Press Briefing by Mike McCurry and O.M.B. Director, Dr. Alice Rivlin

The Briefing Room

12:25 P.M. EST

MR. MCCURRY: Good afternoon, everybody. Nice to see you again today. Before I start the briefing that Dr. Rivlin has graciously agreed to give let me just -- a couple of updates.

As you know, earlier today the President instructed Leon Panetta, in response to the letter the President received last night from Speaker Gingrich and Majority Leader Dole, to go to Capitol Hill to meet with the bipartisan leadership of Congress to talk further about ways in which we could avert what is now the likely shutdown of the federal government. The Republican leadership of Congress refused to set up that meeting. We then made an effort to arrange a bipartisan meeting with the leadership of the House and Senate Budget Committees. Again, unfortunately, the Republican leadership have rejected that meeting. So there will be no meeting between the Chief of Staff and the bipartisan leadership on the Hill today, for those of you who are looking for further things to cover today.

The President is disappointed in this. The solution to the crisis that we're in now must be bipartisan. The President thought it would be very appropriate to have bipartisan meetings on the Hill today between his Chief of Staff and Republican and Democratic leaders to see how we can move ahead at this point. That was not -- apparently, not acceptable to the Republican leadership of Congress.

Q: Mike, Dole said he'd cancel his schedule to be here for this. Do you know why then he's not willing to meet with Mr. Panetta?

MR. MCCURRY: I don't know. You'll have to direct that to them.

Q: What did they tell you why --

MR. MCCURRY: The President had instructed the Chief of Staff to determine if there was any movement on the part of the Republican leadership to see if we could move ahead on this situation. But apparently, there's no willingness to have the type of bipartisan meeting that's necessary if we're going to find a bipartisan solution to this crisis.

Q: Is it they didn't want the Democrats there?

MR. MCCURRY: Apparently.

Q: Mike, why wouldn't the President get personally involved in this?

MR. MCCURRY: Well, the President, as you know, was personally involved by meeting with both Speaker Gingrich and Majority Leader Dole last week and made it very clear what needs to happen if we're going to have serious discussions about the budget. But there just doesn't seem to be a point now where we can have that type of discussion.

Q: Were the Republicans willing to meet with Mr. Panetta if he met only with Republicans and left the Democrats out of the meeting?

MR. MCCURRY: That apparently was their preference. But our view of this and I think what is obvious at this point is that if there's going to be a solution to the problem we're in now, it's going to have to be bipartisan.

Let me move on now to introduce Dr. Rivlin --

Q: Can you take just one question of why you would cancel the Monday trip to Boston? Is it budget-related?

MR. MCCURRY: The President had intended to go Monday to Boston for a health care discussion and also for a political fundraiser. In light of the very clear likelihood that we will be in the process of shutting down the federal government Tuesday, and the President believed it was appropriate for him to be here. He will be able to participate in the health care discussion by telephone and he's asked the First Lady to represent him at the political event. which she has graciously agreed to do.

Q: How about the trip to Japan?

MR. MCCURRY: There's no change in our plans at this point. But, obviously, we'll have to watch how the situation develops next week.

Q: Is today the day the President vetoes the debt limit bill?

MR. MCCURRY: The debt limit measure has not been sent to the White House, and our understanding is it likely will not come today --

Q: Will it come tomorrow?

MR. MCCURRY: -- so there's nothing here to veto. You have to ask the Republican leaders of Congress that question.

Okay, let me get on because we have a short amount of time here between the President's events.

Dr. Rivlin, the Director of the Office of Management and Budget, has agreed to go through with you the very detailed plans that have been submitted to OMB by the various Cabinet agencies that describe how they will deal with the contingencies we'll be dealing with on Tuesday. It's a delight to have her here.

Alice.

DR. RIVLIN: Thank you very much, Mike.

It seems increasingly likely that the Congress is determined to force a shutdown of the federal government, beginning with the federal government runs out of money at midnight on Monday. I'm here to talk about our plans for shutting down the government in an orderly way, if we have to do that, starting Tuesday morning if that becomes necessary. I want to talk about what shutdown means for people who are expecting services from their government and what it means for people who work for the federal government.

