White House Principal Deputy Secretary Raj Shah and Chairman of the Council of Economic Advisers Kevin Hassett hold a briefing to update the media on the issues and events of the day including:
- the president’s infrastructure plan
- actions after Parkland, Florida tragedy
- attack on U.S. Embassy in Montenegro
The briefing is scheduled for 2:00 p.m. EST.
MR. SHAH: Good afternoon, everyone. Since its founding in the 1940s, the White House Council of Economic Advisers has written and delivered a report to Congress on the annual Economic Report to the President. The 2018 report, which was delivered yesterday, covers the President’s economic successes to date and our agenda going forward.
To dig into the details, we have with us today, Kevin Hassett, the Chairman of the Council of Economic Advisers. Kevin will make a brief statement and answer your questions on the economic report. Then I’ll be back to take your questions on the news of the day.
So with that, I’ll give it to Kevin.
MR. HASSETT: Thanks a lot, Raj. And, you know, it’s kind of a dark, dreary day. And I heard the White House Press Corps was a little bit depressed. And so I said, “Well, let’s do some economics and cheer everybody up.” (Laughter.)
And digging around the Chairman’s office, I noticed that on my bookshelf there was a copy of the first Economic Report of the President from 1947. And Harry Truman, in it, said this: He said, “The economic report is an opportunity for national self-examination and self-criticism. It’s a challenge to the President and the Congress to determine the causes of whatever problems we face in our economic life and to find the solutions of those problems.”
And that’s what we endeavor to do at the Council of Economic Advisors, and what we’ve endeavored to do in this report that came out yesterday. We briefed the President on it yesterday at 11:30 in the Oval Office, and I encourage you all to read it because it’s really a scintillating read.
The economic report has eight chapters. The first chapter is an economic outlook, where we project that our policies will create about a 3 percent growth rate going forward over the next 10 years. Real GDP will be about $2 trillion higher in 2028 because of President Trump’s policies.
And then each of the chapters after that go into taxes and growth, deregulation, labor market policies, infrastructure investment, enhancing global trade, and innovative policies for America’s health. They all basically go into a big literature that looks at how our policies will affect economic growth.
And we start with a baseline of 2.2 percent growth and show that we can get to 3 percent growth just by adding up what the academic literature says about the economic effects of our policies.
Now, we’re supposed to also come up with measures of our nation’s problems that help set priorities and quantify how bad our problems are. We have two attempts in the Economic Report to do that. One is, we have a chapter on cybersecurity, where we did a lot of original research to find that cyber theft is costing us about $100 billion a year right now, in the U.S., in 2016.
And the second thing that we did is we looked at the opioid crisis, where we find that that’s costing us about $500 billion a year to help us set the priorities.
And with that, that’s what the economic report says. I’ve got just a few minutes for questions. But also, anyone who wants to reach out to us and come over to the CEA office can ask me questions there.
And I’ll start with you in the back.
Q Yeah. Thanks, Kevin. Two questions for you. One on the dollar and the other one on the stock market. We’ve seen a tremendous amount of stock market volatility over the past month or so, and I’m wondering if you think that that volatility has any impact on the real economy, beyond just Wall Street. And then I have another question.
MR. HASSETT: Yeah, stock market volatility is something that’s to be expected. It’s a regular thing in the stock market. And it tends to go up when the market has gone up a lot, as it has in response to our policies. I don’t think that it’s anything unusual or something for people to be concerned about.
Question up here.
Q Can I follow up on the dollar, sir?
MR. HASSETT: Oh, the dollar — Secretary Mnuchin has spoken a lot about the dollar, and the dollar policy has not changed in this administration.
Q But I’m talking about whether the United States still has a strong-dollar policy, because there’s been some comments that suggest that maybe the United States wants —
MR. HASSETT: Secretary Mnuchin is in charge of communications about the dollar policy.
Q Can you address some of the critics who say that the economic policies of this President may lead to greater inflation?
MR. HASSETT: Yeah, that’s right — that’s something that people are concerned about. And, certainly, there’s been some inflation data that has caused some pause for markets, some concerns for markets.
Our view is that most of our policies are going to create growth for the economy on the supply side, and that when the supply-side growth comes, then that’s actually good for inflation, because if you increase supply, it puts downward pressure on prices.
And so we think that we can get the 3 percent economic growth that we forecast without a big pickup in inflation. In fact, at CEA, when we modeled this, we get forward interest rates that are about what the Fed forward guidance is right now.
Q But you cut the — I’m sorry, but you cut taxes, and that’s the concern, is that that will stoke the fire for inflation.
MR. HASSETT: Yeah, thanks for the question. Well, if you cut the marginal tax rate on investment, then what happens is you get more capital spending, and that increases supply. If you’re going to do something like have a big “cash for clunker” program like we did eight years ago, that would increase demand and cause inflation.
