12/15/16: White House Press Briefing

12/15/16: White House Press Briefing


Ms. Friedman: Good
afternoon, everyone — or morning — as it is. So before I turn this
over to our esteemed CEA Chairman, Jason Furman,
to talk about our eighth annual and final Economic
Report of the President, I thought I’d take a couple
minutes and just provide some context. And so Jason and I will
talk through the report a little bit and take a
few of your questions. And then we will turn it
over to Josh to continue with our regularly
scheduled programming. So as we’ve discussed many
times in this room, the incoming President
campaigned on a very different approach than
President Obama, so we don’t need to rehash
all of that here. But one way to think about
this final Economic Report is as a comprehensive
scoreboard of the economic progress over the
past eight years. And so this breezy,
594-page report — (laughter) — that the Chairman is holding is based on facts and data,
and it tells the story of the significant progress
that we’ve seen and that can and should be used as
a benchmark for future administrations. So Jason will go into all
this in greater detail, with some slides to
follow, but a quick primer for all of you on
how far we’ve come. First, when the President
took office, as you know, we were losing nearly
800,000 jobs per month. Now we’ve added an average
of nearly 200,000 jobs per month for more than six
years, which is the longest streak of total
job growth on record. You’ll recall that in
2012 we had presidential candidates making campaign
promises to get the unemployment rate below
6 percent by 2016. Today we’ve far
surpassed that, with the unemployment rate cut by
more than half to 4.6 percent. And meanwhile,
middle-class incomes rose at the fastest rate on
record last year, up $2,800 for the
typical household. The number of people
in poverty fell by 3.5 million. That’s the largest
one-year drop in the poverty rate
since the 1960s. And all the while the S&P
500 has tripled since the lows reached in
March of 2009. So you’ve all heard about
the President’s approach to our economy,between
growing from the middle out, building an economy
that works for everyone. You know that this has
meant restoring higher tax rates on the wealthy so
they pay more of their fair share. It’s meant a relentless
focus on creating good jobs and raising wages. It’s meant taking concrete
steps to make college more affordable for every
college student and their families. And it’s meant a new
cop on the beat in the Consumer Financial
Protection Bureau, fighting to protect
consumers from abuse and putting nearly $12 billion back in consumers’ pockets. And so this report shows that that approach is working. Now, I’ll remind you there
are number of policies that the President
proposed that would have done even more, and while,
historically, a number of these policies have
enjoyed broad bipartisan support, in this
Republican-led Congress they will instead go down in history as missed opportunities. Take, for example,
expanding the Earned Income Tax Credit for
childless workers, which would directly reduce
hardship for more than 13 million low-income workers struggling to make ends meet. Passing the Trans-Pacific
Partnership would have boosted incomes by $131
billion, not to mention cementing America’s leadership in the Asia Pacific. Raising the federal
minimum wage to $12 an hour would have boosted
wages for nearly 35 million workers, more
than one in four working Americans, according to an
analysis of the Economic Policy Institute. There are many more,
but you get the point. And so the final piece and
context that I would urge you to consider, both
today as you listen to this presentation, and
going forward as you evaluate the next
President, is that much of this progress is the
result of the tough choices this President
made early on, and he put this country ahead of
politics and he faced serious political
headwinds. So take, for example, the
auto industry rescue. Clearly there was a lot of
opposition to that at the time, and it ended up saving more than 1 million jobs. And now the auto industry
has added nearly 700,000 new jobs since 2009. Domestic auto production
has hit record highs. He took swift action to
stabilize our financial system while securing more
than $1.4 trillion in support for our economy
at a time when many were trying to turn stimulus
into a dirty word. So how did these
decisions play out? Republicans said the ACA
and Wall Street reform would kills jobs. But instead we’ve seen the
longest streak of total job growth on record. They said the President’s
climate and clean energy policies would
drive up gas prices. And instead we’ve seen low
gas prices driven in part by increased domestic
energy production. They said raising taxes on
the wealthy would crush our economy. And instead the stock
market is surging, profits are up, and incomes are
rising across the board. So this time, eight years
ago, when the President took office, he was facing
the worst economic crisis since the Great
Depression. And we weren’t talking
about record streaks of job growth or the fastest
income growth on record; we were teetering on
the edge of abyss. Now, that is a seriously
far cry from the highly beneficial financial
system and situation that this President-elect
is inheriting. So, at some point a few
years from now, you’ll be seeing some new faces
at this podium who will outline for you all
of what the Trump administration’s economic
strategy has been and the approach that
they have taken. You’ll have an opportunity
to evaluate the impact of their policies and rely on
the same economic data and metrics that you see
now to judge how their approach has worked. And as you sit here in the
future, in the seats that you assign yourselves — (laughter) — we urge you draw your conclusions based on data and facts, like the one in this
year’s Economic Report. So with that long windup,
I will turn it over to the Chairman to arm you with
all the data to sound smart at your holiday
parties and to evaluate the next administration. So, over to the Chairman. Mr. Furman:
Thank you, Jen. Thanks all for
coming here. We’re very proud of the
71st Economic Report of the President, the eighth
in this administration, and — I apologize to all
of you — the longest one ever. But it took 594 pages
to document both what’s happened in the last eight
years, but also to try to understand the direct
role that the President’s policies have played
in what’s happened. I understood there were
going to be slides, but if somebody can advance them
for me and go to the first slide. It gets to what Jen said,
and this is a point we’ve made many times before —
that I remember sitting in the transition office
eight years ago when we were losing hundreds of
thousands of jobs a month. At the time, the estimates
actually underestimated what we subsequently
learned to be 800,000 jobs per month. And then we’ve seen since
then a record streak of job creation with more than 15.5 million jobs created. And it’s all too easy to,
in retrospect, see that as something inevitable
and natural that just happened, but it
was anything but. As the next slide shows
you, the shock that precipitated this job loss
was much more severe than the shock that led to
the Great Depression. In the Great Depression, 2
percent of wealth was lost as a result of the crash
in the stock market and the fall in home prices. In this crisis, it was
precipitated by an 18 percent loss of wealth
because home ownership was much more widespread and
house prices fell even more. Economists have studied
financial crises around the world, and they
usually end up looking more like the Great
Depression, with a prolonged decade
of extremely high unemployment, of output
not returning to its trend. And, indeed, that’s what
we saw in the wake of this financial crisis in Europe
and other countries around the world that still have
not gotten back to where they were before
the crisis. The United States has done
much better than that historical benchmark,
better than other countries around
the world. And that’s because of a
range of policies — one of which I would highlight
on the next slide, which is, within a month of
taking office, on February 17, 2009, the President
signed into law the Recovery Act. That was the
single-largest fiscal measure as a share
of GDP ever done. It was larger than any
single fiscal measure to respond to the
Great Depression. But what a lot of people
realize is we didn’t finish there. After that, we did 12
subsequent pieces of fiscal legislation,
including payroll tax cut, unemployment insurance,
support for homeowners, investments infrastructure
that together added up to those orange bands, which,
along with the automatic stabilizers, was a larger
fiscal response and a faster fiscal response
than you saw in any of the other major economies
in the world. That complemented the
monetary policy response. The financial rescue,
which, as Jen said, was not popular at the time,
but we’ve gotten every dollar back and more that
we put into the banks, and saved the
financial system. And then the auto rescue
that prevented the loss, potentially, of a million
manufacturing jobs not just in the auto industry, but the suppliers and associated. The result of this, you
see on the next slide, is that the unemployment rate
has consistently fallen. It’s fallen at or faster
than the rate that you’ve ever seen in any OECD
country in the wake of a run-up of the unemployment
rate of this nature. It’s consistently
outpaced forecasts. You see the forecast there
that was made in the 2010 that thought we’d never
get to a 5 percent unemployment rate, and
we’re now at 4.6 percent. This decline in the
unemployment rate, as you see in the next slide, has
followed the progression that you expect to see in
the economy, which is, first, we got GDP growth
in 2009, employment growth starting in 2010, and
then, starting at about 2013, wage growth
really picked up. And it has grown at an 18
percent faster annual rate since 2012 than it did in
the entire time from 1980 through 2007. And if you look at the
next slide, you can see that for this business
cycle as a whole, if you look as an economist would
like to, from the peak of the business cycle to the
present, or peak to peak for the past, wage growth
has been faster than any business cycle on record. Moreover, as we see in the
next slide, is wage growth has been broadly enjoyed
with very strong gains for the typical household. As Jen said, that’s the fastest gain ever recorded. And then even stronger
gains for households at the bottom of the
income distribution. As I said, a range of policies have contributed to this. It didn’t
automatically happen. One of those policies is
what you see on this next slide, which is that when
the President called for a higher minimum wage in his
State of the Union address at the beginning of 2013,
it was part of a very deliberate strategy that
he wanted Congress to raise the minimum wage,
but also wanted states, cities, businesses
to do it. And if you look at that
blue bar, that shows you the average value of the
