANETTA: Mike can pick up the other pieces on that.

Q In terms of the immigration bill, now do legal immigrants, do they get all the benefits that would be accrued to a regular citizen, ordinary citizen?

MR. PANETTA: Well, again, you have to remember that in the welfare reform bill there were enacted in the welfare reform bill cuts on benefits for legal immigrants that flowed out of welfare reform, both with regards to SSI and food stamps and some other areas. Those still remain. But what happened in the immigration bill is that on top of these cuts, there were additional cuts that were added to legal immigrants in the bill that came through -- cuts in health care, cuts with regards to providing AIDS patients with any kind of medical treatment, increased deportation steps, thresholds that were increased in terms of bringing in family members. All of those have been knocked out of the final bill here. What we wanted to do is to make sure that we did not do an additional hit with regards to legal immigrants.

Q Well, why such a vengeance against legal immigrants?

MR. PANETTA: Well, Helen, I'll tell you, as the son of immigrants, I have a hell of a time understanding why they have such a problem with legal immigrants. I think immigrants are in fact what this country is all about.

Q Don't they pay their taxes and so forth?

MR. PANETTA: They pay their taxes, they work hard, they've made this country what it is. And it's a little strange to me why they have this kind of vengeance against those who are here legally. We all understand the problem of illegal immigrants. We're all trying to ensure that we have additional enforcement to protect against illegal immigrants. But I, for the life of me, do not understand why we need to penalize legal immigrants in that process.

Q Two questions, Leon. On legal immigrants, I'm told by some of the California people that some or a lot of the punitive provisions were taken out, but not all.

MR. PANETTA: That's correct, Leo.

Q Since the President, with regard to the welfare bill, said that if he were reelected he would try to fix that hits on legal immigrants in the welfare bill, would he also try to finish the job with regard to the immigration bill?

MR. PANETTA: I think that's a fair statement. We have made clear that we will come back with regards to repairing the elements of the welfare reform bill that the President disagreed with, and we will do that. And in line with that, those areas that we weren't able to clean up as part of the immigration bill will be part of that process.

Q The second question I have has to do with the line-item veto authority which kicks in for the next President in January. Whoever is President, will he be able to line-item-veto stuff out of the fiscal '97 bills, or his authority starts with FY'98?

MR. PANETTA: No -- I guess I should have mentioned that probably an additional leverage point for us in addition to the fact that -- with regards to the priorities, as well as the urgency of avoiding a shutdown, as well as the urgency of members wanting to complete the session and get back to their districts is the fact that there was the recognition that the ability to line-item-veto goes into effect on January 1 of next year, and the President can exercise that. So if members, in fact, wanted to do an appropriations bill under the old rules, this was the last chance to get that done.

So the answer to your question is that the bills themselves that have been enacted now would not be subject to a line-item veto. But if there were to be, for example, a supplemental request or a supplemental appropriations bill that would go, then that would be the first -- that would be subject to a line-item veto.

Frank would like to add something.

MR. RAINES: Let me add something on the question of the overall impact of this on the balanced budget in the path of the balanced budget. As Leon mentioned, when we went into these negotiations, they were about $15 billion below the President's proposal on non-defense discretionary spending. However, they were about 10 and a half billion dollars above the President's proposal on defense.

So that when all is said in done in the negotiations, and taking into account our pay-fors for our proposals, the actual appropriations bill that has come out will about equal the spending that the President had proposed last February. So that, in terms of the aggregate spending, there has not been a major difference between the Republicans and the President's proposals. The big difference has been on the priorities within that aggregate spending.

And what has been resolved in the last few days has been to make sure that those priorities are straightened out. So that, in terms of the path to a balanced budget, this is exactly the same path that the President proposed in February, with the exception that in Fiscal Year 1996 the revenue that has come in as a result of the economic program has far exceeded our expectations for revenue. So we have been reporting, and I believe will continue to report, actual deficit numbers in Fiscal Year 1996 below those that the President had projected in February. And if we see a continuation of that trend into Fiscal 1997, it will permit us to go below what our current estimates are for deficit in those years.