Over here in the front. Jon.
Q Just a question on the stock market as an indicator. The President has often pointed to the rising stock market as evidence of the success of his economic policies and the strength of the economy. If the stock market goes down, should we conclude the reverse? Should we conclude that the President’s economic policies are failing and that the economy is not healthy?
MR. HASSETT: The stock market is a great forward-looking indicator because the value of the firm is basically the market’s assessment of the present value of future earnings after tax or pre-cash flow. And so smoothing through the ups and downs, the stock market is a great indicator. But of course, there are going to be big up days and big down days in the short term. I’m a random walker. There’s a big literature on this that your best guess at what the stock market is going to do tomorrow is to flip a coin, and then that will tell you the answer.
But in the long run, economic policy matters. And I think in this regard, the stock market is up probably about 35 percent since the President was elected. I could run the latest numbers.
And that’s pretty consistent with what you would expect given all of the positive policy changes that we’ve made. In particular, cutting the statutory corporate tax rate from 35 percent to 21 percent. Well, in the present value of the firm’s earnings, there’s a one minus the tax rate out front. If that goes from 0.65 to 0.79, then that means you should expect equity markets to go up. But equity markets go up and go down. That’s the nature of the business.
Q But if we were to see a bear market come about, we should conclude that there are fundamental problems with the economy, fundamental problems with the President’s policies?
MR. HASSETT: Sure. If there’s a bear market that’s sustained, then that would likely happen because there was a lot of bad news about earnings growth and the state of the economy. And so the stock market is a reasonable indicator of the current state of the economy. It’s been going up a lot because of optimism about the President’s policies.
I’ll go to the middle, and then I’ll come back to the front row. In the yellow tie. And I’m sorry, I still don’t know everybody’s names.
Q That’s all right. Thanks a lot, Kevin. Have you done any forecasts about what it would mean to the U.S. economy — a net positive, a net negative — if the U.S. is to pull out of the North American Free Trade Agreement?
MS. HASSETT: At the CEA, we’ve done a heck of a lot of analysis to help guide the President’s thinking on trade. There are a lot of decisions coming up, and our job is to provide objective analysis of the plusses and minuses of each of the moves that are being considered. That analysis, of course, is confidential, and it’s been shared with the President. And I’m sure it could be FOIA’d in the fullness of time, but I can’t comment further on that.
Q Well, give me a top line. Obviously, you can’t go into your analysis. But would it be a good thing for the U.S. economy if the U.S. just said, we’re done with NAFTA?
MR. HASSETT: You know, I would point you to the trade chapter in the Economic Report of the President. We have a really extensive discussion of trade.
And one of the things that surprises me as an economist — or surprised me as an economist — as I dug into the details, is how right the President is about trade in the following sense: That our trade deals really are asymmetric; that we charge pretty much no tariff at all on imports into the U.S. But a lot of our trading partners have either high tariffs or high non-tariff barriers. And so even if you look at the U.S. sales of autos into Korea, then there are a lot of non-tariff barriers that make it so that U.S. firms can’t sell there.
And so, if economists were to sit down and write a trade deal, then it would be two to three lines. It would say, “Let’s have free trade.” Right? That’s all it would take. Our trade deals are thousands of pages long, and those thousands of pages have often been negotiated by feckless negotiators who disadvantaged American workers. And I think the President is right to prioritize in improving those deals.
Up here in the front.
Q What do you project for the labor force participation rate and those marginally attached in the labor force, in the next 12 to 24 months? Because the President has identified that, you’ve identified that as a priority, and certainly those who spoke on behalf of the tax cuts and tax reform thought that would be something positive in that realm in the next 12 to 24 months. What do you project?
MR. HASSETT: Sure is. Downward pressure from the retirement of the Baby Boomers has been a key underlining factor driving down long-run growth. But —
Q Meaning, the labor force participation rate is going down because people are retiring?
MR. HASSETT: We have fewer workers. And basically, with fewer workers, you get less output. And so that’s been going on for a while, and we have an extensive analysis of this in the Economic Report of the President. And our view is that about half of that is the retirement of the Baby Boomers, and about half of that is bad economic policies that have chased people away from the labor market, including higher marginal tax rates, the high marginal tax rates from the Affordable Care Act, and increase of use of disability, and so on.
And so there are a lot of reasons why our policies, we think, can have a positive effect. But probably the biggest effect in our forecast is just that we think that wages are going up. And with higher wages, then more and more people will be attracted back into the labor force.
Q You are projecting, and you are inviting the American public to look for those numbers to move in a positive direction noticeably, in this coming year.
