THE WHITE HOUSE

Office of the Press Secretary

                           PRESS BRIEFING BY 
                             MIKE MCCURRY      
                          AND JENNIFER KLEIN, 
         SPECIAL ASSISTANT TO THE PRESIDENT FOR DOMESTIC POLICY

The Briefing Room

1:45 P.M. EDT

MS. KLEIN: Hello. Today the President called on Congress to take action on child care legislation. He also released two reports highlighting private sector efforts to provide child care assistance to workers.

The first was the Treasury working group report. The Department of Treasury was asked to run this working group when the President held the White House Conference on Child Care, you may remember, exactly six months ago today, on October 23. And they met this morning with the First Lady and Erskine Bowles and released their report -- or presented their report to the President.

The report discusses the challenges facing working parents and the economic impact of child care, and highlights good private sector efforts across the country.

Just to run down a little bit on their findings: In terms of families, in 1996, 51 million working Americans, representing 38 percent of the labor force, had children under the age of 18. Child care is a serious financial burden for families, costing an average of about $4,000 annually, and representing more than a quarter of household income for low-income families.

In terms of the economy, the report focused on effects on productivity. They found that child care problems can have a significant impact on productivity; in fact, a recent study found that more than one in four employed parents with children under the age of 13 had experienced a problem with their usual child care arrangements in the previous three months.

Then they looked at benefits to businesses and found that many businesses find that the advantages of child care programs and workplace flexibility are not only felt by employees, which we all know, but by the company's bottom line as well, through increased productivity, reduced absenteeism, better morale, easier recruitment, and lower turnover.

They reported on a new families and work institute's survey, which was included in the report that shows that for many companies, the benefits of providing child care programs outweigh the costs or our cost-neutral. The report then goes on to highlight significant best practices across the country, from on-site child care to back-up child care to resource and referral networks -- the full range of activities that businesses are doing.

The President also released a Department of Labor report documenting model business practices. This report was drawn largely from the Women's Bureau Honor Roll companies. As you probably remember, the President called on the Department of Labor in 1993 to create the Honor Roll from those companies that are doing good things. The Department of Labor culled 40 or so companies that are doing particularly good things on child care, and then took the next step by announcing the launch of a new Department of Labor initiative so that the Department will serve as a clearinghouse and set up business-to-business mentoring in order to use the resources of the companies that they found are doing good things and to increase private sector involvement in child care.

However, only one percent of revenues for child care and early education come from the private sector. And as the President noted this morning, families are struggling more than ever to pay for child care, and states are not able to meet the demand for affordable care. Today's event is designed to point out, first and foremost, what is good that's in the private sector that's happening across the country and to spur further action on the part of the private sector, but also to indicate that businesses cannot do it alone.

As you know, as part of his balanced budget request, the President called for investments in child care to help working families pay for child care through the child care and development block grant as well as through tax cuts to give tax credits to businesses, to encourage their involvement, to improve the safety and quality of child care, to promote early learning, and to build the supply of after-school programs.

Many of the bills currently on the Hill reflect the President's priorities and they're important champions on the Hill of this issue. We were particularly pleased several weeks ago when the bipartisan women's caucus sent a letter to Speaker Gingrich urging that Congress take action this year on child care. But Congress isn't moving, and this morning I think you heard that the President made very clear his view that Congress should pass child care legislation this year.

Q The President noted this morning that parents pay a lot more proportionately of the total burden of child care costs than they do of college costs. Over the last few years he's sought a lot more assistance for college education than he has for child care. Does that mean his own priorities have been a little bit backward and he's rethinking them now?

MS. KLEIN: No, I think he has -- if you look at our record on child care, he has been building towards increasing investment in child care. For example, in the welfare reform bill, we fought for $4 billion to help states pay -- help families pay for child care. And we've sort of built a record of that, and I think the $21.7 billion that he put on the table this year is a significant indication of his priority.

Q How much of the $21 billion is dependent on the tobacco legislation?

MS. KLEIN: About a third of it -- $7.5 billion.

Q And what happens if you don't get the tobacco legislation?

MS. KLEIN: First of all, we think we're going to get the tobacco legislation. And if we -- the President is committed to doing this child care stuff; he'll look for other offsets, if that's not possible.

Q What did you say -- he'd look for what?

MS. KLEIN: Other offsets.

Q Can you expound on that a little bit? I don't understand what you're saying.

