Gaggle of the Press Secretary aboard Air Force One en route Puerto Rico

10:57 A.M. EDT

        MR. CARNEY:  Everyone ready?  Good morning.  Thanks for being here.  Before I take your questions I just wanted to let you know that the President not long ago finished a phone call with Prime Minister Erdogan of Turkey.  He called to congratulate the Prime Minister on his party's recent victory in parliamentary elections.

        Other than that, I would note that the Vice President's negotiations with members of Congress on the deficit reduction plans continue today at 2:00 p.m.  And that is all I have for you.  Fire away.

        Q    During that phone conversation did they talk about Syria and the –

        MR. CARNEY:  We may have a readout later, but my understanding is this was a fairly brief congratulatory phone call.

        Q    Can you tell us what the agenda is for today, what they're going to discuss?

        MR. CARNEY:  As you know, Alister, we have carefully abided by our commitment and I believe the commitment shared by other members in the room not to get into specifics about what's happening and what the topics are in the negotiating room, precisely because we think that enhances the chances that they'll produce a resolution and an agreement.

        Q    Can you talk much, Jay, about why the President is traveling to Puerto Rico?  What is his trip about?

        MR. CARNEY:  The President looks very much forward to making the first official visit of a President of the United States to Puerto Rico in 50 years.  The last time was when President John F. Kennedy visited the island in 1961.  Obviously there are Puerto Ricans who contribute to the United States both who live on the island and — 4 million on the island, 4 million on mainland — and he is very interested and looking forward to talking to them, and talking to leaders on the island.

        As you know, the President, in December of 2009, renewed the President's — let me get the name right — the President's Task Force on Puerto Rico's Status.  He signed an executive order to renew that and to expand it so that the task force would look not only at issues of Puerto Rico's status, which is obviously of great interest and concern to Puerto Ricans, but also to economic issues, because Puerto Rico, as you know, was hit hard by the recession, and the President wanted to expand the task force's mandate to look at economic issues.

        So that task force provided a report to him in March — if you don't have it probably in your materials, the letter he wrote, the attachment that went with it — but the President noted that the task force provided an important road map to addressing the concerns and aspirations of the Puerto Rican people regarding their status.  So he thinks that's been an important contribution.

        Q    Could you also talk to us about immigration?  Where do we stand with comprehensive immigration reform?  Is that likely to come up on this visit?

        MR. CARNEY:  I don't believe that immigration is a planned topic of conversation, but of course, in his meetings with leaders here that could arise.  Obviously, as you know, Puerto Ricans themselves don't have issues of immigration.  They're free to — those who live on the island are free to travel to the mainland and are citizens.  So the — but obviously that could be a topic.

        In terms of the status of comprehensive immigration reform, the President continues to push very hard for and continues to work through different agencies and through the White House to energize people who are committed to it and hopes very much that Congress will address comprehensive immigration reform in the bipartisan manner and with the bipartisan support it once enjoyed.

        Q    On the debt talks — yesterday in his interview with NBC he said that — he said, I don't want to see the United States default on our obligations.  And he said that we could see a reprise of the financial crisis if we play this too close to the line.  So is each day that we get closer to August 2nd, does the President think that there is a greater possibility that the debt ceiling won’t be raised?

        MR. CARNEY:  Well, as a matter of the ineluctable march of time, I think the answer is, yes, that the closer you get to the deadline, the closer you get to the possibility of default.  However, the President –

        Q    But does that mean he’s losing confidence –

        MR. CARNEY:  No, no.  The second part of my answer is that the logical answer to your question is, of course, the closer we get, the greater the risk.  The second part is the President does believe and takes — as I think he said in the interview yesterday — that he takes the words of congressional leaders seriously that they are committed to ensuring that we do not default on our obligations, and Congress will take this vote to ensure that we do not throw the U.S. and global economy into turmoil.

        Q    But he seems to be speaking more hypothetically about this now, as opposed to saying that he won’t let the United States default on its obligations.

        MR. CARNEY:  Well, I honestly wouldn’t read too much into that in the sense that he’s — I think he’s been very consistent. We’ve all been saying very much the same thing, which is it’s simply not an option to default and it’s — and we take the words of Republican and Democratic leaders in the Senate seriously when they say that we will raise the debt ceiling and fulfill our obligations.  

        And I would just remind people that the vote to raise the debt ceiling is not a vote for spending.  It is a vote to pay our debts, to pay our obligations.  And we are the largest economy in the world, the most important economy in the world, absolutely vital to the successful functioning of the financial markets.  And this is about being responsible.

        Q    Jay, in that interview, in talking about the budget talks, he also said that Republicans have a difficulty dealing with revenue issues.  And short of an overhaul of the tax system, which the Bowles-Simpson commission had discussed but which is a long-term process, what generally does the President look at as potential revenue enhancers that could emerge out of these budget negotiations?  Realizing you don’t want to be specific, but in terms of what are the areas that — where revenue exists?