MR. HASSETT: Relative to the forecasts of the Obama administration, yes. It’s still the case that labor force participation is a slight negative in our forecast. You can see that inside the details of the economic report. But it’s a much smaller negative than the Obama administration thought, and we think that’s because our policies are going to draw people back into the labor force.
I’ll go back here.
Q Yes. I just wanted to ask about wealth inequality and the fact that that’s been growing for the past few decades. Is that a concern of this administration? Is that something that you want to try and combat?
MR. HASSETT: Yeah, I think that inequality, of course, is a concern for everybody who studies the economy and people in the administration. And inequality skyrocketed very much over the last eight years, in part because of something that we talked a lot about in the fall when we were discussing the tax reform. And that is that corporate profits were growing at about an 11 percent rate per year during the Obama administration, while real wages were dropping 0.4 percent a year.
And so inequality increased a lot because people who owned equities saw their wealth go up, but people who just basically lived on their paychecks saw their wages go down. We think that that happened in part because we were chasing all of the corporate activity overseas and that our wealth was, more or less, creating jobs for Irishmen, not for Americans.
And the corporate tax bill has addressed that, and we would expect that there’d be big wage increases, which you’ve already seen. There have been announcements of going in on almost 5 million people that have received pay raises this year because of the tax bill, and we think what that’s going to do is reduce inequality.
Now, Raj, you’re sort of — do I have time for a couple more questions?
MR. SHAH: Yeah, one more.
MR. HASSETT: Okay, so I’ll go right here, row two.
Q Yeah, so on that wage increase, AP was reporting this week on a Morgan Stanley survey of stock analysts who were looking at how companies are spending their tax savings, and said 13 percent was going to workers, 17 percent to capital spending, and 43 percent to dividends and buybacks — that is, the shareholders. Your model was that a much higher percentage was ultimately going to wind up in the pocketbook.
MR. HASSETT: Sure. And it will. Yeah.
Q So what are the stock analysts missing there?
MR. HASSETT: Well, the thing that you have to remember is that we’re starting out with trillions of dollars that were parked overseas, and that trillions of dollars — those monies are coming home right now, and that’s a one-time adjustment. And a lot of firms are taking that money and they’re paying bonuses, but they’re also doing things like increasing dividends and doing share buybacks, which sometimes happens when firms find money.
And so with that money coming back, then right now we’re going to have an adjustment where you’ll see probably more dividends than share buybacks than wage increases because that’s cumulative past earnings.
But going forward, we’re going to see a lot of capital formation and wage growth, and that’s where, basically, we said three to five years you’ll get the $4,000 number. Right now, about almost 5 million people have had a $1,000 pay raise already. Share buybacks have gone up a lot, but that’s basically based on the trillions of dollars that used to be parked overseas but have been brought home and put to work here.
I’ll ask a — last question in the far back.
Q Thanks, Kevin. And a couple for you at that, if you don’t mind. You, sort of, laid the foundation in there for increasing the gas tax, talking about how it hasn’t been touched in about 25 years while construction prices have risen. How realistic is it that there could be a hike in the gas tax? That’s question one.
And then, question two, when you look at the charted GDP growth over 10 years, it’s essentially above, at, below 3 percent, but when you look at past tax cuts — Reagan, JFK, and even what this President has talked about maybe 4, 5 percent — why only at 3 percent?
MR. HASSETT: Okay, so we’ll start with the gas tax. In the economic report, we have a chapter on infrastructure, and we talk about what a 21st century financing mechanism might look like for infrastructure and talk about the challenges for the current organization that are presented by innovation.
And you could imagine, for example, the thought experiment supposed that everybody in this room, everybody in all of society had an electric car — if we’re all driving around in Teslas, then how is the gas tax going to pay to fix the potholes because there’s no one using gasoline anymore?
And so, as we approach the 21st century, the President has a very ambitious infrastructure agenda and he’s basically instructed everybody to think creatively about how are we going to finance that, and to make sure that the thing that’s legislated becomes law and that all of the possible tools are on the table.
As for why we didn’t go to 4 or 5 percent growth, I think that you can go — and I think our economic report is extremely transparent. You can see that we get a 2.2 percent baseline growth forecast out of one of the best, most reliable time series models in the literature. And then we have a chapter on each of the President’s policy objectives, and we talk about what the economic growth you ought to expect out of that is.
That gets us up to 3, 3.2 percent — 3 percent on average over 10 years. And that’s all it’s really based on, very hard science. We have more than 50 pages of academic references in the back where those numbers come from. If those numbers had led us to 5 percent, then we would have been at 5 percent.
Let me close, though, by putting that in perspective. The median forecast for Economic Reports of the President going back to this one is that economic growth would be about 3.2 percent. And so we’re a little bit below the median.