MS. KLEIN: Well, obviously, everything has to be paid for in the budget, and the $7.5 billion that we've invested or proposed to invest in the child care and development block grant would have to be paid for in another way.

Q But you don't know how that would happen?

MS. KLEIN: As the President puts his budget together and it works its way through Congress, there's obviously a lot of give-and-take about what the spending proposals are and where the spending comes from. We paid for it in our budget, and so we haven't announced any other offsets.

Q What's your thinking about why this proposal appears to be going nowhere on the Hill this year? Do you write it off to the politics of this year or what?

MS. KLEIN: I think a lot of it has to do with politics, but I also think that there's still time left. I mean, we're urging them to take action because we still think action is possible. But I think those sort of back-and-forth that happens so far is in large part a political issue.

Q Are there competing proposals you think are more likely?

MS. KLEIN: I think there are a number of proposals on the Hill that both the President feels strongly about and others feel strongly about, and it's just a matter of balancing them. And I think you heard him say this morning, we need to think about it as we understand the importance of the early years and we understand the importance of child care, where you want to place those investments.

Q Could you take a crack at the question the President begged off on this morning about whether there should be some sort of tax break for people who stay at home?

MS. KLEIN: Yes, actually, I think he later answered it, but what he said, basically, is that we are willing to talk about it, but we need to talk about something. And we need to actually see Congress moving on this, and that it's not an either-or.

When you look at, first of all, his record on this, he's taken significant steps to help families and that helps, obviously, families who want to stay at home. I think the most obvious is the $500-per-child tax credit. But if you look at the earned income tax credit and the minimum wage and others, he's built a record of putting more money in the pockets of families. And the other point that he made was that all of that is true and is said and, on the other hand, working families are still really struggling and child care is an important piece of that.

Q You all don't seriously believe that the country could afford anything like a tax cut or credit that would offset the cost of child care, do you?

MS. KLEIN: We're sort of in the same place. We've heard of the proposals that are on the Hill, we are evaluating proposals that are on the Hill, but your point is exactly right -- they don't offset the costs of staying home to take care of your child. All of the proposals that are up there to help stay-at-home parents are more money in the pockets of parents, an additional tax credit, but they can't offset the cost of an entire salary.

Q Thank you.

MR. MCCURRY: What do you want to do first? Today is the 30th anniversary of the Fair Housing Act. Did you know that? You didn't know that.

Q We want to do Henry Waxman and Dan Burton.

MR. MCCURRY: Let's do other subjects first. The U.S. Housing and Urban Development Department, in cooperation with the President's Initiative on Race, has today held a roundtable discussion at Rutgers University School of Law in Newark, to commemorate the 30th anniversary of the Fair Housing Act. I call that to your attention in case you want to call our Race Initiative folks and get anything more on that.

I'll do a quick readout on the President's meeting with President Niyazov of Turkmenistan. As I told you earlier today, the conversation focused on human rights, the need for political and economic reform, and Caspian energy issues, as well as regional issues. U.S. concerns over human rights and reform figured very prominently in President Clinton's presentation, and will also in the conversation that the Vice President is having now with President Niyazov.

We have been encouraged by some actions the government of Turkmenistan has taken, but we emphasize the importance of continuing the path of both political and economic reform as well as respect for individual rights. The President and the Vice President stressed the swift implementation of political and economic reform are essential for Turkmenistan's sovereignty and prosperity. Both Presidents talked about the importance of working together towards a multiparty system and free and fair elections in 1998 and 2002.

We hope that Turkmenistan will continue to improve the human rights situation following this visit, which was important to President Niyazov. We hope that they will continue to live up to the commitments they've made to the United States government in the past.

The two Presidents agreed on the importance of developing Turkmenistan's energy resources, including the trans-Caspian transit corridor, to bring the significant oil and gas resources of that region to market.

In a short while, the Vice President is going to witness President Niyazov's signing of a trans-Caspian pipeline feasibility study that will be undertaken with the U.S. Trade and Development Agency, and we do have a press release from TDA on that if you're interested.

Caspian energy development is vital to the economic future of the region, the President told President Niyazov, and we will continue to work with Turkmenistan on the development of Caspian energy and ways to bring those resources to market.

The Vice President will have more to say when you see him in a short while.

Q Can you outline some of the energy deals that are being signed by the President of Turkmenistan, specifically with Mobil, Exxon, Haliburton?