But first, a word about why this is happening. It seems sort of stupid to be talking about closing down the federal government, closing down services that people really need and expect from their government. It is stupid. It is unnecessary. We wish we were not even talking about this. Congress is precipitating this crisis because they have not done their work. They have not done the work assigned to them by the Constitution of passing appropriations legislation to keep the government funded.

When the government's fiscal year started on the 1st of October, only two appropriations bills out of 13 had been passed. At that time, the Congress, realizing they hadn't gotten their job done, worked with the administration to pass a stop-gap funding measure, a so-called continuing resolution, to fund the government through the 13th of November while they did their job.

Now it is almost the 13th of November, but they have made very little progress. Only three more bills have been passed and have not actually even, all of them, gotten here. But instead of doing what would be the sensible thing of extending the continuing resolution in a businesslike way until they get their job done, they have decided to precipitate a crisis. They have been working on a continuing resolution that will not even be voted until late on Monday, and they already know that is unacceptable to the President because it is not just a simple continuation of funding. It has Medicare premium increase on it, which is a totally inappropriate thing. And it has very strict restrictions on the operations of government agencies.

Now, we hope that this crisis will be resolved, but if it is not, we have to close down the government. And I just want to tell you what happens. The money runs out for agencies that do not have an appropriation, which is almost all of them, on -- at midnight on Monday. Federal workers should report to work on Tuesday morning. Some of them will continue to do their jobs either because their activities have already been funded, or because what they do involves services which are necessary to protect life and property from imminent threat.

Those that don't fall in that category, and there will be about 800,000 of them nationally, will shut down their activities in an orderly way and go home. They will be furloughed until the crisis has been resolved, appropriations bills have been passed and signed by the President and the government is back on track. That might be a few hours, it might be a few days, it might be longer. That entirely depends on the Congress.

So what happens? Well, let me say first who is -- what is not affected. The Agriculture Department is not affected because Congress actually passed an appropriations bill for Agriculture. Social Security checks and payments for Medicare, Part B, the hospital part, will go out because those are permanently appropriated. However, there will be no way to process new applications. Medicaid supplementary security income and welfare checks, aid to families with dependent children, those will continue at least through the months of November and December because the first quarter of this fiscal year for those programs has been funded. It's forward funded.

Emergency-type activities, those necessary to protect from imminent threats to life and property, will continue. Those are law enforcement, the FBI, and the ATF will continue at their posts. Prisons, prison guards will continue. Border control and the customs. Air traffic control will continue. National security will not be affected because the uniform military and some others necessary to protect national security will continue. Health services will continue. The veterans hospitals will remain open and the Indian health services.

Other activities basically will close down. What does that mean for average citizens? Well, it depends who you are. There isn't any average citizen. If you're a businessman who is planning a trip and doesn't have a passport, you won't be able to get one. The trip will just have to be delayed. If you're a family planning to visit a national park or the Smithsonian Museum, you will find that the doors are closed. If you have your 65th birthday and you were planning to apply for your Social Security or your Medicare, or if, for some other reason you were applying for veterans benefits, those applications will not be processed.

If you're a government contractor, you will not be paid. You can go on doing some work, I guess, but you won't be paid for it. If you are a school superintendent and your activities were funded by a federal grant, that grant will not be forthcoming. Neither will other kinds of grants for research and the wide variety of activities that the federal government funds. If you're a young person who decided you want to join the military, you won't be able to do that; the military recruitment operations will be closed down.

If you're an ordinary citizen or a worker, you should worry that the inspections that the government carries out of workplace safety, or of air and water cleanliness, or of toxic substances will not continue. The kinds of things that are imminent threats to health, like meat inspection, would continue, but not other kinds of environmental inspections.

If you're a federal employee, you fall into one of two categories -- those who must come to work for the reasons that I have talked about and those that will be furloughed. But in neither case will you be paid on time. The Congress would have an obligation to pay those who have been carrying out the services necessary to protect life and property, and would do so retrospectively. They do not have an obligation to pay those who are furloughed, but they might do so. But, in any case, nobody gets paid for the period of this shutdown. And if it lasts a long time, that could have a considerable impact on the economy around the country. That's a lot of people not getting paychecks who normally go to the corner grocery store. In this area of Washington, D.C., it would be quite a large number.