The economic growth forecast for the Obama administration, the first four years, was that it would be about 3.2 percent. They were right on the median that we inherited all the way back from Harry Truman. But then what happened was, at the end of their administration, because we kept having low-growth years after low-growth years — they, on average, overestimated growth over those eight years by 1.2 percent — then they finally came up with a story for why we should expect low growth forever.
We, at the CEA, and in this White House, don’t accept that there’s a new normal. We think that if you read the Economic Report of the President, you can see that there’s a very strong case to be made that we can just go back to normal and stop modifying the word “normal” when we think about the economy.
Q So should we not expect potentially 4 percent growth or higher at some point down the line? Is that aggressive?
MR. HASSETT: The President and I have talked about this. And it’s one of those things about — if you think about what a 3 percent year looks like — a 3 percent year is never 3, 3, 3, 3, 3, 3. A 3 percent year is 4, 2, 4, 2. And so I think that the odds over the next few years having some quarters where we have growth is in excess of 3, or probably pretty high given the very ambitious policy agenda that’s already partially enacted.
And with that, I guess Raj is telling me I have to go. And thank you so much for your attention. It’s an honor to be here again.
Q There’s no fear you have at all of a recession anywhere in the foreseeable future?
MR. HASSETT: Oh, I think economists are always attentive to developments and wary of exogenous factors that we can’t anticipate. I think the unconditional laws of recession are something that people who study this, like Jim Stock at Harvard, talk about.
But right now, there’s so much momentum in this economy that we’re heading into a Q1 with three quarters in a row that average about 3 percent. Our models suggest that the first quarter should be a little bit above that because there was an inventory drag in the fourth quarter that should offset in Q1. And so, right now, we’re looking at an economy that’s about as solid and as good as we’ve seen since before the financial crisis.
Thank you very much.
MR. SHAH: Thanks, Kevin. Moving on, as you all saw yesterday, the President hosted an extraordinary listening session with students, teachers, and families impacted by school shootings.
It was an emotionally, incredibly constructive conversation. It included many perspectives and very different opinions. And it focused on solutions, which is exactly what the President is looking for. As the President tweeted yesterday, “I’ll always remember the time I spent today with courageous students, teachers, and families. So much love in the midst of so much pain. We must not let them down. We must keep our children safe.”
Today, that conversation continued with local leaders. The President knows the best ideas usually come from the local level and not from Washington, D.C., and that’s certainly the case here.
Next week, the President will welcome governors to the White House, and the top issue will be school safety.
I’d like to quickly follow up on a question I got from April Ryan last week. She asked about the Violence Against Women Office in the Department of Justice. The President’s proposed budget for fiscal year 2019 does increase funding for the Office on Violence Against Women by over $3 million. Our goal is to ensure this funding has a maximum impact providing support and assistance to survivors in combatting domestic and dating violence, stalking, and sexual assault.
Finally, two quick things I’d like to point out before taking your questions. First, a new Gallup survey out today shows that the percentage of Americans who are satisfied with the United States standing in the world has increased by 13 percentage points in a single year under this President. That is a 13-year high.
And last, but certainly not least, I’d like to offer congratulations to one of your colleagues who’s not here today, Margaret Brennan, who was just announced as the new host of Face the Nation.
So with that, I’ll take your questions. I’ll start with Major.
Q Thank you, Raj. Would you summarize for us what the President intends to do in terms of legislation he will propose to Congress on guns? He raised a lot of issues yesterday; he raised them again today in the second listening session. Is he going to send a bill to Congress authored by him and this administration, outlining what he wants? Or is he going to leave it to Congress to decide what to propose and what to vote for?
MR. SHAH: Well, the President is proposing ideas. He’s listening right now. He’s been talking about a series of ideas. He’s talked about strengthening background checks, with an emphasis on mental health. He’s also talked about raising the age for some gun sales. He’s talked about ending bump stocks — the sale of bump stocks. And there’s also state laws that have been on the books and that we’re continuing to look at.
So, right now, we’re in a listening phase. I wouldn’t say that we are or aren’t going to propose some things that is as specific as legislative language. But he is going to come forward later on with something a little bit more concrete.
Q But does he think that, for example, on bump stocks, or any of these questions, the best way to approach it is to have Congress write the law and for him to sign it? Because he’s been pretty specific and consistent on that point. Regulations are helpful, but laws are better. Does he believe Congress should rewrite laws in conjunction with, and consistent with, the priorities you just outlined?
MR. SHAH: Well, I think to each of those points, there could be a different approach. In some areas, state laws make more sense. In other areas —
Q Such as?