state and federal minimum, which has actually gone
up, because 18 states and the District of Columbia
and more than 50 municipalities have followed the President’s call. Unfortunately, the federal
one has continued to be eroded by inflation. And you could get that
much more wage growth if that was raised. Another policy that has
been important and will be even more important in the
coming years and decades is shown on the next
slide, which is the large increase in investments in
college education, which we document in one of the
chapters of our report. In addition, as you see in
the next slide, we have an entire chapter on
inequality, and it documents the combination
of the Affordable Care Act, cutting taxes for
low-income families, especially low-income
families with children, and raising taxes on those
most able to afford it have resulted in a
historic reduction in after-tax income
inequality, the largest under any President on
record, with data going back to 1960, and the
largest investments in tackling inequality
since the Great Society. And as you saw, that’s
paying dividends. Finally, the report
includes an extensive analysis of the
Affordable Care Act. As you see in the next
slide — and lots of people are familiar with
the percentage of people without health insurance
has gone done dramatically to below 10 percent for
the first time on record. But as the slide after
this shows, this has really meant something to
everyone, not just the people who didn’t
have insurance. People who had insurance
get a range of protections like free prevention,
coverage from preexisting conditions, and no lifetime and annual limits. I’ve also seen a dramatic
slowdown in premium growth, and if you count
out-of-pocket costs, the slowdown has
been even larger. If you go to the last
slide, I would conclude by saying that none of
this was an accident. You can draw a direct line
between policies in areas that we haven’t had a
chance to talk about here, like financial reform,
climate change, macroeconomic policy,
health care, education — between not just the
outcomes that we have seen to date but also putting
the economy in a better position to have a more
stable financial system, slower health cost growth,
more competitive economy overall going forward. Ms. Friedman: Great,
thank you, Jason. So we have time to take
a few questions on this document here and then we’ll turn it over to Josh. Justin. The Press: I
have two things. The press was — Janet
Yellen said yesterday that you don’t need a big job
program or tax cuts right now, with the labor market
near full employment, and that additional debt
spending could be an even bigger risk to
the economy. I’m wondering if you agree
with that, and if you would encourage
President-elect Trump, therefore, to steer away
from some of the policies that you guys have
advocated over the last eight years. I’m also wondering, given
where we are at the late stage of this business
cycle, what you see the chances for a recession in
the next four years is. Mr. Furman: So in answer
to your first question, the economy I think is
almost all the way healed from the Great Recession. These have really
lasting consequences. Most of the other
countries affected by the global financial crisis
are not healed to the degree that we are. But our unemployment rate
is back to where it was before the crisis; a lot
of the other measures are. I think there’s probably
still some additional slack in terms of people
working part-time, and in participation,
but not a lot. What I think our economy
needs is more things that will increase our
productivity over the medium and long-run and
expand the potential of our economy. So we have, as Jen noted
in her introduction, proposed substantial
infrastructure spending. And last year, Congress
did a down payment on that — they did a five-year
infrastructure bill that was a 5 percent increase in inflation-adjusted terms. That was welcome
and that’s helping. That’s something we should
do more of going forward. But it’s important when
you do it, one, to make sure you’re getting actual
net new infrastructure out of it, and two, that
you’re not doing it at the expense of your medium
and long-run deficit. So the President also
explained exactly how he’d pay for that increase
in infrastructure. So a policy like that,
just in economics parlance, is something
that we think of a little bit less on the demand
side because we’re most of the way recovered, but
something that would help us expand aggregate
supply over time. In terms of your second
question, economists have studied this question, and
the way they like to put it is that business cycles
don’t die of old age — which if you’re a person
who’s older, you have a higher probability of
mortality in that year than a person
who’s younger. That’s not true of the economy and business cycles. If you look at where we
are right now, 70 percent of our economy is
consumer spending. The real wage increases I
showed you, the confidence that consumers have,
the fact that they’re deleveraged means that we
have a lot more potential in our economy
going forward. That, of course, does
require continuing to have sensible and sound
policies that have undergirded that
economic strength. The Press: Let me ask
you about inflation. The Fed raised interest
rates yesterday. They’re proposing to raise it several times next year. They seem to be looking
over the horizon and seeing inflation. Do you see
inflation out there? Mr. Furman: We have our
final forecast in the Economic Report, so you
can look up what we forecast inflation to be. It was pretty similar to
what the blue chip, which is gradually rising to
what the Fed has said its target is, which is 2
percent for inflation as measured by the PCE. But all the signs we have
seen is almost exactly what you’d want to see,
which is a process that’s been very gradual and
consistent with the goals that policymakers have set
out, again, unlike some other parts of the world,
which are still worried even about deflation. That’s a conversation we
haven’t had in the United States, and we haven’t had
for good reason, because of the economic
policies we’ve had. The Press: A totally
hypothetical — if the new administration were to
come in with bigger deficits, more deficit
spending, borrowing, et cetera, is that
more of a concern? Mr. Furman: I think we have made progress on the deficit. We’ve cut it from 10
percent to GDP to about 3 percent of GDP. If you look over the
medium and long run, it starts to creep back up
again, which is why we’ve put out a budget that
shows what you would do to continue to lower the
deficit over the medium and long term, keep it
on the path that we’ve already been on. And I think it would be
unwise to do something other than that. The economy needs
additional investments to help it grow, but those
shouldn’t be coming at the expense of a large and
costly reversing of the progress we’ve made on
getting the deficit down. The Press: One of the
biggest criticisms of Obamacare that’s used is
the cost, and yet you said that you’re now seeing the
lowest growth in premiums versus pre-Obamacare. Could you go
into that more? And why is that message
not more successful? Mr. Furman: I think once
people have read the chapter in here on health
care, which is 105 pages, they’ll all fully appreciate this set of points. The Press:
Nighttime reading. Mr. Furman:
All night long. (Laughter.) Pull an all-nighter and read it. But just to give you the
facts, if you look at health care prices, since
the Affordable Care Act they’ve grown at the
slowest pace health care prices have grown
in over 50 years. If you look at health care
costs per enrollee, they have slowed dramatically
in private insurance, Medicare and Medicaid. If you look at insurance
premiums, they’ve also slowed and are among the
lowest growth we’ve ever seen there. And if you include
out-of-pocket costs, it is the case that deductibles
have gone up — they were going up before the
Affordable Care Act — that’s continued to
happen, but people also now get free prevention
and get health insurance plans that have
out-of-pocket limits, which they didn’t
use to have. So you take all that into
account, and out-of-pocket payments have actually —
the growth of those has slowed as well. I think it’s certainly
the case that the health system is not perfect. People remain dissatisfied
with all sorts of aspects of it. And that is completely
understandable, and that’s why there’s a lot more
work that remains to be done. But the health system is
in much better shape in terms of both cost growth
and all the measures we have of quality as
well — for example, hospital-acquired
infections or readmissions have also come way down. And you can draw — and we
do here — a direct line between some of the
reforms we’ve made in Medicare and some of the
ways the private sector has mimicked and adopted
those reforms to really improve the health system. But, of course, people
want it to continue to be better, and that’s why a
lot more work remains to be done. The Press: I wanted to ask
about productivity and what — to kind of get an
idea of your theory of why it’s slowed, and how big
of a problem you think it is for the next
administration, what it might mean for living
standards going forward. Mr. Furman: So I think
you’re asking exactly the right question, and like
every question, somewhere in this 594 pages
is the answer. On productivity, the first
thing to understand is it’s been a global
phenomenon. You’ve seen productivity
growth slow everywhere. In fact, if you look at
the G7 economies, the United States has had
the fastest productivity growth of all of
the G7 economies. And that’s in part because
a lot of the tremendous innovation that we’ve seen
here — whether it’s in the tech industry, mobile,
computing, artificial intelligence, personalized
medicines, advanced materials, or all the
other things, some of which may continue to be
adding to in possibly a bigger way productivity
growth in the future. The problem that a lot of
the advanced economies have seen is a slowdown
of capital accumulation. A lot of that appears to
be a fallout from the very deep recession, and
something that you would expect to see in the wake
of something like that. And as capital investment
rebounds — which historically it has after
periods like this — you’d expect to see some
strengthening. That being said, if you
look at the underlying trends in the economy
that require more work, certainly productivity is
part of that, and that’s why we’ve done so
much to put forward infrastructure,
investments in science, expanding international
trade as a way to raise productivity through
agreements like the Trans-Pacific Partnership
and the like. The Press: Thanks. I just wanted to get you
to describe growth as a percentage of GDP. Would you call it robust? Would you call it
something less than that? And are you satisfied
with the rate of growth, especially given the
extensive jobs growth that we’ve seen over the last
eight years, and yet, as a percentage of GDP, I