MR. MCCURRY: Yes. Well, I can tell you what I have on that. I think we'll have some additional information that will be available following the Vice President's event, but the following documents were to be signed today or will be signed in the ceremony coming up: first, the feasibility study that I mentioned for a trans-Caspian pipeline; a bilateral energy dialogue that the U.S. Department of Energy will undertake presumably with the relevant energy ministry from the government of Turkmenistan; a scientific and technical cooperation memorandum of understanding with the Department of Agricultural; a joint statement on security relations with the Department of Defense. These are all following on the other significant meetings that President Niyazov has had during his stay here. A financing --

Q Whose joint security?

MR. MCCURRY: It's a joint statement on security relations. Do we have military-to-military with them?

COLONEL CROWLEY: Just helping with their sovereignty and to guarantee their sovereignty and independence.

Q We are guaranteeing their sovereignty?

MR. MCCURRY: Given Turkmenistan's significant position in the region, and given its historical associations with the government of Russia, we have a keen interest in the role that they play with respect to regional economic security, and there have been some military cooperation programs. I think DOD can tell you more about those.

Q Is that correct, are we guaranteeing their --

MR. MCCURRY: No, no, no. This is not a security guarantee, this is a joint statement on security aspects of our bilateral relationship.

A joint technical exploration study with Exxon will be signed, as well a production sharing agreement between the government of Turkmenistan, Mobile and Monument Oil; and a cooperation agreement on oilfield services with Haliburton. That's the information I've got, and we can see if we can get some more detail on those specific agreements if you're interested.

Q How did President Niyazov respond to these concerns about human rights and political reform?

MR. MCCURRY: I think he well understands the importance we attach to political reform and economic reform. He knows that that will continue to be a feature of the bilateral relationship that we stress. I think he will leave Washington understanding the importance that President Clinton and the United States government attaches to that issue. We certainly hope that will lead to certain changes and certain progress towards respect for individual human rights in Turkmenistan in the future.

Q Well, this 90-day --

Q -- pledges about releasing political prisoners --

MR. MCCURRY: We had a good discussion. I think it would be more appropriate for the President to address that himself, as I believe he plans to do later -- President Niyazov.

Q Besides the commitments that you say Niyazov has made, does President Clinton feel that there has been any improvement?

MR. MCCURRY: There have been some signs of progress, but certainly we would hope to see more. And that's one of the reasons why --

Q What were the signs?

MR. MCCURRY: There's been some release of political prisoners in recent weeks. But we would hope to see much more of that, as well as movement towards strengthening democratic institutions, the holding of free and fair elections being foremost on that list.

Q What is the U.S. position on Turkmenistan cooperation with Iran? Because Turkmenistan is going to export its gas to Turkey through Iran.

MR. MCCURRY: Well, we have expressed on numerous occasions our concerns about Turkmenistan's relationship with Iran, and our concerns about the nature of that regime. We have examined closely some of the proposals for energy cooperation, and examined whether or not the question of sanctions are applicable under the Iran-Libya sanctions act. The U.S. domestic law that governs those sanctions have not been held in place because of the way in which various conversations have been structured, but one of the reasons why President Clinton put such a stress on a Western -- East-West route for a trans-Caspian pipeline is precisely because we think it's important for energy resource development in the Caspian region to occur in a way that is both safe and secure, and it also encourages further commercial and economic cooperation with Western democracies.

Q In view of Henry Waxman's public threat to consider action to try to remove Dan Burton as Chairman of that committee, or otherwise censure him in the House because of Burton's slur on the President, what is the President's view of the slur on him and of what Waxman may do?

MR. MCCURRY: I think the President has elected not to be overly preoccupied with that and has elected instead to work on the kinds of things that the American people expect him to be focused on. We can well understand the concern that was expressed on Capitol Hill about that remark, but the President elects to stay focused on what he thinks are his priorities and the American people's priorities.

Q Well, what does he think, though, about the use of that kind of language from one public figure toward another?

MR. MCCURRY: He chooses to ignore it.

Q Mike, what are the President's thoughts about McDougal being called again before the grand jury and refusing to testify?

MR. MCCURRY: He's electing not to share any thoughts on that.

Q I think Iraq today submitted a formal letter to the U.N. calling for the lifting of the embargo, and this letter will require a response from the U.N. to Iraq. What is the U.S.'s position on this?