MR. SHAH: Well, I mean — I think some states have had these red-flag laws, for example, that remove firearms after you go to a judge for potentially dangerous individuals. That’s something that’s being done right now in a variety of states, right? They have due process rights for these individuals. It seems to be working in certain areas. That’s something that we’re looking at and other places we’re looking at.
Q So he would not look at that federally?
MR. SHAH: Right now, that’s not under consideration, but that doesn’t mean it can’t be. I think what we want to say, though, is that on the issue of bump stocks that you outlined, he’s already ordered the Department of Justice to look at —
Q Right. But Congress can do that also.
MR. SHAH: Sure. But I think that right now he’s ordered the Department of Justice to take action, and I think that we’re going to see exactly the rule that might be proposed by the ATF and the DOJ on bump stocks. But I don’t think that some panacea makes the most sense. I think we need to look at, first, what policy we want to come forward with, and then what is the right legislative approach at a federal and state level.
Q Hey, Raj, the President has talked about arming teachers who are capable of handling firearms. There are 3.5 million teachers, roughly, in the United States. He said it would be about 20 percent. That’s 700,000 teachers. How would the President propose arming 700,000 teachers?
MR. SHAH: Well, I think what the President talked about was taking individuals, personnel within schools — some could be teachers; you could have other individuals who have training, already in how to use firearms or could gain training — and making sure that those individuals have access to concealed weapons that they can have on school grounds. In those instances, the presence of individuals would deter potential attackers.
Q But, by his numbers, we’re talking 700,000 teachers or other school personnel, maybe even more, armed in schools. How is that practical? How is that wise to have to have 700,000 more firearms in schools?
MR. SHAH: Well, I think when you have a horrific situation like you had last week, and some other school shootings that we’ve seen, these horrible tragedies, what we think and don’t think is practical can change.
Q In order for something like that to be effective, you’d have to get buy-in from many, many school boards across this country.
MR. SHAH: Of course.
Q So far, much of the reaction that we’ve seen to this idea has been negative. Does the President expect that he can get enough buy-in in order to send a signal to potential shooters out there that this is a hardened facility; you walk in the doors, he said, a little while ago, and you’re not going to last very long?
MR. SHAH: We certainly think so. Look, there are a lot of individuals, leaders, in Congress. You know, the NRA has been supportive of this idea, a lot of other folks have been supportive of this idea. The notion that trained individuals who work within schools that have firearms and can serve as a deterrent, we think, could keep a lot of schools and a lot of communities safe.
Q Raj, I have two questions for you on both of these policies, to follow up on this conversation. There are some districts, as you know, that don’t have enough money to give teachers the school supplies that they need. So how are schools supposed to pay for bonuses for armed teachers, as the President has suggested?
MR. SHAH: I think we’re looking at school safety measures. Again, there’s a policy piece to this and there’s a legislative piece to this. I think those are —
Q And a money piece, right?
MR. SHAH: Yeah, yeah. And there is a budgetary piece to this. I think that if we find the policy solutions that make the most sense that we can get buy-in for, we’ll figure out the rest of these other pieces that you outlined.
Q So the second question, though, is on the proposal that he talked about yesterday and today of raising the age limit to purchase, as he said today, any weapon, you have to be 21 to do it. The NRA has come out, as recently as last night, and said they oppose that. The President said today, he doesn’t expect to have to go up against the NRA, but this is clearly an instance where the President holds one position, the NRA holds a different position.
MR. SHAH: Right.
Q Is the President prepared to take on the NRA? What has he said to them? What assurances has he received from them since he said he doesn’t expect a battle?
MR. SHAH: Well, the President did talk to Chris Cox over the weekend. You know, in dealing with school safety issues, we don’t expect to agree with the NRA on every single issue. We do think that they are concerned about school safety. As the President tweeted this morning, we think that they’re interested in doing what’s right.
It’s going to be part of an ongoing conversation. They’re stakeholders, along with family members, students, parents, teachers, who the President heard from yesterday; local officials, who we talked to today. So he’s going to get opinions from a lot of folks and he’s going to come to the right steps that are necessary.
Q Could he change his mind on that?
MR. SHAH: I’m not saying he can change his mind. I think that the point here is that he’s going to take input from a lot of folks and come forward with proposals that we think can improve school safety.
Q Raj, so one solution that the students and family members have called for is a ban on semi-automatic rifles. Is that something that’s on the table that the President is considering?
MR. SHAH: Well, Sarah said the other day that, no idea, no potential solution is off the table. With that said, when you look at what happened in Florida, you have an individual who dozens of times, police either went to his home or were called. There was a call to the FBI. This was a troubled individual. He had been identified. There were a lot of alarms raised about this individual.
We don’t think that most — the immediate policy response would be to ban an entire class of firearms. What we’re looking for is solutions that don’t ban a class of firearms for all individuals but ban all weapons for certain individuals who are identified as threats to public to safety.