wouldn’t say it’s exactly overwhelming. How would you describe it? Mr. Furman: The United
States has outpaced what you would expect after
just a massive financial crisis of the type we went
through just eight years ago — outpaced some of
the historical benchmarks, outpaced other countries
around the world. And, in particular, if you
look where it matters most to people, which is
the job market, the unemployment rate being
4.6 percent, more than 15 million jobs added, wages
growing at the fastest pace they have of any
expansion since the 1970s and growing even faster
for people at the middle and the bottom than for
those at the top, this is an economy that really
is generating gains for American families. Of course, a lot more
work remains to be done. Of course, we should be
raising the minimum wage, making investments to
raise productivity growth to do even better, but
you’d be building on what I would describe as a
very solid foundation. The Press: To push
back just a bit. As far as some communities
doing better than others, in particular, wage growth
among college graduates has certainly been on the
rise — we can go back to the 1970s — but for
those who are not college graduates, for those who
have two-year degrees and less, frankly, their wages have been relatively stagnant. I think you would at least
acknowledge that, would you not? And I guess the other part
of this is, given all the great reporting that we
just heard today and have heard consistently from
Josh and others, the American people sort of
didn’t feel that way back on November 8th. Is there this disconnect
because they’re not seeing it? Is it because you’re not
explaining it properly? Tell me where that is not
syncing up based on what you just showed. Mr. Furman: That was a lot
of different questions in one. I mean, I’d, first of all,
say, no, I actually don’t agree with your statement
about wage stagnation. If your statement is for
many, many decades there was wage stagnation
— absolutely. If you looked at that
previous chart, from 1980 through 2007,
wages grew at . 1 of a percent per
year for 27 years. If you look at the last
couple years, they’ve grown at nearly a percent
and a half per year. So you’re growing at
a much faster rate. Now, that’s not enough to
make up for 27 sub-par years in a row — or 27
sub-par years, on average. So there’s a lot more work
to dig out of a hole that was many decades
in the making. But I think it’s
indisputable that we’re moving very much in the
right direction and that you’re seeing larger
income gains for households at the tenth
percentile or the 50th percentile than you are
for households at the 90th percentile. So, again, that hasn’t
made up for several decades of problems,
but it’s been a quite remarkable reversal — the
fastest income gains for the typical household
ever recorded. In terms of people feeling
it, the data I look at on that is, are consumers confident? Yes. Are consumers
spending money? That’s one of the
strongest parts of our economy. People are essentially
voting when they go into a store or when they decide
whether to buy a house, and they’re voting yes and
voting their confidence in the economy. Ms. Friedman: Again, thank
you and for this final report. Mr. Earnest: Good
afternoon, everybody. Before we get started,
obviously I appreciate Jason and Jen offering
up the presentation. Today is a — as you get
towards the end of the administration, you have
to start acknowledging some departures. And today is a special day
in the briefing room, not just because it was Jen’s
first time behind the podium, but it also is
likely the last time that she’ll be attending a
White House briefing in person — at least with
this administration. She’ll be leaving the
administration at the end of the year. Jen, over the course
of her service to this President, has taken on
a variety of difficult assignments — and I don’t
just mean being my deputy. She’s also served at the
Department of Homeland Security, the Department
of Health and Human Services, and the
Department of Treasury. She took on assignments
at each of those agencies that they couldn’t find
anybody else to do because they didn’t have
confidence in anybody else’s ability
to handle it. And so they brought on
Jen to take on those challenges. And in each case, and
in each situation, she performed even better than
people assumed that she would. So to borrow some of the
economic parlance that we’ve been hearing, I am
certainly bullish about the prospects for Jen’s
career when she leaves the White House. But we all owe her a deep
debt of gratitude for her performance and service
to the country and to the administration. And as somebody who spent
five years serving as a deputy White House press
Secretary, I can’t think of anybody who has been
more effective and taken on more responsibility in
this role than Jen has. So, Jen, thank you. And we wish you well as
you pursue other things. (Applause.) With that out of the way, Kathleen, do you want to kick
us off here? The Press: Thanks, Josh. And thanks to Jen for
all your hard work. I want to just start with
the latest reports on the Russia hacking story. Has the White House been
told that Vladimir Putin was personally involved
in Russia’s attempts to interfere with
the election? Mr. Earnest: I do not have
an additional intelligence assessment to share
from the podium. As we’ve seen in the last
several days, there are officials in the
intelligence community who apparently are calling
all of you to anonymously share their thoughts and
conclusions and opinions. I think what is relevant
to this point is to consider the statement
that was made back on October 7th. This was the statement
that was issued by the intelligence community. It reflected the unanimous
opinion and conclusion of all 17 intelligence
agencies. And they reported publicly
that Russia was engaged in malicious cyber activity
to erode public confidence in our democracy. They included another
sentence that I believe is worth repeating, so let
me just read it here. That statement included in
part: “We believe, based on the scope and
sensitivity of these efforts, that only
Russia’s senior-most officials could have
authorized these activities.” That is
the statement from the intelligence community
that was made public on October 7th. At the risk of
editorializing, when I read that statement for
the first time in early October, I didn’t think it
was particularly subtle. The Press: You didn’t
think it was — Mr. Earnest: It was
particularly subtle. The Press: Oh. So are you confirming that
the White House believes that Vladimir Putin was
— Mr. Earnest: I’ve seen those reports. I’m not in a position
to confirm them. I’d refer you to the
intelligence community for their assessment. But their assessment that
they reported publicly on October 7th may give you
some insight into what they may be thinking. The Press: And since you
mentioned some of the officials being willing to
talk to the media, are you worried about leaks
on this issue? Mr. Earnest: Well, listen,
one of the challenges of any White House Press
Secretary, regardless of which administration
they’re serving in, is that they have a
responsibility of coming out here in public and
answering questions from all of you, on camera
and on the record. Others are allowed to offer their opinion anonymously. It’s a free country, and
that’s certainly what people are, to some
extent, allowed to do. In the past, you’ve heard
me express some concern about that habit. It’s particularly
concerning in those circumstances when people
are sharing information that’s classified
or sensitive. But this is not
a new phenomenon. It’s one that previous
press secretaries have held to deal with. It’s certainly something
that’s come up in the context of my tenure, and
I suspect that future White House press
secretaries will encounter the same thing. The Press: And then
on a different topic. We’re hearing a little bit
about how Donald Trump might — and his daughter
Ivanka — might have something of a different
arrangement in the White House, that she may move
into the East Wing and be something approaching the
— take on some of the First Lady’s role and
also an advisory role. I was wondering if you
could talk a little bit about how the President
and First Lady drew that line and sort of talk
about how they arranged their sort of
conversations on policy. Mr. Earnest: Look,
Presidents throughout our history have, in part
based on the structure of their family, put together
a system that works for them and works
for the country. Obviously, when Secretary
Clinton, for example, was First Lady, she had a
hands-on role in some policymaking efforts
here at the White House. Other First Ladies,
including Mrs. Obama, have refrained from engaging
at that level on a lot of policymaking. But what we have seen from
Mrs. Obama is an effort to focus on some priority
areas that are near and dear to her heart. And that includes offering
support to military families, giving more
girls in the United States and around the world
access to quality educational opportunities,
and, of course, encouraging Americans of
all ages to have a healthy and active lifestyle. She has pursued those
initiatives because of her interest in them,
personally. She’s also pursued the
progress on those issues, because she believes that
each of them is important to the country. And Mrs. Obama has
certainly established quite a legacy for the
effective and strategic and impactful use of the
attention and limelight that comes with serving as
First Lady, and she has directed that to
a lot of good use. And I certainly wish the
Trump family well as they figure out the best way to
design a system where they can do the same. Roberta. The Press: What kind of
government information was compromised, if
any, in the Yahoo! hack? How concerned is the White
House about the very large hack? And how likely are we to
see attribution provided by the government about
who’s responsible for that hack? Mr. Earnest: I can’t speak
from here to the potential scope of material that
could be vulnerable or may have been exfiltrated. What I can say is that the FBI is investigating this matter. There was a previously
reported breach that the FBI had previously
indicated that they were investigating, and they’re
investigating this situation, as well. So I’ll let them speak to
what they have found over the course of that
investigation thus far. When it comes to
attribution, the principle that our investigators and
the President’s national security team have applied
is to ensure that it wouldn’t undermine the
investigation to go public with some information
about what we have learned about the investigation. So, for example, we would
want to be sure that before we indicate
publicly who we believe or who the intelligence
community has concluded is responsible for the breach
we would want to make sure that revealing that
information didn’t undermine the ability the
investigators to learn more about what
had happened. So that will be the chief
criteria that will be used in determining how and
whether the FBI should make public who they have
concluded is responsible for this