MR. MCCURRY: Well, we participate in the periodic review of Iraqi sanctions that occurs within the Security Council, and our views with respect to that process are well known. We have seen insufficient grounds to lift all of the U.N. Security Council Resolution 687 sanctions that are in place. There needs to be further compliance by the government of Iraq with a whole host of post-Gulf War requirements that have been placed upon Iraq by the international community.

Q Mike, earlier today you responded to Mr. Burton's comment with a rather jocular retort. I wonder if, however -- (laughter) -- I wonder if this is something that --

MR. MCCURRY: You mean the line I borrowed from Lockhart?

Q The line you borrowed from Lockhart, which you would repeat for us, if you would.

Q What was it that you said? I don't recall.

Q -- in my question, in deference to daughters here and all of that.

MR. MCCURRY: I suggested that Chairman Burton's use of a two-syllable vulgarity was rather ambitious.

Q Meaning that he's not smart enough to figure out --

Q In retrospect, though, is this something that we can still brush aside, or is this a more serious matter?

MR. MCCURRY: Look, it is a serious matter. And one of the hallmarks of American democracy, one of the things that -- one of the reasons why we stressed the importance of democracy when we met with the President of Turkmenistan today is because we cherish it. And one of the things we cherish about our democracy is that you have the right to be as bizarre as you want to be. And Chairman Burton is providing ample evidence of the importance and the strength of that democratic institution.

Q "Bizarre," that's a mild word, though. Again, this is a --

Q Yeah, you can do better than that. (Laughter.)

MR. MCCURRY: That's sufficient. I think there has been plenty of --

Q I have heard a lot of name-calling in Washington, but this is -- I haven't heard people call this kind of name.

MR. MCCURRY: There has been plenty of discussion of that issue on the Hill today.

Q Speaking of name-calling, have the French betrayed the U.S. administration in the matter of the arrest of Karadzic?

MR. MCCURRY: No.

Q Mike, Louis Fox has said -- no leaks; he himself has said -- that when he let Monica Lewinsky into the Oval Office, the President told him to close the door, she'll be here awhile, and that all the other doors to the office at that time were alarmed so no one else could go in and out. Given that people like James Carville have suggested those doors weren't alarmed, can you clarify for us whether they are, or not?

MR. MCCURRY: I can't clarify anything about the circumstances of whatever he testified to in front of the grand jury. I don't have any reason to dispute it, but I don't have any reason to -- any information upon which to confirm or deny it.

Q When you say there was no French betrayal, what are you saying? It was a rogue incident with a French military officer?

MR. MCCURRY: The French -- if I understand correctly, the French Defense Ministry has issued a statement that I think provides some clarity to that. We value and appreciate the work we do with the government of France in Bosnia. They are an indispensable element of the deployment in Bosnia that is helping the people of Bosnia reconcile from the effects of civil war. And our close cooperation with our close ally, France, will continue in Bosnia.

Q You accept the French explanation that there were imply questionable ties with possible war criminals?

MR. MCCURRY: Well, they have said much more than that and have said things about the officer in question, and I think the government of France is in the best position to address it.

Q And do you think his reassignment to another post in Paris is sufficient?

MR. MCCURRY: I think that the government of France has addressed that in a manner that we consider sufficient.

Q Has the President taken this up directly with French officials?

MR. MCCURRY: Not to my knowledge, but there certainly has been diplomatic discussion about it.

Q On Deborah's question, it is a knowable fact whether or not the doors have alarms.

MR. MCCURRY: I'm not going to attempt to comment in one way or another about any matter that might be an aspect of an ongoing investigation that the Independent Counsel's office is pursuing.

Q There has been suggestions that the President not go to the White House Correspondents Dinner because of Paula Jones presence.

MR. MCCURRY: Why, or who's suggesting that?

Q Richard Cohen and others -- his column this morning.

MR. MCCURRY: I mean, you should ask your colleague, Mr. McQuillan, but she's not going as a guest of the association as far as I know.

Q No, no.

MR. MCCURRY: I haven't heard any discussion of that.

Q So you are saying there would be no reason why he would stay away because she's there.

MR. MCCURRY: He didn't indicate to me that he has any cause for concern about the fact that she will be there. He was more interested in the fact that Greg Norman was going to be there. (Laughter.) But since he's hurt his shoulder, or had his shoulder operation, that means they can't play golf.