So if this shutdown were to continue for a while, it could have major effects, and those would get more serious as they go along. About 800,000 employees would be furloughed, and all of them, as I said, would not be paid.

Let me repeat -- the President does not want to shut down the government; none of us do. But if the Congress forces this crisis, we will do just that, and we have orderly plans to do so. Each agency has a plan. We reviewed those plans in September because we thought this might happen on the 1st of October. It is basically up to each agency to interpret the law, but OMB went through these voluminous plans which were very carefully done and made sure that we understood them, that the agencies understood what they were to do, and the plans were reasonably consistent.

So we're ready for this crisis. It's a little bit like being ready for a snow or a hurricane. We know what we have to do, and the agencies will go ahead and do it. Those plans, incidentally, are at OMB if you would like to look at them. They're quite large.

I'd be happy to answer any questions. I also have John Koskinen in, our Deputy for Management here, to help me.

Q: If you're a veteran how are you likely to be affected by a government shutdown?

DR. RIVLIN: Well, it depends what your needs from the Veterans Administration are. If you're seeking medical care you will get it. And the veterans hospitals will be open. If you have a regular compensation check it will come. There may be difficulties with some of the benefits, with processing new applications, and also with the benefits like the G.I. Bill payments because those have to be certified that the student is actually in school and there may be difficulties of getting that certification, so they are likely to be delayed.

Q: What about disability checks --

DR. RIVLIN: Disability checks, as I understand it, will go ahead.

Q: Dr. Rivlin, you said the President doesn't want this. Then why not just sign the CR? What's the long-term harm of signing that? Even though it's got some things he doesn't want they would only last a few weeks --

DR. RIVLIN: No, that's not true. The principal reason for not signing it is that it has an increase in the Medicare premium -- the Republicans couldn't wait to get into a budget negotiation and do the Medicare discussion in an orderly way. They attacked a large increase in the Medicare premium to this CR. The President cannot sign that.

Q: To make sure I understand, are you saying if he signs the CR, then that Medicare premium increase would be permanent even after the budget --

DR. RIVLIN: Absolutely. That's what they're trying to force the President to do. And he will not be forced to do that.

Q: Ms. Rivlin, members of Congress get paid, and what about the President's salary?

DR. RIVLIN: Members of Congress and the President will be paid.

Q: Is it fair for them to be paid while other employees --

DR. RIVLIN: It's what the law says, and it's not a question of fairness. The President has to carry out his constitutional duties. But in any case, that's what the law says.

Q: Dr. Rivlin, given the potentially dire consequences that you just outlined, isn't it a little silly for negotiations to break down over who is not in the room and who's in the room and the shape of the table? I mean, you almost got together today and it just seems a little silly.

DR. RIVLIN: Well, there has to be a bipartisan solution to this problem. It is not clear to us that the Republican leadership wants solutions because they keep imposing requirements that we cannot meet. This has to be settled in a sensible, orderly, bipartisan way, and to say only Republicans can be in the room is simply not acceptable to us.

Q: Given the most vital services will continue, do you think the vast majority of American people will even notice?

DR. RIVLIN: I think it depends on how long it goes on. More and more people would notice as it went on. They would notice in a lot of different ways. They would notice because they were personally affected or because their community was affected. If federal employees are not being paid in an area where there are a lot of them -- say, around a military base or a federal installation -- the grocery stores and the cleaners and the regular establishments are going to feel that problem.

Q: For military bases around the country, civilian personnel, will many of them be working? And, also, defense contractors and contractors like that, if they only miss a day or two, we're just talking about a delay in payment, correct, not any disruption than a couple of days' pay?

DR. RIVLIN: That's right. As I said, it depends how long it goes on. But contractors may not want to continue working for a long time if they are not being paid.

As to civilians around military bases, that depends on what they are doing. In general, unless their services are absolutely necessary to protect life and property or the national security, they will not be working.