particular breach. And that includes whether
it’s a state actor, a criminal organization,
or some other entity. The Press: Switching
topics, there have been some questions about the
deployment of the THAAD anti-missile system. Given the impeachment vote
in South Korea and, of course, the upcoming
change in administration here, I’m wondering if you
have any update on whether it will deploy as planned,
or whether there’s been a hold put on it. Mr. Earnest: I’m not aware
of any change in plans for the deployment of this
anti-ballistic missile battery in South Korea
based on some of the political turmoil that
we’ve seen in the Republic of Korea. Over the last couple of
months, as some of this political situation has
persisted, I’ve repeated our commitment to the
strength of the alliance between the United
States and South Korea. And our two countries have
been discussing for some time now the potential
deployment of additional equipment and technology
to South Korea that would ensure they can protect
themselves from the missile threat that
emanates from North Korea. And our commitment to the
safety and security of the South Korean people
has not changed. It is a commitment that
has persisted through transitions of the U.S. presidency. It is a commitment that
has persisted through transitions of the South
Korean presidency. And it’s our hope and
expectation that the U.S. commitment to that
alliance and support for the South Korean people,
even as they face this menacing threat from North
Korea, will not change, despite some of the
changes in government that are slated for the months ahead. Justin. The Press: I’m wondering
if you had any reaction to President Duterte saying
that he used to personally prowl the streets on a
motorcycle looking for a chance to kill criminals. Mr. Earnest: Those
comments are deeply troubling and they
certainly are at odds with the Philippine
government’s stated commitment to due
process and rule of law. The United States
continues to be concerned by the widespread reports
of extrajudicial killings by or at the behest of
government authorities in the Philippines. The United States strongly
supports the idea of a thorough, credible and
transparent investigation into these reports. The United States stands
with the people of the Philippines as they
confront the drug problem that’s having a negative
impact on the security situation in the country. And the United States
has provided significant security assistance
to assist in the investigation of those
crimes, and to assist the Filipino government in
handling this threat to their security. But we continue to believe
it’s critically important that the government in the
Philippines observe and even protect the basic
universal human rights that are central to that
democracy and ours. And that’s an important
principle and one that we believe is worth
upholding. The Press: We’ve had a
lot of conversations in different contexts in the
last couple days about whether the U.S. should have done more when
they see signs of trouble. Your reaction so far to
a range of comments from President Duterte has been
sort of to condemn them or to express concern, but
not to cut off U.S. support or change our
sort of relationship. What does he have to say
or do to prompt some sort of official reaction
from the U.S. beyond just
expression of concern? Mr. Earnest: Well, Justin,
what you have heard me say on a number of occasions
now is that we often hear rhetoric from President
Duterte or other senior officials in the
government of the Philippines vowing to
carry out radical changes in their policy of
cooperating with or investing in the
U.S.-Philippines alliance. In almost every situation,
that rhetoric has not been matched by action. And so you’ve also heard
me say in a variety of settings that we certainly
are paying attention to the words and comments
that are being expressed, but we’re paying more
careful attention to the actions. And that is certainly true
in this case with regard to our relationship
in the Philippines. And that’s why the United
States remains committed to working effectively
with the government in the Philippines to advance
our shared interests. And that’s everything from
the domestic security situation in the
Philippines, including the drug trade. It also relates to our
support for their efforts to find a diplomatic
resolution to some of the competing land claims
in the South China Sea. It also relates to some of
the economic and cultural ties between the United
States and the Philippines that extends back for
multiple generations. So this is an important
relationship and an important alliance, and
one that we believe is worth investing in because
it benefits not just the American people it also
benefits the people of the Philippines as well. The Press: Kellyanne
Conway was on TV this morning and said that
it was “incredibly irresponsible” for you
to have said that Donald Trump called for hacking
by Russia, and the defense is that some of Mr.
Trump’s supporters have said that he was
joking at the time and was speaking after the hack
had already occurred, so it’s not really relevant
to the situation. I’m wondering if you have
a reaction to what she said about your comments. Mr. Earnest: Me? (Laughter.) I do have some comments; I don’t think you’d be surprised
to hear that. Hard to know where to
start, but let me start with this. The primary defense —
well, first of all, it is just a fact — you all
have it on tape — that the Republican nominee for
President was encouraging Russia to hack his
opponent because he believed that that would
help his campaign. That’s not a
controversial statement. I’m not trying to be
argumentative, but I am trying to acknowledge
a basic fact. And all of you saw it. This is not in dispute. Now, I recognize that the
defense from the Trump campaign is that
he was joking. I don’t think anybody at
the White House thinks it’s funny that an
adversary of the United States engaged in
malicious cyber activity to destabilize
our democracy. That’s not a joke. Nobody at the White House
thought it was a joke. Nobody in the intelligence
community thought it was a joke. I’m not aware that any
members of Congress in either party that was
briefed on this matter multiple times dating back
to the summer thought it was a joke. Senator Rubio put out a
comment shortly before the election indicating
that he took it rather seriously. So I think that’s not a
particularly persuasive defense that’s being
mounted by the President-elect’s team. I’ll say two other
things about this. I know that they also
object to the idea, something that I said
yesterday, that somehow — I made the observation
yesterday that Mr. Trump was obviously aware of
the fact that Russia was engaged in malicious cyber
activity and that that malicious cyber activity
was having a negative impact on his opponent’s campaign and was boosting his. He’s not the only
person that knew that. That was something that
was being widely reported and was evident to anybody who was reading the newspaper. I don’t know exactly what
source he was using. He could have been
relying on news reports. Maybe somebody on Capitol
Hill who had been briefed about this matter had
informed him or his team about it. It’s also possible that he
consulted with one of his closest aides, Roger
Stone, who back in July — July 27th, to be precise
— tweeted “of course the Russians hacked
@HillaryClinton’s email.” So, again, I don’t know if
it was a staff meeting, or he had access to a
briefing, or he was just basing his assessment on a
large number of published reports, but Mr. Trump
obviously knew that Russia was engaged in malicious
cyber activity that was helping him and hurting Secretary Clinton’s campaign. And again, these are all
facts that are not in dispute. This is not a situation
where we are launching charges and
countercharges, or I’m offering up my opinion and
hoping that it will be considered more persuasive
than the opinion that’s offered up by
somebody else. These are just facts. And I know that we’ve
also heard from the President-elect’s team
that they’re concerned that there’s some effort
to delegitimize his presidency. Well, I think President
Obama has made clear, literally hours after the
votes were tabulated and reported, that he and his
team were committed to a smooth and effective
transition to the Trump administration, and all
of the available evidence about our actions since
then indicates how seriously the Obama
administration has fulfilled that
responsibility that we have. But there are others
on the outside who are raising these questions,
and apparently that is striking a nerve with the
President-elect’s team. One way to deal with that
is to start answering these questions, and not
just relying on a defense suggesting that the
rhetoric of the Republican nominee was a joke when
nobody thought it was funny. And there’s plenty of
evidence to indicate he knew exactly what he
was talking about. It might be time to not
attack the intelligence community, but actually be
supportive of a thorough, transparent, rigorous,
nonpolitical investigation into what exactly
happened, and to cooperate with it, and
to support it. But they’re probably not
that interested in advice from me, so — but I don’t
think I’m — I guess I am biased in saying that is
advice that I have to offer based on years of
experience and I think it would serve them well to follow it. Ron. The Press: So just to be
clear, when this malicious activity was detected,
what did the White House do about it? Anything? You often say the
statement was put out. Mr. Earnest: Well, this
is a statement that we — well, first of all,
this was thoroughly investigated and this was
included in The New York Times report that appeared
a couple days ago that sort of went through in
rigorous detail all of the work that was done to
investigate these hacks and these breaches. And the FBI, the
Department of Homeland Security, a variety of
intelligence agencies were all investigating to learn as much as they possibly could. There were extensive
briefings that were provided to Capitol Hill
dating back to the summer, and there was an effort to
learn as much as we could about what had happened. There also was an effort
that was undertaken by experts at the Department
of Homeland Security to fortify the elections
administration’s equipment of states and cities and
counties all across the country to make sure
that they could defend themselves against
potential Russian action that would manipulate the
vote count or at least interfere with people’s
ability to cast ballots. That was a significant
undertaking. We had to go and work with
local jurisdictions in all 50 states. And we also tried to build
strong political support on Capitol Hill among
Democrats and Republicans to send a clear signal to
Democrats and Republicans who were administering the
elections that this isn’t a partisan effort. And we did encounter
some resistance from Republicans to our efforts
to do that — Senator McConnell in particular. The Press: Beyond
reinforcing of the voting apparatus — Mr.