Q Mike, but going back again -- it's not simply a question of whether it's knowable or not knowable that it's alarmed. It's also that White House allies were out there suggesting it wasn't alarmed. Now, was Carville --

MR. MCCURRY: I know I didn't do that. I'm not familiar with what Mr. Carville said.

Q Do you want us to get you transcripts?

MR. MCCURRY: I'm not interested in what Carville said. I'm interested in what we said here, and I know that we never suggested here that we knew anything about the specific circumstances that he may or may not have testified to.

Q Mike, Tom DeLay has moved to end the federal role in bilingual education. What does the President think of that?

MR. MCCURRY: I'll have to take that question and check on that, because we are doing some work on that and I forgot to get that.

Q We've seen a series of events this week where the President has sharpened partisan differences with the Republicans on the Hill on issues like education and child care. Does this indicate that you think progress is so slow on the Hill that the chances of getting action are low, so you might as well draw the --

MR. MCCURRY: To the contrary, because the ability to pass legislation that reflects the President's priorities is in part a political process. And part of what we are doing is generating what we think is the kind of political momentum with those who are supportive of the President's positions on the Hill to allow some of these things to move forward. We think that's true in the case of tobacco; we think it's true in the case of child care; we think it's true in the case of some of the President's important education initiatives. And we think that as the American people rally to some of the positions the President has expressed, that those who are in opposition in Congress will maybe see the message.

Certainly that just has happened with campaign finance reform, in which the House Republican leadership was forced to back down. So I think one of the things that we're doing is to, as we get deeper into this legislative session, is to begin to create a public debate that will help members of Congress do what we think is the right thing.

Q Well, Mike, it seems to have had the opposite effect on education. The Senate voted down all the things the President asked them to pass.

MR. MCCURRY: Well, that's right, but they've got a long ways from finishing that process, and I think that there still is a great deal of support for the kinds of initiatives the President has talked about, both with respect to putting more teachers in the classrooms, to modernize schools so that they can be equipped to be the kinds of places of learning that we need them to be in the 21st century. I think there's a great deal of support for the President's views on Capitol Hill, and as this process goes forward we're going to be continuing to build the kind of case that will generate, we hope, success in the end.

Q Can I follow up to Susan's question? Donna Shalala made a pretty explicit threat today -- she said, Congress better not go home without it, passing child care. Or else what?

MR. MCCURRY: Well, they will I think encounter the kind of folks who you saw in the Rose Garden today who are interested in seeing that kind of support available and who expect the Congress to take those kinds of actions on behalf of the American people.

Q Why at each of the events this week -- at the education event, at the environment event, at the child care event today -- the President makes a point of telling Congress that the money is there for it? Is he feeling particularly flushed because the prospect of budget surpluses?

MR. MCCURRY: No, he's just reminding them that that highway bill is awfully large, and that they ought to think about the priorities that they cast as they make critical spending and budget decisions. We've got enormous concern about how some of the spending priorities are developing on the Hill and that's why we need to press the case for some of these initiatives that are going to be important to the long-term success of efforts to improve education, improve the quality of our work force, the productivity of our work force. Those all require in some way or another the kinds of investments that the President often talks about.

He was talking about investments in the environment yesterday, and all of those remain for the President the way in which you successfully build the foundation of a strong, growing economy for the 21st century. But you have to do that with some sense of balance and some sense of priority. And that's what we're encouraging Congress to think about.

Q What if there's no revenue from the tobacco bill -- or tobacco deal?

MR. MCCURRY: We prefer to think at the moment that we're likely to achieve comprehensive tobacco legislation of which revenue for the kinds of programs the President has been talking about would be available.

Q Well, the tobacco bill in particular is in a state of some peril. And I wonder if there's something more the President is going to do to make sure it stays on track for action this year.

MR. MCCURRY: Well, I don't know that I agree that it's in some state of peril. They've got a peculiar situation where the House Republican leadership has elected to be outlyers in the process that's underway. But there is a great deal of work underway now to craft legislation that we think is going to get strong bipartisan support in both Houses. And that's the purpose of the President's drop-by with the meeting with Senator McCain yesterday. It certainly is true that Mr. Bowles in his meetings will be pressing ways in which we can move that forward. And there have been very good discussions about how we can take the tobacco legislation that came out of the Senate Commerce Committee, build on it, work on it and get it both through the Senate and then, ultimately, we believe, through the House.

Q But some advocates, including Senator McCain, think it would be helpful if, for instance, the President endorsed a particular bill, or convened a big high-profile White House meeting. Is the President going to do any of those things?