Q Raj, the President had said before — he wrote in his book in 2000 that he was for the assault weapons ban. Is there something that’s changed his thinking in that time? Or (inaudible)?
MR. SHAH: Yeah, I mean, he campaigned for President and was opposed to the assault weapons ban. And his position hasn’t changed on that.
Q Raj, I want to ask you about the rule finalized by the Obama administration that President Trump reversed last February which would have allowed the Social Security Administration to provide information to the gun background check system of people with mental disabilities.
CBS News has asked the White House on 15 separate occasions for a participant list of the bill signing, which you guys normally release, along with a picture. Is there a reason that you guys aren’t releasing this photograph — if the President, as he professed today, is proud to work so closely with the NRA? And if not, why not?
MR. SHAH: Well, I don’t know. You hadn’t asked me about it. And it you have, I apologize if I haven’t gotten back to you. And I don’t know if there’s a photo, but I will get back to you.
On the rule that you’re talking about, the Social Security Administration’s regulation under the previous administration that blocked gun purchases was opposed by folks on both sides of the aisle, including the ACLU. We need actual solutions that will secure our schools and prevent future shootings. We don’t think that taking away Second Amendment rights from people who essentially have trouble with their checkbooks is the right solution.
Q And then I just want to follow up. You’ve been saying the President is doing a lot of listening. Did he watch the CNN town hall last night? And why didn’t he attend in person and listen in person himself?
MR. SHAH: I didn’t ask him about that.
Q Hi, how many White House officials are in danger of losing their security clearances under General Kelly’s plan tomorrow?
MR. SHAH: I can’t get into the specifics regarding individual security clearances or numbers or, kind of, what you’re asking me. But I can say, the memo did outline a series of reforms that, in the wake of the situation involving Rob Porter, that we can do to ensure that the security clearance process is tightened up, interim clearances are tightened up. That’s actually — some of these things the Chief of Staff had taken action on months ago, but there are — these are steps that are going to apply to all White House officials.
Q You can’t give us even numbers, though, when it goes into effect tomorrow?
MR. SHAH: No, I can’t get into — I can’t get into.
Q How? Why not?
Q Why couldn’t we at least evaluate — the public evaluate how meaningful this change has been?
MR. SHAH: Again, the memo outlines in pretty specific detail how the security clearance process is going to work, moving forward, and how it’s implemented on Friday. And beyond that, I can’t go further.
Q You keep saying that you’re in the phase of listening to people’s ideas, but just specifically, how can you assure the American people that these ideas will turn into concrete action?
MR. SHAH: Well, I think the President already has — you saw him, for nearly an hour yesterday, listen to individuals and take in quite a bit of input from people who are frustrated, who are struggling, who are angry. A lot of people — it was very raw. It was very emotional. It was very real. I can tell you it’s impacting him. I can tell you that he is listening.
And again, the policies that he’s beginning to talk about — background checks for one, mental illness, and specific measures that we can look at to improve the background check process, by looking at mental illness is another — again, the age — the age 21 piece of this. So there are a number of things that he is considering and talking to family members, talking to local officials, talking to many others. It is impacting some of his thinking.
Q Can you ensure that action will be taken?
MR. SHAH: Well, I mean, look, as I said — as I told, Major, right now we’re in a listening phase. There’s a policy process. Eventually, there will be legislative process.
Q And is he willing to go against the NRA, ultimately? Because the NRA is standing firm that it does not support age limits for semi-automatic rifles. Is the President willing to stick with his —
MR. SHAH: He’s willing to do what’s right to ensure safe — to ensure we have safe schools.
Q So when the President talks about comprehensive background checks, can you tell me exactly what he means by that? Does he mean that he thinks that every sale of firearms should come with a background check? Meaning, closing some of these loopholes, like the gun-show loophole?
MR. SHAH: Well, the things that he has talked about are specially focused on mental illness to ensure that in a number of states — I mentioned red-flag laws — there are other potential court orders that can be brought into the process. And also ensuring that everybody who engages in a background check has all the information available that we’re putting into the system. So more accurate information, more current information, from more sources.
Q But it wouldn’t be for all sales. So you —
MR. SHAH: Again, I wouldn’t rule anything out, but right now, that’s the most immediate thing under consideration.
Q On the age limit or the age threshold for purchase of a weapon, is he thinking about an across-the-board threshold for that or for certain classes of weapons? How specific can you be about —
MR. SHAH: For right now, for semi-automatic weapons.
Q Just for semi-automatic weapons?
MR. SHAH: Correct.
Q And then, can you talk about what motivated him today to come out against active-shooter drills in schools? A lot of districts around the country have been doing these drills to basically prepare students and teachers to survive if there’s an incident like happened last week.