Earnest: That’s not an insignificant proposition
because that is central to our democracy. And it is a lot of work
because it’s not — we don’t just go
to one agency. We have to go to agencies
in 50 states in order to get that done — some
agencies that are skeptical and suspicious
of the motives of the federal government. But yet we did
succeed in that. And what the intelligence
agencies concluded is that there was no increase in
malicious cyber activity on the part of the
Russians that did succeed on Election Day in
preventing people from voting or preventing
those votes from being accurately counted. The Press: But did the
United States retaliate against Russia for this? Mr. Earnest: The President
determined once the intelligence community had
reached this assessment that a proportional
response was appropriate. But at this point, I don’t
have anything to say about whether or not that
response has been carried out or whether additional responses could be deployed. The Press: All right. And that’s the question,
is how can it be effective if, in fact, we don’t know whether it happened or not? Will the Russians know
when it happened and that it happened? Mr. Earnest: Listen, Ron,
I’m just not going to be in a position to talk
about potential responses. And I know that’s
frustrating. What I can tell you is
that there may be an opportunity in the future
where we can talk in more detail about what the
responses is, has been, or will be. The Press: But tell me
how the response can be effective unless it’s —
if it’s not made public. Mr. Earnest: Well, that’s
a difficult question to answer because the
United States retains significant, extensive
cyber capabilities that exceed the capabilities
that are wielded by any other country
in the world. And to detail those cyber
capabilities would be to potentially undermine
our ability to use them. So, unfortunately, that’s
not something that I can discuss from here. But there are a range of
proportional responses that the President and his
team believe would be an appropriate response. The Press: And just back
to the statement of October about the highest
levels of the Russian government being
responsible for this — was that intentionally
worded to point a finger at Vladimir Putin? Mr. Earnest: This is a
statement that was written by the intelligence
community and the Department of Homeland
Security, so you should ask them exactly what
their intent was. But my reading of it was
that it was not intended to be subtle. But that’s based on
my reading of it. You’d have to ask them
what they — The Press: So it points a finger
at Vladimir Putin. Mr. Earnest: Again, you’d
have to ask them what their intent was. The Press: Is that your
interpretation of this? Mr. Earnest: Well, I
guess the reference to senior-most officials in
Russia would lead me to conclude that, based on my
personal reading and not based on any knowledge
that I have that may be classified or otherwise,
pretty obvious that they were referring to the
senior-most government official in Russia. The Press: Last one. The Russians say that this
is laughable, this is nonsense that they did
this, that their President was involved
in any of this. What’s your
response to that? Mr. Earnest: I’m not surprised. Kevin. The Press: I want to
ask you about Planned Parenthood and the White
House’s effort to ensure their funding. And I’m curious if
you could explain, in particular, for the
Americans who are well aware of the fact that the
federal government cannot legally fund abortions,
with the exception of rape, incest or the
endangerment of the life of the mother, why the
President did what he did, and how did he go
about doing it? Without getting too much
into the weeds on Title X. Mr. Earnest: Well, the
Obama administration did implement a rule that
essentially prevents the federal government from
discriminating against specific service
providers. And again, I think this
goes back to a principle that really should
resonate with a lot of conservatives. The Obama administration
is suggesting that the federal government
shouldn’t be getting in the way of people getting
access to quality, affordable health
insurance, or quality, affordable health care. And Planned Parenthood
is an organization that provides extensive health
care services to men and women in communities,
large and small, all across the country. That’s just a fact. What the Obama
administration has also done is carefully followed
the law to ensure that we are abiding by this
longstanding rule that prevents federal funding
of abortions, with the exceptions that
you outlined. And that is consistent
with the law that’s on the books. It’s also consistent with
a principle that we have prioritized, which is that
getting access to quality health care is not a
privilege, it’s a right. And we want to make it
possible for as many people as possible to get
access to that health care. And that’s the idea
behind this rule. The Press: But there are
those, in particular in the states that feel like
this is an egregious overreach by the
administration, that feel like this should be a
state’s issue that they can certainly handle
without this added layer from the federal
government. What would you
say to them? Mr. Earnest: I would say
to that that we’re talking about federal funding
and what the federal government can do with
that federal funding. And so this is actually
empowering patients to make their own choices
about their health care. And that is a principle
that conservatives — that should really resonate
with conservatives. And I guess I’ll leave it
to them to explain why it doesn’t. The Press: Last, I just
want to — a little bit far afield, but I was
reading an interesting piece that accused the
President of being so focused on creating the
Iran nuclear deal that he in effect took his eye
off the ball, or was less focused on other issues
abroad, in particular the growing threat from Iran
and perhaps even Russia. What would you — or
rather Russia and China, I should say. What would you say to
critics who feel like the President was so dead-set
on making history and propping up the Iran
nuclear deal and pushing it over the finish line
that he didn’t see, perhaps, or react as
quickly to threats from Russia in particular. We can use the cyber threat as just one example of that. Mr. Earnest: Well, I
didn’t see the argument that was made in the piece
that you’ve referenced, but I think, in general,
what I would say is simply that the successful
implementation of the international agreement
to prevent Iran from obtaining a nuclear weapon
was not just a major national security priority
of the United States, it was a major national
security priority of some of our closest allies and
partners in the region and around the world. Israel was deeply
concerned about the prospect of Iran getting
their hands on nuclear weapons. Saudi Arabia and other
counties in the Gulf were also deeply concerned
about this prospect. There were countries in
Europe who are within range of some of Iran’s
ballistic missile capabilities, were deeply
concerned about the prospect that Iran could
put one of those nuclear weapons on top of one of
those ballistic missiles. So preventing Iran from
obtaining that nuclear weapon wasn’t just
a priority of the President’s, it was
a priority of the international community’s. And I would just point out
that when President Obama took office, that
was the case. The international
community was fractured in terms of trying to design
a strategy that would successfully prevent them from getting a nuclear weapon. So President Obama didn’t
just have to identify the priority, he actually
had to organize the international community
to go and achieve it. And that’s exactly
what we’ve done. And that is — The Press:
Did it distract him, though, from the focus
on Russia and China? In particular, when you
look at some of the things that happened — Russia
running off into Ukraine and whatnot, and China
with the South China Sea. Did it at least in part
take his focus off those things? Would you reject
that notion? Mr. Earnest: I would
utterly reject that notion as not being an accurate description of the situation. The Press: Okay, last one. You looked like you were
chopping at the bit when I asked Jason about why it
didn’t seem to resonate, some of the great numbers
that you all have been touting. Month after month after
month, we talked about job growth, and yet for some
reason, at least among many of the working-class,
they don’t feel that. Did you sense that? And if you did, where
was the disconnect? Was it a lack
of messaging? Was it a lack of
understanding how great things are for them? You tell me. Mr. Earnest: Well, listen,
I think the reason that I reacted is I’m not sure
there’s much evidence to indicate that a lot of
people supported Mr. Trump because they had more
confidence in his economic policies than they
did the President’s. The Press: I wouldn’t
make that connection. I was suggesting that
given what we hear here often, what seems to have
been missing in terms of — I mean, at least in
theory you would say, hey, listen, the economy is
going great, people should really — that should
really resonate with people and they should be
ready to run up the hill and continue the policies. Mr. Earnest: Unless they
were just voting on something else. And I think that’s my
suggestion, is that they had other things that were
influencing their decision about who to vote for. And I think that’s a
testament to the strength of the economy that
President Obama has presided over, and I think
it’s a testament to the strong public support that
exists for the economic strategy that
we have pursued. And I’m not surprised that