        MR. CARNEY:  Again, making clear that I am not discussing what’s happening in the room, I think the President has, in the proposal he laid out at George Washington University, made fairly clear where we can find savings through the tax expenditures, and that includes, obviously, not extending again the Bush tax cuts  — unpaid-for Bush tax cuts — to the wealthiest Americans, millionaires and billionaires.  It includes ending the $4 billion subsidy to oil companies that we simply — you cannot plausibly argue that we need that subsidy when oil companies are reporting record profits and gas prices are as high as they are.  So those are two areas.

        But obviously there are others that — loopholes and others that are essentially spending through the tax code.  And the President believes that, again, with the example of — the big example being the oil company subsidies, that that kind of loophole should be closed.

        Q    Jay, yesterday during the Jobs and Competitiveness Council meeting, the President said that with the debt — with the deficit talks going on, he wants to make sure that the focus is still accelerating the recovery, and he wants to make sure that any compromise includes measures to do that.  Was he talking about making sure that that doesn’t make cuts to investments like education, infrastructure?  Or was he saying he wants it to include some of the proposals that he's talked about extending from the 2010 tax cut deal, like the payroll — extending like the payroll tax break, or the bonus depreciation measures?

        MR. CARNEY:  What the President has said about the latter issue is that he is open to ideas.  He believes that the employee side payroll tax cut has been an important factor in maintaining economic growth and producing the jobs creation, and that we should certainly look at whether or not that should be extended. That’s an idea.  And then others have talked about expanding it to include employer side, and again that’s an idea that’s been — that’s had bipartisan support in the past; it's certainly worth looking at.  Whether or not that’s part of the negotiations led by the Vice President I think is an open question that I’m not going to answer here.  

        The President does approach this with a singular concern, which is that the outcome of the deficit reduction talks produce a result that significantly reduces the deficit while doing no damage to the economic recovery and no damage to our progress in creating jobs — because if you get that balance right, the agreement itself will, he believes, instill confidence that Washington is getting control of its fiscal matters, and that that confidence will help encourage growth and encourage job creation, if you will, indirectly.  But the important — it is a vital concern of his that we not do anything through these deficit reduction talks that reverses the progress we’ve made, that slows growth or slows job creation.

        Q    Yesterday in the NBC interview, why did the President just not outright say that Anthony Weiner should resign?

        MR. CARNEY:  The President was asked this I think in a follow-up question.  I think he made clear that he has a lot of things on his plate, a lot of priorities and — that begin with, the economy, job creation, he mentioned Afghanistan, security of the United States and of Americans everywhere.  He expressed his point of view about how he views public service and if it were he, what he would do, but I don’t think I can improve upon the answer he gave.

        Q    Jay, on the IMF, the IMF has put forward two candidates, short-listed — French finance minister (inaudible.) Does the President endorse either one of these candidates?

        MR. CARNEY:  You have a peculiar Groundhog Day-like obsession with the — you might call it a fetish — with the — sorry, inappropriate word — but with who will be the next IMF head.  I don’t — we are where we were, which is we support a process that will produce the best possible candidate.

        Q    There was a story in The New York Times two days — or yesterday about a meeting he had with CEOs in the White House.  I don’t think that was on the public schedule.  Why would something like that not have been –

        MR. CARNEY:  I’m not aware — I don’t remember — I actually wasn’t in this position.  But what needs to be made clear is, contrary to suggestions otherwise, this was not a fundraiser.  And the fact that a President meets with his supporters in the business arena to solicit ideas about how to improve the economy is surely a dog-bites-man story.  It’s something that Presidents of both parties have always done.  So I don’t know what else to say about it.

        Q    Back to Puerto Rico.  As you know there’s 4.8 million Puerto Ricans in the mainland — a million more than in the island itself.  What’s the message of the — from the President to –

        MR. CARNEY:  The expert is correcting me.  

        Q    What’s the message to the people of the mainland, of Puerto Ricans in the mainland, that the President wants them to take –

        MR. CARNEY:  I think Puerto Ricans on the mainland care very deeply about the island, have relatives, have, in some cases, economic ties.  And I think he wants to convey the message to all Puerto Ricans that he is focused on Puerto Rico and its economic development, and on helping Puerto Ricans decide for themselves their status, because I think he made clear in the letter that is attached to the task force's report, that ultimately he believes that Puerto Ricans need to be — the process needs to be put in place that allows them to make the decisions about the island’s status going forward.  And I think that’s an issue that is of concern to Puerto Ricans not just living on the island but those living on the mainland.

        Q    How much of this is — is 2012 politics a part of this trip to the island?

        MR. CARNEY:  The President is making the first official visit since 1961 of a United States President to the island.  He thinks the issue of resolving its status is very important, of dealing with the economic hardships on the island are very important, and he’s very excited about being here.