Q: How many federal workers would keep working in a shutdown?

DR. RIVLIN: Let me make clear, there are about 1.9 million, almost 2 million federal civilian workers, not counting the military. We estimate now that about 800,000 of them would be furloughed. The others would keep working either because they're so necessary or because they're already funded. So that's about 1.1 million who would continue to be working, but without pay.

Now, other people might want to work and continue to get their jobs done, because federal workers are very dedicated. They are not allowed to do that. The law says that unless they are covered by these categories, they cannot volunteer, so they would have to stay home.

Q: Dr. Rivlin, will people in uniform receive their paychecks on time?

DR. RIVLIN: No.

Q: Nobody will get their paychecks?

DR. RIVLIN: Nobody gets their paychecks.

Q: Why hasn't the President signed the energy and water appropriations bill? Hasn't that been sent along?

DR. RIVLIN: It has been sent along, and that --

Q: He could sign that and prevent some dislocation there, right?

DR. RIVLIN: That is a possibility, but it did not seem like the right thing to sign under duress.

Q: Is there a problem with that bill? Does he have an objection to it?

DR. RIVLIN: No, the President has said he would sign that bill.

Q: How many federal workers are there in the Washington metropolitan area, and how many of those will be furloughed?

DR. RIVLIN: There are about three-hundred-and-some-odd-thousand in the metropolitan area.

Is that right, John?

MR. KOSKINEN: There are about 304,000 employees in the area, and the estimate is that about 150,000 of those would be furloughed.

DR. RIVLIN: So that's a large impact. The federal government is the largest employer, largest single employer in this area, and it's a very large impact, especially since none of them would get paid.

Q: And members of Congress get their checks on time?

DR. RIVLIN: So far as I know, they would. I don't know how that works.

Q: So they're the only ones who would get their checks on time?

MR. KOSKINEN: There is some question about that. They clearly are in the category -- all political appointees who are confirmed by the Senate because they have no definition of leave time will, in fact, be in the excepted category. But it has -- because we haven't ever missed a pay period, it has not been determined in the past whether the Congress would be paid. Clearly, we will incur an obligation to pay the Congress and excepted employees, but to the extent that you cannot write a check without an appropriation, to the extent there is not an appropriation, then I think the check would probably not be good.

Q: What is the case?

MR. KOSKINEN: At this point, we have not signed the Legislative Branch appropriation bill, so they would be operating --if there is no continuing resolution, they would be operating, in effect, under the Constitution as excepted for that reason, but there would not be an appropriation to pay them.

Q: So they wouldn't get their checks on time? Members of Congress will not get their checks on time?

DR. RIVLIN: We can't answer that question right now because we haven't --

MR. KOSKINEN: The only issue is we have not looked at the statutory -- some statutory provisions provide, as the Director noted, for forward funding or permanent appropriations. And it is possible the legislation appropriation bill covers all of the activities of support staffs and others. And we have not actually looked to see what the statute says about forward funding for members of Congress themselves.

Q: I'm sorry, I'm not really clear. If there is no existing funding, how do you pay them?

DR. RIVLIN: Let me try to straighten this out. I think the answer to the question, would the checks be paid on time for those who are clearly excepted in this small category is one to which we don't know the answer; I'm sorry. And the legislative appropriation, however, is like all other appropriations; the Congress would determine, in the absence of funding for the Congress, which of their staffs were necessary under the statute. They would make --

Q: Could all of them be necessary?

DR. RIVLIN: That is a matter to ask the Congress. They interpret that statute for themselves.

Q: Well, what about for the President then?

DR. RIVLIN: The President --

Q: Is the President necessary?

Q: No, but would he get paid, or would he --

DR. RIVLIN: The President will get paid, yes.

Q: On time?

DR. RIVLIN: I don't know. I just said I don't know the answer to that. It's a very clear "don't know." No ifs, ands, or buts about it. I don't know.

Q: There have been suggestions that --

Q: What you are saying here is that the President, the Congress, and all political appointees that have been confirmed by Congress are all eligible under the law to have their pay continue, but that you do not know because of the status of various appropriations whether those checks will get to them on time?