there’s strong public support for our economic
strategy because the benefits of our economic
strategy are obvious and widely felt. Steven. Nice to see you. Welcome to your new seat. The Press: Thank you. Mark Knoller pointed out
this morning that Barack Obama has never, before
now, allowed a bill to become law without
his signature. So why did he not sign the Iran Sanctions Extension Act? And were you aware? The National Archives
tells us it hasn’t happened since
December of 1995. Mr. Earnest: It’s
been a long time. It is — well, let me go
through some basics here, and then I’ll
explain the decision. We’ve been saying for
quite some time that it is not necessary to extend
the Iran Sanctions Act because the executive
branch, the Obama administration retains all
of the needed executive authority to implement
sanctions against Iran. We have the authority to
waive those sanctions, which we did, in
the context of the international agreement
to prevent Iran from obtaining a
nuclear weapon. We have the ability to
implement and ramp up sanctions against Iran
for their destabilizing activity in the Middle
East, for the development of their missile program,
for their support for terrorism, for their lack
of respect for basic human rights. And we have used that
authority even since the international agreement
to prevent Iran from obtaining a nuclear
weapon was implemented. Because of our significant
concern about some of those activities, we also
have all the executive authority that we need to
snap sanctions back into place if Iran violates the
international agreement to prevent Iran from obtaining a nuclear weapon. So we retain all of the
authorities that we need to carry out this policy,
and that is why we have said for more than a year
that the extension of the Iran Sanctions Act
was unnecessary. Now, at the same time, on
the other side, a clean extension of the Iran
Sanctions Act, like the one that landed on the
President’s desk, is consistent with our
commitments under the international agreement
to prevent Iran from obtaining a
nuclear weapon. That’s an important point
because the President was rather forward-leaning in
making clear that he would veto any effort to undermine the nuclear deal. This legislation does not undermine the nuclear deal. So we find ourselves in
a situation that I’m not sure that we’ve
encountered in eight years, which is that the
bill doesn’t meet the standard of something that
we would veto, but it’s also not something that
the administration believes is necessary. So the President made a
decision to allow that bill to become law
without his signature. But I will say that this
decision to allow the bill to become law without the
President’s signature is also part of a message
that we’re sending to Congress, and it’s simply
this: If Congress does blow up the deal that
prevents Iran from getting a nuclear weapon, they’re
going to have to deal with the consequences. And the consequences
are grave. And we have seen
irresponsible efforts on the part of some members
of Congress to advocate for and to write up
and submit pieces of legislation that would
violate the deal, that would cause the deal to
break up, that would, in all likelihood, prompt
Iran to kick inspectors out of their country. These are inspectors who
right now are keeping closer tabs on the Iranian
nuclear program than any other nuclear
program in the world. What they would also
precipitate by passing legislation that
undermines the deal, it would cause the
international coalition that we have built to
shatter, and it would be very difficult for the
United States to make the case to countries like
India and China and Japan that they should help us
enforce those sanctions. We would have a hard time
convincing them to help us enforce those sanctions
because the reason that the deal blew up is the fault of the United States Congress. So this is a — President
Obama is only in office here for another month. And after that, Congress
will have to deal with the consequences if they
choose to pursue irresponsible legislation
that would blow up the deal. Now, just to be
crystal-clear about this, the Iran Sanctions Act
is consistent with our commitments under the
international agreement, and the President did not
veto this bill because it does not undermine
the deal. But there’s been plenty
of rhetoric and plenty of legislative work done on
legislation that would blow up the deal. And this is a message
that if the United States Congress blows up the deal
that prevents Iran from obtaining a nuclear
weapon, they will have to deal with the grave
consequences that ensue. So thank you for indulging
me on the long answer. The Press: Tom Wheeler
announcing his departure from the FCC the day that President Obama leaves office. Is that the end
of net neutrality? What does it mean? Mr. Earnest: Well, listen,
President Obama has been pleased by the service
of Chairman Wheeler. He runs an independent
agency, so we are limited in how much we can say. But the President
appointed him to that job because he’s somebody
who’s a good manager and knew those issues well,
and certainly shared the President’s approach,
generally speaking, to dealing with some
of these issues. And obviously the next
President will have an opportunity to choose
someone that shares his view of these issues. And maybe the
President-elect was meeting with one of them
yesterday when he sat down with tech executives from
all over the country. Maybe one of them would be
interested in taking this job. We’ll see. Andrew. The Press: China seems to
have abandoned its pledge not to militarize features
in the South China Sea, with aerial photography
showing the deployment of anti-aircraft guns and
other weapons systems. I’m wondering if the
administration has a response. Mr. Earnest: I’ve seen
those reports, Andrew. I cannot confirm them
independently from here. I think the most direct
response comes from the joint declaration that
was signed by all of the leaders of the ASEAN
countries this past February at the summit
that President Obama held in Sunnylands. And that statement
affirmed, “the shared commitment to maintain
peace, security and stability in the region,
ensuring maritime security and safety, including
the rights of freedom of navigation and overflight
and other lawful uses of the seas, and unimpeded
lawful maritime commerce as described in
the 1982 U.N. Convention on the Law of
the Sea” — and this is the key part — “as well
as non-militarization and self-restraint in the
conduct of activities.” The United States has been
very clear that we make no independent claims to the
land features in the South China Sea. It is our view that
competing claims should be resolved not by might or
through military action, but rather through
diplomacy and negotiation. And that’s what we’re encouraging all parties to do. And we certainly, in
pursuit of that goal, are encouraging all parties to
refrain from the kinds of actions that would
heighten this tension and risk military conflict,
because our ultimate goal is a resolution
through diplomacy and negotiations. And the U.S. interest in this situation
is in protecting the free flow of commerce and the
freedom of navigation in this region of the world. Billions of dollars of
commerce transits this region regularly, and
disruption of that navigation could have a
negative impact on the global economy. And that, of course would
have a negative impact on the U.S. economy, and that’s our
chief interest here. The Press: A number of
European countries have summoned the ambassadors
of Russia and Iran over events in Syria. Obviously there’s no
Iranian ambassador, but does the administration
plan to do the same, or has it done the same? Mr. Earnest: I’m not aware
of a plan to do that, but if that’s something that
happens, we’ll let you know. Obviously U.S. diplomats have been in
close touch with Russian diplomats not just over
the last several days but over the last several
months on this issue, and I know that just
yesterday Secretary Kerry communicated in a phone
conversation with Foreign Minister Lavrov. So we don’t need to summon
the Russia ambassador to the United States to make
clear our deep concerns about the way that Russia has conducted themselves in Syria. The Press: And a
final question. A few days ago the U.S. introduced sanctions
against some officials in the Democratic Republic of
Congo over the delay of elections. Bloomberg today had
a report on pretty staggering levels of
wealth and assets accumulated by Kabila
and his family. So I was wondering
if those assets and individuals could be the
target of sanctions should Kabila decide to stay in office against the constitution? Mr. Earnest: Andrew, just
to make sure you get an accurate answer to your
question, I’m going to refer you to Treasury
Department for the details about the way that those
sanctions are likely to be implemented. Michelle. The Press: Is sounds like
you have no dispute or quarrel with the
information that has been put out there on saying
that Vladimir Putin had a direct role in
the hacking. Mr. Earnest: I think what
I’m saying is there was — that I don’t have new
information to share from here, but there was an
October 7th statement from the intelligence community
that spoke pretty directly and, in my own personal
opinion, quite unsubtly, to this question. The Press: Okay. So — but you’re not
addressing whether those reports are accurate or
whether you have a problem with the accuracy of
any of those reports? Mr. Earnest: I’m not
discussing the accuracy of those reports. I’d refer you to the
intelligence community for their own assessment. They’re aware of the facts