MR. MCCURRY: Senator McCain knows how closely we are working with him on aspects of the legislation that he heroically shepherded through the Commerce Committee. And I think there's -- when you get behind maybe some of the public dialogue, there's been a great deal of work and a great deal of progress on that legislation.

Q Mike, in the past few days, I think a couple of weeks ago, the state of Virginia executed a Paraguayan citizen. Yesterday the state of Arizona executed a Honduran citizen. In both cases, it seems like Convention of Geneva rules were violated because the embassies or consuls were not notified when these people were arrested. I know there was a petition of leniency from the Pope, from America's Watch, from Amnesty International. There's been a lot of hullabaloo about this overseas. What is the position of the White House?

MR. MCCURRY: Well, I think that you might even be more aware than I am, since I missed it when I was gone last week of some of the discussions the State Department has had with respect to that, and they have addressed that. I would need to go back and revisit some of the things that Secretary Albright and others worked on, but we believe that we have given consular representatives for those governments opportunities to be part of the process, as we would expect for U.S. citizens who are incarcerated abroad. And we would strongly deny that there had been any violation of international law with respect to those decisions.

Q One more on the White House dinner. Is there any chance the President might choose that opportunity to say something to mollify Paula Jones and perhaps end this whole thing? (Laughter.) That's a serious suggestion.

MR. MCCURRY: Can I take a serious question back here?

Q That's a serious question.

Q That's good. That's very good.

Q Mr. Burton's comments are just the latest example of conservatives on the Hill making very public comment and attack on the President in the context of the investigation. What does that say to you about the strategy of some up there in the context of this investigation?

MR. MCCURRY: Well, it only says to us that they seem to miss the point, that what the American people expect of their elected leaders in Washington is that they stay focused on the issues that matter most to the American people -- the state of our economy, the quality of lives that American citizens lead, whether we're going to have things like child care, which was the purpose of the President's event today, whether or not we're going to move ahead on all these things that are critical to this country in the 21st century.

And the President of the United States is going to keep his focus rock solid on those things that he was elected by the American people to do. And if some in Congress choose to put their focus elsewhere on other matters, that their business, but I think it's not the American people's business.

Q This morning you said you would have more to say about Congressman Shuster's proposal to make some concessions in return for putting the highway trust fund off budget. What's the President's reaction to that?

MR. MCCURRY: I've got a lot of words here that I can recite for you. They don't add up --

Q Any of meaning?

MR. MCCURRY: Not really, but -- (laughter). But I'll try anyhow. There are couple of good things to say. First, that it was very important that Congressman Shuster endorsed the federal standard of .08 on DUI. That was something that the President has felt strongly about. That's an important stand and it will protect Americans and potentially save hundreds of lives a year. Second, we oppose the earmarking of projects in specific bills, and we think that the Congress ought to allow all highway funds to be channeled through the traditional state planning process, which is available through state transportation departments, so that you can make appropriate trade-offs when you make decisions on investment.

That's been one of our concerns about the bill, and we've stated that often. And we think that with respect to that, Congressman Shuster is on the right track, and that is good news.

We do have serious reservations about the bill, principally because of the spending. It's $53 billion above the President's budget request, which itself was above spending levels that were initially set in the balanced budget agreement. We called for significant increases in transportation spending in the President's balanced budget proposal for fiscal year 1999, and it's important for Congress to recognize that before they sap all of the energy and investment potential that's in the budget out of some of these other priorities the President addresses and place it only in surface transportation.

Q What about the --

MR. MCCURRY: The trust fund? You mean the --

Q He doesn't want the trust fund to be used to make the deficit seem smaller than it is.

MR. MCCURRY: I think that's an issue -- Barry, chime in if you want to -- but that is an issue -- the complexity of that issue changes because of the environment we're in now, one of the balanced budget and potential future surpluses. In the past, that question has always been tied up in how do you deal with federal budget deficits and there's some change in that now. But again, we kind of go back to the same fundamental principle, which is you've got to make prudent, careful, disciplined investments. You have to choose your priorities carefully. And with respect to money that creates a perceived surplus in the budget, it's important to have that available as you address long-term entitlement questions, specifically Social Security.

Q Are you saying that if the highway trust fund was put off budget, the budget would still be in balance?

MR. MCCURRY: I don't know. There's someone in the back who could help me with that, but you don't want to -- he's here with his daughter, so it's not fair to do that.