        Q    So there's no –

        MR. CARNEY:  Well, as you know, on the schedule he’s got — he does have a campaign event, a political event, but there are many elements to this trip.

        Q    Last night Debbie Wasserman-Schultz said, we have turned this economy around, as she introduced the President.  Does he agree with that, this economy has been turned around?

        MR. CARNEY:  Well, again, going back to literal interpretations of that, when he took office, the economy was in a nosedive downward in terms of growth — severe contraction, something like 6.7 percent contraction in whichever quarter it was; the loss of over 600,000, and I think close to 700,000 jobs — maybe more than 700,000 in one month.  We have for the past seven quarters experienced economic growth.  That is a turnaround, reversing the direction of the economy, and obviously created more than 2.1 million private sector jobs.  Quite a turnaround from losing, hemorrhaging 700,000 jobs a month.  So I think it is absolutely correct that the trajectory of this economy has turned around.

        The President makes clear every time he talks about this that we are far from done, that we have a lot of work to do; that the hole that was dug by this recession, by the financial crisis and the greatest recession since the Great Depression is very deep; and that the — and took many years to dig and will take a significant amount of time to climb out of completely.  We lost 8 million jobs because of that recession.  And while the creation of more than 2 million private sector jobs is highly significant, it is not enough.  The math makes clear that that's not enough.

        And the President is focused every day — every day — on — it's a conversation he has most frequently with his team, jobs and the economy.  So I think it is both wholly accurate to say that we have turned around the trajectory of this economy, the President has since taking office, and entirely accurate to say that he will not rest until we have the right kind of economic growth in a sustained way that produces enough jobs so that every American who wants a job can find one.

        Q    Did the President watch last night’s Republican debate or any of the highlights from it?

        MR. CARNEY:  The President did not watch, as you know, since he was otherwise occupied.

        Q    It was replaying –

        MR. CARNEY:  And I’ve spoken to him this morning, and he did not see any of it.  I did not either work on or cover the campaign, but he never watched his own debates, so he’s not spending a lot of time watching other debates.  

        I would note as an observer, having caught up with the replay and the — that it was — I was struck by the fact that over the course of two hours, the phrase “middle class” and the word “education” did not pass anyone’s lips that I heard, which was striking to me because the middle class is obviously, to our mind, the primary focus of everything that we do in terms of the economic policies we pursue and the concerns we have.  The middle class not only suffered tremendously during the great recession and is suffering as we emerge from it, but was under a great deal of pressure even prior to the recession.  While incomes were growing rapidly under the previous administration and the economy was expanding, middle-class incomes were flat, stagnant, and even dropping.  So that was one observation.

        And another is that on — as the President talks about a lot, education could be "the" key, "the" defining element of whether or not the United States of America can compete globally in the 21st century — compete and win.  We think it’s a high, high priority.  And I was struck by the absence of attention to that very key issue last night.

        Q    Jay, you were talking earlier about the areas of savings in the tax code that the President is looking at.  Today, the Senate –

        MR. CARNEY:  — thinking about a very narrow tax hike on journalists, just to — there’s been an expansion in the market lately –

        Q    Does that still apply to you then?  (Laughter.)

        MR. CARNEY:  I’m already under — I’m under a pay freeze.

        Q    The President said yesterday he didn’t like taxes — having to pay taxes either.

        Q    Journalists aren’t people.  

        MR. CARNEY:  The President made clear that, as I think most Americans feel, he doesn’t like paying taxes.  Nobody does.  But he is committed to the growth of the American economy and the health and welfare of the American people.  And as he made the point as somebody who's been very fortunate and succeeded financially, that he does not need hundreds of thousands of dollars in additional income through tax cuts that would be paid for by seniors in the cost of their Medicare and health care going up dramatically.

        Q    Anyway, back to my question –

        MR. CARNEY:  Sorry, what was the question, sir?

        Q    The Senate today is voting on the elimination of an ethanol subsidy, and the White House opposes that.  And I wondered why isn’t that the kind of saving in the tax code that the President can support?

        MR. CARNEY:  Well, two things on that.  First of all, the President has a comprehensive energy policy and approach to this, and it's focused on the development of alternative fuels, domestically developed alternative fuels — it includes biofuels — also focusing on increasing domestic production of oil and gas, and on increasing efficiency in our automobiles, which is something we’ll see play out as new, more fuel-efficient cars begin to roll off the assembly line this year.

        On that specific issue, we are for reforming it, but we are not for repealing it.  And we are for reforming it in a way that can cut costs, but not for complete repeal.  

        Q    Leon Panetta went to Pakistan a couple of days ago –

        MR. CARNEY:  I read that somewhere, yeah.

        Q    Do you have any readout or any kind of briefing on how that went?  

        MR. CARNEY:  I don’t.  I think he’s — I saw some things that he said, I believe, but I don’t have anything for you on that.

        Anything else?  Muchas gracias.

        Q    De nada.

END 11:18 A.M. AST