firsthand and they can try to describe to you exactly
what their official view is of that circumstance. The Press: And let’s just
say that in a situation like this, if there is the
head of state directly involved in something of
this level, would that change the proportional
response that is formulated to
respond to it? Mr. Earnest: Well, it’s
difficult for me to talk about potential
response options. I think what I will say
is, as the President and his team consider
proportional responses, a wide variety of aspects
of the situation will be considered. Proportionality includes
things like the impact and the sophistication of the
attack — the malicious activity. So they’ll cast a wide net
in considering exactly what happened and
formulating an effective proportional response. I would acknowledge —
which may be what you’re thinking, –that designing
a proportional response seems inherently
subjective, and I would acknowledge that
that’s true. But it means the President
and the experts on his team using the best
knowledge at their disposal and their
knowledge of U.S. capabilities to determine
what would be appropriate. The Press: Does it make it
much more serious if the head of a state is
involved in something like this than not? Mr. Earnest: Well, again,
I think we’ve known for some time, since even
before the election, that senior -most Russian
officials were involved. So the U.S. intelligence community
recognized from the beginning how
serious this was. The Press: Okay. And you talked a couple of
times this week about the cyber capabilities, but
obviously they don’t prevent the hacking of an
individual’s email, and all of that taken
together, we’ve seen how it could potentially affect a presidential election. You also tried to convey
confidence a number of times leading up to the
election and after in the system. But if we see this happen
— like I think for many it’s hard to believe that
we’re even talking about this right now, and then
days later we have more word of another hack and
an unprecedented hack. So how can the American
people have confidence in elections that follow if
maybe the weakest link is going to be
somebody’s Yahoo! or Gmail account? Mr. Earnest: Well, how our
democracy responds to this situation is an important
question, and a question that the President and his
team is very focused on. And I would expect that
this is a question that the next administration
will have to carefully consider as well. As we stated in the
— as the intelligence community, just to be
precise, stated back in October, the goal of this
Russian effort was to erode public confidence
in our democracy. And that’s not an effort
that can be countered solely in cyberspace. It raises questions about
our democracy and about the kind of public debate
that we have in this country. It raises questions about
how the media handles information that’s been
the target of a hack and leak operation carried out
by an American adversary. It raises questions about
how American voters view the news media and view
the information that’s presented by
the news media. All these kinds of
questions are raised. The President retains
substantial confidence in the durability of our
democracy and in our system of government, and
in the ability of news organizations like yours
to respond to this challenge, but these are
the kinds of questions that have to be asked. The Press: And I mean part
of the debate and the harsh reactions leading up
the election surrounded over the statement that
the election was going to be rigged. It was said in a much
different context, but now we’re seeing this. Does it seem to you like
this election was rigged, except it was
rigged by Russia? Mr. Earnest: Well, again,
I feel the need to restate something I’ve said
before, so just bear with me on this, which is that
there was reason to be concerned on the part
of the intelligence communities about Russia
potentially attacking the election infrastructure of
the country in cyberspace. And that is why a focal
point of our efforts through the summer and
fall was to mobilize substantial federal
resources and to work to build political support
for a federal government effort to help cities,
counties, and states defend their elections
infrastructure from Russian hacking. And the good news is that
the intelligence community has reported that they did
not observe an increase in Russian malicious cyber
activity on Election Day that interfered with the
ability of anybody to cast a ballot or any election
official to count it accurately. So that is good news. That didn’t happen
by accident. That was not a foregone
conclusion back in early October. That was not a foregone conclusion in early November. The Press: But we’re
seeing that that may not matter, and maybe the
definition of rigged kind of depends on how
you’re looking at it. Mr. Earnest: Well, again,
it would matter had the Russians hacked it. So the reason I just keep
going back to this is because it’s important to
— and this sort of goes to Ron’s question earlier
about sort of what did the White House and the
government do — this was an effort that took place
behind the scenes, and it had to, I think for
obvious reasons, but we shouldn’t underestimate the outcome of that effort. But you’re asking a
somewhat different question that’s just as
legitimate, which is, even if the Department of
Homeland Security can mobilize all the resources
and work effectively with state and local officials
to protect our elections infrastructure,
isn’t there still a vulnerability that exists
when it comes to the way that the 300 million
people who live in this country consume
information? And, look, I think that these are difficult questions. And I think everybody
has got a role here, particularly the news
media, particularly citizens who are trying to
inform themselves and want to be good consumers
of information. But news organizations
have had to adapt to a changing news media
environment driven by technology for more
than a decade now. So I retain confidence,
I know the President continues to be confident,
that if these questions are asked and the answers
are carefully considered, that the U.S. system of democracy is
durable and strong enough to withstand some of these
changes and even withstand some of these threats. The Press: Related to this
case, we’re seeing the selective release of
information, we’re seeing reports that Vladimir
Putin himself determined how that information was
going to be released. We’re seeing, as you
termed it, a “surprise result” of the election. So does the administration
think that Russia has successfully rigged
this election? Mr. Earnest: And,
Michelle, what I’ve said about this in the past is
still true, that there are a lot of political
analysts who have cited a variety of reasons for the
surprising outcome of the election. And some of them say that
Russia’s malicious cyber activity weighed heavily
on the result; others discount it. Others suggest that
perhaps the public communication of FBI
Director Jim Comey about his bureau’s investigation
of Secretary Clinton’s email may have
tilted the outcome. There are others who have
suggested that Secretary Clinton was a flawed
candidate from the start who would never win. Others have suggested that
she didn’t pursue the right electoral strategy,
that she focused on the wrong states. Others have suggested that
she should have had a stronger message. Look, there are a variety
of potential explanations, and that’s more of a
question for analysts of politics than it is for analysts of intelligence. Kenneth. The Press: Josh, one
last question on Russian hacking. Just to clarify, to get it
on the record, was there a policy decision or even
influence to not mention Putin’s name in that
intelligence report? Mr. Earnest: Again,
for the wording that’s included in the statement
I’d refer you to the intelligence community. It was written by them. The Press: Also, I wanted
to ask about a tweet that President-elect Donald
Trump said this morning, which was, if Russia or
any entity was hacking, why did the White House
wait so long to act and why did they only complain
after Hillary Clinton? I know you addressed that
with Ron’s question, but with that criticism from
a tweet, from Conway’s criticism of you, is this
smooth transition, is it seeing a bump in
the road here? And what’s your comment
about — or reaction to that tweet from
President-elect Donald Trump? Mr. Earnest: I think
there’s just a simple fact that — I guess I’m going
to break with precedent here and actually respond
to a tweet from the President-elect just by
pointing to a simple fact, which is that there was a
statement that was issued by the intelligence
community on October 7th, a month before the
election, warning that Russia was engaged in
malicious cyber activity in an attempt to erode
confidence in our democracy. And it was obvious to
everyone who was paying attention, including the
gentleman whose thumbs authored that tweet,
that the impact of that malicious activity
benefitted the Trump campaign and hurt the
Clinton campaign. That is, after all, why
the President-elect called on Russia to hack
Secretary Clinton’s email. That is presumably why
the coverage of the hack-and-leak operation
that Russia carried out was focused on emails from
the Democratic Party and Clinton campaign staffers,
and not the Republican Party and Trump
campaign staffers. It wasn’t a secret. It’s obvious what
the impact was. There’s a separate
question about intent, and there are anonymous
figures in the intelligence community
that are weighing in all over the place, and I’m
not at liberty to do that from here. We’re going to rely on
intelligence assessments to try to get to the bottom of that if they can. But it’s not — the impact