Q I mean, you're saying the budget is balanced and some of these funds are earmarked, and I'm asking you --

MR. MCCURRY: I don't know. Do you know the answer to that?

Q -- if you didn't use them to mask the size of the deficit --

MR. MCCURRY: We'll refer you to the Director of the OMB later in the day. (Laughter.) I think that does -- Barry is correct -- that depends on exactly how you calculate what the potential surplus will be in all that we've said so far, what the Director of OMB has said so far is there will likely be an excess of $18 billion dollars. But we haven't said how much.

Q Well, how big is the highway trust fund? Okay, so the surplus would be much smaller.

MR. MCCURRY: Well, we'll see.

Q Well, the Social Security fund is a huge one that masks the deficit.

MR. MCCURRY: Correct. That's correct. And the whole concept of whether or not the budget is unified is a complex one we'll save for another day.

Q Could you say something about the reaction of Iran and Russia about Niyazov visit to the White House?

MR. MCCURRY: Well, they have -- in part, some of the reaction has been predictable. But we are also aware the fact that Iran has from time to time -- portions of the leadership of Iran have said things that indicate a sense of their larger responsibilities in that region. And we have been very encouraging of statements that indicate that they desire to play a different role with respect to the security balance in the region. And we obviously would encourage that kind of thinking.

With respect to Russia, Russia has a historic interest in what was part of the former Soviet Union, so their concern is understandable. They maintain a vigorous bilateral relationship with the government of Turkmenistan. We acknowledge the importance of that relationship and respect the right of the Russian people to pursue their interests in Central Asia, given history. But, the same time, that is an enormously important region, as you think about the 21st century and the future of energy development and the potential in that region, the possibility of a real economic renaissance in that region. And why we stress democracy, respect for institutions of market economics is precisely because that is what will lend stability to a region that has so often been the source of conflict.

Q There was a column in the paper today that suggested that the administration is thinking about toning down its rhetoric toward Iraq as a way of avoiding the brinksmanship of the past winter. Do you accept that?

MR. MCCURRY: We accept the fact that it was necessary to marry a significant deployment of force, which is still in the Gulf region, to achieve what were the important objectives the international community had with respect to the weapons of mass destruction programs in Iraq.

That situation has changed only in that the government of Iraq has been more compliant in allowing necessary inspections. They have not been fully compliant in meeting the stipulations of existing U.N. Security Council resolutions, and for that reason there is no change in our force posture in the region, nor likely will there be any time in the immediate future, and we will have to continue to be very vigilant as we meet our objectives -- at the same time, working to find ways in which we can increase compliance by the government is an important objective that we share with other members of the Security Council, and we will pursue in that strategy.

Q Does that mean you're toning down your rhetoric, even though you're not changing the force posture?

MR. MCCURRY: Our rhetoric is -- (laughter) -- our rhetoric is related to what the government of Iraq does; it's actions, not rhetoric, that count.

Q Deeds, not words?

Q So does that mean that -- the rhetoric is quieter, that means you're happier about their actions?

MR. MCCURRY: It means that there has been some compliance. There have been UNSCOM inspections. But there also has been what is largely a very unsatisfactory report on the kind of progress the government of Iraq is making in meeting the requirements that the U.N. has placed on the government of Iraq.

Q Do they remain in risk of a military strike led by the United States if they don't comply fully with the U.N. resolutions?

MR. MCCURRY: We remain in a position to use the necessary means at our disposal to achieve the objectives of the international community.

Q Mike, do you have any quarrel with the Washington Post account today of how the needle exchange policy was modified?

MR. MCCURRY: I haven't looked at it in great detail. I think that -- I would say only this, I would say that Secretary Shalala, who we were in constant contact with over the weekend, knew exactly where the decision-making process was, and I think she herself was wrestling with the decisions. Now, some down in the bureaucracy at HHS may have been launched off in a different direction, but that certainly wasn't the disposition of the Secretary.

Q Did the White House compel her to do a 180 at the last minute on Monday morning before she announced her decision?

MR. MCCURRY: No, she was a vigorous participant in the decision-making process, and I think was struggling to craft the best policy and the right policy herself, clearly with input from us too.

Q On which side was her vigor directed until the last moment?

MR. MCCURRY: She was in a careful evaluation of the options that were under discussion, and which remain under discussion, and which she herself helped fashion. If you talk to her, you will hear her say that.