MR. SHAH: Yeah, I actually talked — I did talk to him about that. I mean, he said the term “active shooter drills” is particularly — could be frightening for young children. He thinks a drill that has a different name and is not — the brand of it, frankly, doesn’t frighten children, might be a better way to approach it.
Q Do the drills but just don’t call them active shooter drills. Is that what you’re saying?
MR. SHAH: Yeah, I think safety drills, which help in these types of situations, would be more appropriate. The term “active shooter drill” for a young child could be very frightening.
Q Last August, the President had announced his (inaudible). It’s about six months now. How did the President see it has moved along? And has it progressed on the lines that he wanted to? Or what are the bumps on the road?
MR. SHAH: So, the United States is working closely with our partners in Afghanistan. We’ve made significant progress against ISIS, reducing their presence and eliminating hundreds of fighters. We’ve eliminated their top leaders, and we’re working relentlessly to target their leadership and bases wherever they emerge.
I know that we have restored some clarity in our relationship with Pakistan. For the first time we’re holding Pakistan accountable for its actions. We’ve seen modest progress in terms of Pakistan’s actual acknowledgement of these concerns, but the President is not satisfied with progress when it comes to Pakistan.
Q Thanks a lot, Raj. Are there any proposals for, initiatives, the President is considering that he could implement by executive order as it relates to the mass shootings that we’ve seen across our country over the last few years?
MR. SHAH: Well, he did sign a presidential memorandum earlier this week — specifically on bump stocks — ordering the Attorney General to expedite the ongoing review that’s been happening at the Bureau of Alcohol and Tobacco and Firearms.
Q And that’s it?
MR. SHAH: Yeah.
Q Okay. And then as it relates to reaching out to members of Congress, has the President — since the horrific incident that happened last week — reached out to either the leaders, Republican or Democrat of the House and the Senate, to move some of these proposals forward in the House or the Senate?
MR. SHAH: Well, he has ongoing conversations with a number of members of Congress on a whole host of issues, and this has been a part of that. He did talk to Senator Cornyn on Friday, specifically about his Fix NICS bill. And this has been a part of a lot ongoing conversations.
Again, there is a policy process that is ongoing. And when Congress gets back into session, I think there’s going to be more engagement with both Democrats and Republicans on these issues.
Q During that session, the President seemed to suggest he was thinking about pulling ICE out of California because of the sanctuary city flap. Is that a serious proposal? Is he thinking about doing that?
MR. SHAH: Well, we think California should actually enforce immigration law rather than get in the way of it and ignore federal immigration law. We think that sanctuary cities are a threat to public safety and they encourage more illegal immigration. So I think the President was raising that concern and making a very valid point.
Q Is he seriously thinking about pulling federal law enforcement out of there?
MR. SHAH: Well, I wouldn’t get ahead of anything the President might do, but I would say that California’s law enforcement decisions, and decisions of the Governor and others up and down at the state level have been very troubling.
Q I have a question about the President’s reassurances that he’s going to give to Republican lawmakers. The NRA president said today of people that are trying to change gun control, that they hate the NRA, they hate the Second Amendment, they hate individual freedom. If there are Republican lawmakers who then come and back the President if he has a difference with the NRA, what assurances is he going to give them that he’s going to support them if the NRA chooses to run a primary challenger against them?
MR. SHAH: Well, the President is going to propose more specifics with regard to school safety. He’s going to want support from Democrats and Republicans. And yeah, he’s going to provide political cover for those who are willing to take leadership roles.
I don’t necessarily think that everything that he’s going to be proposing is going to be at odds with the NRA or any group. But he is going to propose things. He is very serious about this issue, and he does want to have solutions.
Q Thank you, Raj. Following on several of my colleagues’ questions about the issue of arming teachers in schools, I understand what you’re saying about how this is something that we can get into more of the specifics later.
But the President is saying that, not just 20 percent, up to 40 percent of teachers could have these concealed carry permits in schools. And as Jon was noting at that point, that would be more than 700,000. That would be a million-plus at this point. And President Trump said that they would only be going to highly adept teachers, but he used John Kelly, or someone like John Kelly, as an example today when he talked about it.
And so does the President really believe that there are up to 20 percent or 40 percent of teachers in schools who are as adept as someone like John Kelly at wielding a weapon?
MR. SHAH: We’ve talked to teachers. We’ve talked to folks in communities. I think there a lot of people who — a lot of teachers who, if they aren’t currently trained, would be willing to get trained. Again, this is a very complex problem, and we need serious solutions. That is a big step. I understand what you guys are saying. But I also think that if we really want school safety, a very serious idea is having trained individuals in schools with concealed weapons, because that will certainly deter potential attackers.