So, if anything, we are now ahead of schedule by the end of today on the President's deficit reduction program. Remember, he said -- his pledge was to reduce the deficit by 50 percent, and we're now at 60 percent as of today. Going forward, we hope that if we continue to see the good numbers coming out of the Treasury in terms of revenue, that we'll make even more progress than the President had promised in January.

Q To follow on that issue, Secretary Panetta, you talked about continuing to work for a balanced budget --

Q It's Governor Panetta. (Laughter.)

Q Sorry.

MR. PANETTA: Whatever works. (Laughter.)

Q You talked about continuing to work for a balanced budget and ultimately reaching it. Does that mean that the President's commitment to balance the budget by 2002 as scored by CBO is part of yesterday's failed compromise, or does he retain that commitment in the second term?

MR. PANETTA: No, the President very much retains that commitment. I think the President's goal, if reelected, would be --his first priority would be to put a balanced budget agreement into place similar to what we did four years ago when we put our budget agreement into place. I think the President deeply believes that that is an essential ingredient to set the structure on which we can them make the kind of investments that he believes are also important for the country in education.

Q Mr. Panetta, you said you got most of what you wanted to stop the attacks on legal immigration. How would you rate what you got to combat illegal immigration? Did you get most of what you wanted, the extra money you wanted?

MR. PANETTA: We got much of what we wanted with regards to legal immigration. There was a section called Title V that was added to the bill that largely dealt with legal immigrants, and our proposal was basically to go back at Title V and try to remove those areas that involved legal immigrants.

As Leo pointed out, we did not get everything removed that we were after, but we certainly got the most egregious steps that would have penalized legal immigrants out. As to a percentage --

Q He's asking about illegal.

MR. PANETTA: I'm sorry. Oh, on the illegal, I'm sorry, we got I think all of the proposals that we were out to get for illegal immigration have been included and we fully support those.

Q Leon, just a minute ago you said that the talks this week involve a political risk for the President. I mean, what do you think that political risk is, and what is your reaction to the letter from the Republican leadership that implored the President not to undermine the U.S.-Israeli relationship? What do you think they're up to?

MR. PANETTA: Well, you'll have to ask them what they meant with their letter. With regards to -- I think the political risks involved here are obvious, because any time you bring the parties together in this kind of volatile situation it is an explosive situation and difficult to predict what ultimately can happen here. But the President felt that it's worth that risk if in fact we can ultimately bring these parties together. And so there is no question this is a tough issue and it's tough to do it at this point in time. But it's the right thing to do.

Q Is that letter helpful at this point?

MR. PANETTA: Not particularly.

Q Leon, quick question on the summit. What is the President's criteria, marker for success of the summit. If the summit concludes with both parties saying we're ready to go back to negotiations, is that satisfactory as far as the White House is concerned?

MR. PANETTA: I'm going to let Mike cover that base because I think right now what we've got to do is work on making this happen and putting the pieces together to make it happen. I think if we can get the parties here, that will be a significant step in the right direction. As to how you measure success, I think that's something that parties and the President are going to have to work through.

Q This is directed to Secretary Rub. On the transportation tax, Chairman Archer just established a bipartisan commission to look into all the transportation taxes and --

SECRETARY RUBIN: Oh, transportation tax, I'm sorry, I didn't hear you. Yes.

Q -- and is looking into a way to replace the current system with a more comprehensive one. How does the administration weigh in on this?

SECRETARY RUBIN: Well, I saw Chairman Archer the other day and he said that after the election, when we see who is here and who is not here -- and I kind of think we sort of will be here -- in any event, he suggested we all sit down and rather get into that now let me just say that we'll work on these things once we get past the election.

Q Who is going to win?

SECRETARY RUBIN: You'll know November 5th.

END 12:34 P.M. EDT