DR. RIVLIN: I thought -- yes, that is exactly right, and I think we've been very clear on that.

Q: There have been suggestions from some that the designation of, in essence, more than half the federal workers as essential for safety and health is an excessive designation and that it's perhaps too broad.

DR. RIVLIN: Well, remember that not all of the 1.1 million come under that category. A significant number of them are working because they have -- their activities have already been funded. The whole Department of Agriculture, for instance. But people who are necessary to send out the Social Security checks, they are funded -- and the Medicare checks. So we're not saying that half the government is essential to the protection of life and property; we are saying that either they are that, or they come under an appropriation which has already happened for one of a number of reasons.

Q: Talk about the ledger sheet, please. What is saved with a furlough day and what does it cost?

DR. RIVLIN: Well, we don't know that exactly and it depends a lot on how long it goes on. We have not made a cost calculation. The last time that the government was shut down was in 1990, over a weekend. The GAO made a calculation of what that cost and that's been quoted around -- I don't think it's terribly relevant, but do you remember what it was?

MR. KOSKINEN: We can make an estimate and we won't know until it's done, but on the basis of the weekly payroll, if we have 800,000 employees who are furloughed and not -- for whom we're not incurring an obligation to pay them, that will amount to about $1 billion a week. And so the issue will be once the shutdown is over, the Congress will have to make a decision -- in the past it has always moved in that direction -- to reimburse those employees.

DR. RIVLIN: But the question of cost relates to things that really have to be -- the fires banked and the computers shut down and is there an additional cost to starting up again. Yes, there is. It's certainly more expensive to close something down and start it up again. We don't have an exact estimate of what that is.

Q: If I'm a federal employee and this drags on for a week or two, and I decide I don't want to go to work because there's a prospect of -- no prospect of getting paid, do I get reprimanded when this is all over?

DR. RIVLIN: I would assume so, yes. That would be up to the supervisor and the head of the agency. I think federal employees are a pretty dedicated lot and I think it would have to go on quite a long time before that question even became relevant. The more relevant question is we're going to have a lot of employees who want to come to work and we're going to have to say, sorry, we can't let you because you don't fall in one of the categories.

Q: On that, why is it necessary for them to report to work Tuesday morning?

DR. RIVLIN: It is necessary for them to report to work Tuesday morning, even if they are about to be furloughed, to make sure that they have closed down their activities. Our instructions to the agencies say everybody reports to work Tuesday morning, and then we will close down the activities as quickly as possible.

Now, in most cases, we would assume that that would be about three hours, but it depends on how difficult it is to close down whatever it is that you're doing. If it just involves cleaning off our desk and putting the pencils in the drawer, it won't take very long.

Q: What about the District of Columbia? They don't have an approps bill yet.

DR. RIVLIN: They do not. And the District of Columbia has a shutdown plan. That plan is not reviewed by the Office of Management and Budget, although, of course, we've talked to them about it, and it is reviewed directly by the Congress. But they have a plan, and you should consult the City Administrator, Michael Rogers, about that. My understanding is that they will close quite a lot of offices, that they will not pick up trash, that they will not process licenses, but they will keep health facilities, law enforcement and the schools open.

Q: How concerned are you that the public might decided that the White House and the Congress are both to blame for this mess, in other words, that you could both lose because of this game?

DR. RIVLIN: Well, I think that the public doesn't have a very clear understanding of what's going on. That's why I think we're trying to clarify it. But what I feel very strongly about, and so does the President, is we do not want to close down the government, we do want to have an orderly budget process, but the Congress is precipitating this and they haven't done their job, and unfortunately, we are required in a businesslike way to close down the government because the appropriations have not been made.

Q: Can you answer the question about what's the status of the White House staff? Will some of them be furloughed?

DR. RIVLIN: Yes, they will. The White House staff and the Office of Management and Budget has a plan like everybody else. I don't know the exact details of the White House staff, but not everybody will be coming to work.

THE PRESS: Thank you.

END 12:57 P.M. EST