Q And one question on the background checks. The President used the word “comprehensive background checks.” What does he specifically mean? When he says the word “comprehensive,” does that mean universal? And would he be willing to support universal background checks? And just to clear that up, what I mean by that is background checks on all firearms sales.
MR. SHAH: Right. And as I said, nothing is being ruled out at this stage, but the focus is on mental illness.
Q Thanks, Raj. One on foreign policy for you, and one on domestic policy. First, on Syria, we saw the statement from this administration last night. And today, more civilians are dying east of Damascus. What more can President Trump do to stop the killing?
MR. SHAH: Well, we are monitoring the situation. And I don’t want to get ahead of anything that may or may not be announced on that front. But, you know, the Assad regime and Russia’s actions on this front are on notice.
Q Does the President believe Bashar al-Assad is committing war crimes?
MR. SHAH: I would say that Bashar al-Assad has already committed war crimes. He’s already gassed his own people with sarin. He’s already committed unthinkable acts, and he’s done so with Russian support. And we don’t want that to continue.
Q And on guns, quickly.
MR. SHAH: Yeah.
Q Sorry, Raj. On school shootings, generally speaking, does the President see this as a guns issue or a people issue?
MR. SHAH: I think it’s about safety. It’s about people. And it is about ensuring that schools, our children, are kept safe. I mean, he talked about that a bit yesterday and a bit also, as well, today.
You know, you have a situation right now where, in a lot of communities, banks, local bank branches, stadiums where people go to watch a sporting event are a lot more secure and a lot safer than schools are. And that doesn’t really seem to make a lot of sense.
Anybody who’s feeling threatened or can afford it, whether it’s a celebrity or politicians, they have armed guards. They have a security details. They have people who are able to protect them with firearms. And that’s one of the issues that he’s raising.
Q Raj, thank you. When you look at past school shootings that most Americans can recite at this point — Columbine — the shooters in that case used handguns and a sawed-off shotgun. In Sandy Hook, the shooter used a handgun and a type of AR-15. Stoneman Douglas the other day, an AR-15. When the President is talking about teachers being armed with guns in classrooms, is he talking about being armed with handguns? Is he talking about being armed with AR-15s? Is he talking about being armed, potentially, with shotguns? What exactly is he talking about?
MR. SHAH: Well, I havent asked him about that. I would say concealed weapons are of a certain variety.
Q And just to pick back up on Hallie and Jon and that 700,000 number. If you give these people bonuses, say, a thousand bucks, and you’re talking about $700 million, potentially — maybe it’s north of a billion, maybe it’s less than that; in any event, it’s a lot of money — would the federal government pay for something like this? Do you expect the state and local municipalities to pay for this?
MR. SHAH: The policy hasn’t been fleshed out. But do we really think that that’s too much to pay for school safety?
Q You mentioned that the President spoke with the NRA’s Chris Cox over the weekend. Did he specifically discuss this idea of raising the legal age to purchase a rifle to 21? Or was this subject not discussed?
MR. SHAH: I’ll have to get back to you on that.
Q Real quick sec — a question, if I could. It’s all right. I only had one; everybody else had two. Adam Schiff says that he’s like to get his Democratic memo out this week. He’s sent it to the FBI for redactions. If it comes back to the White House with the appropriate redactions, will you expedite its release?
MR. SHAH: So I know that the House Intelligence Committee, the minority, has been in touch with the FBI, and they’ve been going back and forth about that. Yeah, once it meets the FBI’s standards for ensuring it’s law enforcement sensitive, and sources and methods are protected, we would support its release.
Q Yeah, just another subject. Last week, the President’s personal lawyer acknowledged giving a $130,000 payment to Stormy Daniels. Is the President aware that his lawyer paid that kind of money to a porn star to buy her silence? Does he approve of that?
MR. SHAH: I haven’t asked him about it, but that matter has been asked and answered in the past.
Q No, not since he acknowledged this. He acknowledged this last week. This is the first time we’ve had a chance to ask about it. So can you go back — can we find out if the President approves of the fact that his personal —
MR. SHAH: I haven’t asked him about that.
Q Will you ask him about that?
MR. SHAH: I haven’t asked him about it.
Q But will you ask him about it, Raj?
MR. SHAH: I’ll get back to you.
Q Thank you, Raj. Police in Israel said last week that they have sufficient evidence to charge Prime Minister Netanyahu with bribery and other charges. Does the President believe that the Prime Minister is innocent? And does he have any concern that this legal issue could affect the peace process?
MR. SHAH: That’s an internal Israeli matter, and I’m not going to comment on it. Thanks a lot, guys.Wake up Right! Subscribe to our Morning Briefing and get the news delivered to your inbox before breakfast!