Q Do you acknowledge that the fact that there would have been an uproar on the Hill if you had allowed federal funding for needles, that that played a role?

MR. MCCURRY: Not an uproar. There would have been a flat-out action by Congress to cut the funding and a real risk to what science tells us may be a productive way to approach these problems at the local level.

Q Mike, do you anticipate that the President would talk about the science or encourage the concept of the science to support this in communities that want to do it?

MR. MCCURRY: The President may elect to address that in the same way Secretary Shalala does, but certainly the administration talks exactly about that, that what we have found now and what the science shows is that there is utility with respect to needle exchange when it comes to prevention and treatment of HIV-AIDS, and it can be done with no apparent immediate negative consequences on drug use.

But it depends on strong local support. It depends upon the availability of treatment programs and HIV-AIDS programs that are comprehensive in nature. And they can only arise and be available to the degree that communities get behind that kind of approach; that may not be the proper strategy in every single community. And that's why I think that our decision allows the science to govern when local communities make their decisions, but does not attempt to nationalize any solution by requiring certain stipulations in exchange for federal funding.

Q Do you know, Mike, if it remains the White House's policy or position that the invocation of executive privilege requires the President's personal authority or clearance?

MR. MCCURRY: I'd have to ask our lawyers that or the Counsel's Office. You may want to ask Jim Kennedy and get a judgment from him on that.

Q Do you know if the IMF's funding is going to get left out of the supplemental spending bill? How's the administration responding to that?

MR. MCCURRY: Well, we really need to -- that's a source of very real concern to us and one of the reasons why we have been pressing hard for inclusion of that funding within the IMF facility -- or within the supplemental -- because what we're doing through the IMF with respect to the stabilization of regional economies in Asia is vitally important to hundreds of thousands, if not millions, of American families who are involved one way or another in commerce with the Asia region. And I think it is very short-sighted of Congress not to move forward on the type of resource availability for the borrowing arrangements that the international financial institutions need, including the IMF. And we have pressed very hard for them to make the necessary funding available.

Q Will you intervene -- will the President intervene with the IMF to encourage the kind of greater transparency that Republicans say is needed?

MR. MCCURRY: Well, we have strongly supported some of the reforms, some of the kinds of things for transparency and accessibility that have been argued. That have been the administration policy, and the IMF, itself, has been doing things with respect to that.

Q But they have been recalcitrant, right, with people demanding the release of these documents?

MR. MCCURRY: Well, I'd have to check on that. I don't know if we express any lack of satisfaction with some of the things they've done. They've done a great deal to meet some of the concerns that are legitimately expressed by some members of Congress. But that tends to look like it's just some excuse not to make the necessary commitment of funds, which we're going to have to do.

Q Mike, on Josh's question, it's always been your longstanding position from the podium that only the President can invoke executive privilege. There has been no change in that to your knowledge, right?

MR. MCCURRY: There's no change to that to my knowledge, but I am not sufficiently aware of what this litigation is about that I read about that involves the Secret Service and how that may or may not impact. I think it would be better for Jim Kennedy to talk to some of our lawyers and sort that out for you. I just don't know.

Q Mike, I'm still confused. Are you saying that Shalala's position initially was for funding a needle exchange, against funding, or undecided?

MR. MCCURRY: I think she was -- her position was developing as she tried to craft good policy options to be available for the White House. They clearly involve the decision that we made, they clearly involve some prospect for demonstration projects. But I don't think she, herself, was settled or decided on the matter going into the weekend, and certainly didn't got to work Monday morning confident that the decision had been made one way or another, because we told her it hadn't been.

Q Now I'm further confused on the privilege question. I thought you had said previously that White House lawyers were taking no role whatsoever in the Secret Service issue.

MR. MCCURRY: That's correct. All I am suggesting, James, is that I've read news articles that suggest to me that this may be some variant of executive privilege. I'm saying I don't know; I don't know whether that's true, or not. And what I said before about any role that we have taken with respect to that litigation is exactly as I told you that. We played no role in the deliberations and have not been a party in the deliberations between the Justice Department and Treasury as they've dealt with whatever motions may or may not have been filed by the OIC.

Q Mike, how's that possible presidential news conference coming along?

MR. MCCURRY: It's coming along.

Q Maybe next week?

MR. MCCURRY: I don't have anything for you on that right now.

Q Thank you.

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