of this operation is not in doubt. It’s not in doubt. It benefitted the Trump
campaign, and it hurt the Clinton campaign. That’s why the Republican
nominee was hoping they would do more of it. That’s why his staffers
were hoping that they would do more of it. That is why in the days
leading up to Election Day, the Republican
nominee himself was encouraging people to
check out WikiLeaks. He thought it would help
his campaign, and he knew that when people went to
WikiLeaks they weren’t going to find damaging
information about Steve Bannon or Reince
Preibus or the RNC. In fact, there’s only
evidence of one Republican being hacked and targeted
by this hack-and-leak operation, and that one
Republican was General Colin Powell, and the
only information that was released was him being
privately critical of Secretary Clinton. So there’s no subtlety. There’s no security
clearance required to figure out what happened. The Press: One more. The Trump team claims
that the President of the United States cannot have
any conflicts of interest by law. Does the White House
agree with that? And what steps were taken
for President Obama to avoid those potential
conflicts, besides a blind trust? Mr. Earnest: Well, I know
that there are a variety of ethical, legal experts
in both parties that have raised profound concerns
with that approach. President Obama, when he
took office, didn’t just vow to adhere to the
letter of the ethics laws, he went above and beyond
the letter of the ethics laws and actually
converted all of his financial holdings
to Treasury bonds. And as I’ve pointed out
earlier, that was a rather poor personal financial
management decision because the Fed was
aggressively slashing interest rates. So President Obama lost a
lot of money, but it was worth it because freeing
himself of even the appearance of a personal
financial conflict of interest was in the best
interest of the country. And the President has
talked about how proud he is that his administration
has not been buffeted by the kinds of personal
ethical scandals that have plagued other
administrations, particularly at the
end of a second term. And the President
attributes part of that to the example that he
set from the top about maintaining an
extraordinarily high ethical standard, one
that far exceeds even the letter and spirit
of the law. And that is an example
that we’ve all tried to follow. And the American people
have benefitted from that and his administration
has benefitted from that because we haven’t seen
these kinds of distracting personal ethical scandals
that would otherwise shake confidence in government. And that’s a result of the
example that was set by the person at the top. Andrei. Given all of the
conversations about your country in here today, it
seems only fair to give you an opportunity
to ask a question. The Press: Josh, I cannot
believe that we are having this conversation
for weeks. Mr. Earnest:
You and me both. How about that? We found something
we can agree on. The Press: Live and learn. You’ll never know
what comes next. So basically I have two. One is a follow-up
to Michelle’s. You do seem happy to
talk about the leaks. You do seem happy. So my question is very
simply: Is the White House encouraging the leaks? Mr. Earnest:
Of course not. The Press: Is the White
House happy that the leaks are happening? Mr. Earnest:
Of course not. Andrei, I think there’s
only been one person who’s tried to joke about this. Unfortunately, that person
is the President-elect of the United States. This is an extraordinarily
serious matter. And I think that’s why
you’ve seen such extensive conversation about it in
this room, and I think that’s why you’ve seen
such a robust response from the intelligence
community to this matter. And it’s because it’s
extraordinarily serious. The Press: I wanted
to follow up on that. This is the essence of my
bigger question, which is about President
Obama’s leadership. I think you’ll like the
premise of my question. I’ve always thought that
President Obama is an extremely intelligent
and decent person, well-meaning person. So my question is, after
that, if we have that as a premise, how come he
wanted the U.S.-Russian relations to be a
win-win for both sides? We are now in a situation,
obviously, where it is a lose-lose. No matter how we spin it,
it’s a lose-lose for both of us. But this is not
the only one. America, in all the eight
years, did not have one day where it was
completely at peace. There was one war or
another, and not all of those wars were inherited
by President Obama. And he’s a Nobel
Peace prize winner. He’s like the first
African American President, but the race
relations in this country have become worse,
not better — worse. You say some
things are facts. Those are allegations. But I cannot say that it’s
a fact; it’s an impression I have that they’re worse. But many people share
this impression. Then, hacking. America is all of a sudden
vulnerable to hacking after eight years
of Obama leadership. How come? And, of course, the
biggest of all is the result of the election. The leadership
has been rejected. The preferred candidate
has been rejected. So my question, to come to
the question, is, who’s at fault? Is it Russia that
performed all of that? Is it because of Russia that the voters in the U.S. rejected the leadership
and the legacy? Mr. Earnest: Well, again,
I disagree with your assessment about the
outcome of the election, because I think there’s
ample evidence to indicate how strongly the American
people feel about and support President Obama
personally, and his legacy. President Obama’s poll
ratings are higher than they’ve been in quite some
time, and certainly exceed — or at least in the
range of, or exceed, every other recent
outgoing President. And I think that it is a
pretty clear indication of how strongly the American
people do feel about his leadership. When it comes to the
question about whether or not Russia is at fault
for the outcome of the election, that’s not a
question for intelligence analysts, that is a
question for political analysts to evaluate why
people voted the way that they did, and how — and
why the outcome was so unexpected. The Press: Josh, that’s
not my question. The question was about the
responsibility of the top executive in this country. Does he feel any
responsibility for all this? Mr. Earnest: When you say
for all of this, can you be slightly more precise? The Press: For the wars,
for the race relations, for the deterioration of
relations with Russia. Mr. Earnest: Well, I
disagree with your assessment of
race relations. With regard to wars,
President Obama is quite proud of the efforts that
we — that the United States, in close concert
with our allies around the world, with the steps
that we have taken to strengthen our national
security, to make the United States and
our allies safer. The United States has
actually been effective and forceful in
taking on ISIL. It’s actually Russia
who has only had one operational gain on the
ground inside of Syria, against ISIL, that has had
that gain rolled back. And, in fact, the threat
posed by ISIL is now worse because of Russia’s failed
strategy inside of Syria, because ISIL didn’t just
retake Palmyra, they retook Palmyra and all of
the military equipment that the Assad regime,
backed by Russia, had moved in there. The Press: You sound
as if you welcome that. Mr. Earnest: I don’t
welcome that at all. I am gravely concerned
about the danger that is now heightened because of
Russia’s failed strategy. And according to what my
colleagues at the Pentagon are now saying,
it’s now U.S. servicemembers, U.S. members of the military
that are now going to have to go in and clean up
the mess again that was created by Syria, with the
backing of the Russians. And when you consider
the President’s record overall, the fact of
the matter is, when you consider what he
inherited, when President Obama walked into office,
there were 180,000 U.S. troops in Iraq and
Afghanistan combined. Today, America is safer,
and there are only about 15,000 U.S. servicemembers in
those two countries. And that represents
substantial progress in enhancing our national
security but also moving America off a
permanent war footing. The Press: And that’s why
we have the results of the election. Mr. Earnest: Bob, I’ll
give you the last one. The Press: Thanks
so much, Josh. Given all the talk about
Russian hacking, should the Electoral College
voters take into account the influence of Russian
hacking the distribution of emails in their voting,
which is going to happen on Monday? And do they have the
constitutional right to do so? Mr. Earnest: Listen, I
know that there are a number of electors who
have spoken publicly, raising some concerns,
some questions about how they should fulfill
their constitutional obligations. I think that’s evidence of
how serious many of these electors take their
constitutional responsibilities. But I’m not going to stand
here and tell them how to vote, or stand here and
tell them how to fulfill their constitutional
responsibilities. This is a responsibility
that they’ve been entrusted with. And there certainly is
ample information about the election that has
already been made public. But ultimately it’s up to
the Electoral College to fulfill their basic
constitutional responsibility. Gregory? The Press: Josh, will
there be a press conference tomorrow? Mr. Earnest: I anticipate
that I will not be the one standing here tomorrow,
but we’ll be able to confirm that for you
before the end of the day today. Thanks, everybody. And if I don’t see
you, happy holidays.

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