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CNN Live Today

Bush News Conference; Hamas Wins Majority in Palestinian Elections

Aired January 26, 2006 - 10:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

DARYN KAGAN, CNN ANCHOR: Word just coming into us on what's believed to be the biggest tunnel ever found running into the U.S. DEA and customs agents have found a 1,255 yard tunnel crossing the California Mexico boarder. You can tell from these pictures that it's a fairly sophisticating tunnel with lighting and cement. Here's what else some agents found. About two tons of marijuana inside. We continue to get more information on the story. We will update you on that.
Meanwhile, an investigation is going on into the possible intrusion of three people at a chemical weapons facility. Officials at Arkansas's Pine Bluff Arsenal say a security guard spotted the three on Tuesday night. The apparent intrusion took place in an area where chemical weapons are stored. Officials did a sweep of the area and say that it is secure but no one has been found.

The financial advice company Ameriprise says that data on nearly a quarter million people has been stolen. The information on both clients and employees was on a laptop computer swiped from a car. The company believes the theft was random and says there are no reports of that data being misused.

A routine traffic stop. Now look at what this Maryland mom pulls from her car's trunk. That would be three children. Lanora Lucas told police the kids just wanted to ride in the trunk. This morning, Lucas was sentenced to probation. She could have received up to 15 years in prison for reckless endangerment.

And Interpol has put out notices for a former Pakistani Prime Minister Benazir Bhutto and her husband. The notices of arrest warrants were issued at Pakistan's request. The two are wanted on corruption charges there. A spokesman for Bhutto's political party tells the Associated Press the couple is now here in the U.S. and plans to challenge the notices.

Good morning to you. I'm Daryn Kagan at CNN Center in Atlanta.

From the Palestinian territories in the Middle East, to the corridors of power in Washington. We are following several developing stories at this hour. In fact, President Bush has called for a news conference to begin just minutes from now. CNN crews are mobilized for Mr. Bush's first solo news conference in more than a month. In Washington, we have David Ensor, at the Pentagon Jamie McIntyre, and at the White House CNN's Elaine Quijano sets the stage.

Ladies first. Elaine, good morning. ELAINE QUIJANO, CNN CORRESPONDENT: Good morning to you, Daryn.

Well, the State of the Union Address is less than a week away. And this news conference by President Bush is really a chance to get ahead of that, build up momentum ahead of that event. An administration officials says that this morning President Bush will begin with an opening statement essentially previewing themes of that address set to take place on Tuesday. He'll talk about what he sees as key issues in the year ahead. They include the economy, also his Supreme Court Nominee Judge Samuel Alito and, of course, the ongoing war on terrorism.

Now on that front, the White House this week has been vigorously engaged in a campaign to push back against critics of the government's controversial surveillance program. In fact, we saw the president this week travel to the headquarters of the NSA, the National Security Agency, which is conducting that monitoring. Essentially the president trying to underscore his position that he believes the program is both legal and necessary as part of the war on terror.

Critics, though, as you know, have called the program illegal. They, in fact, say it threatens civil liberties and privacy rights and, in fact, there will be hearings in the Senate on the Senate Judiciary Committee side headed up by Republican Senator Arlen Specter on February 6th. So that's just one of the topics likely to come up.

Also, as you mentioned, the Palestinian elections. Certainly the president will likely be asked about that as well. The White House so far has not issued any kind of official comment, any kind of official reaction. But we know that the president yesterday, in an interview that was published today in "The Wall Street Journal," said essentially that Hamas must renounce its pledge to destroy Israel if, in fact, the United States would deal with Hamas. So all of those topics likely to come up.

Daryn, it's interesting to note, this will be a news conference taking place in the briefing room at the White House. We've seen the president many times hold news conferences in the East Room, formal settings. This will be somewhat more informal, if you will, in the briefing room here at the White House.

Daryn.

KAGAN: And a little bit more cramped, would you say?

QUIJANO: Yes, very much so.

KAGAN: Yes, down in the basement. All right, Elaine, thank you.

Let's get more and bring in David Ensor, talk about the topic of the NSA and the controversial domestic wiretapping program.

David.

DAVID ENSOR, CNN CORRESPONDENT: Well, Daryn, the administration, after being knocked back on its heels at first when "The New York Times" reported that the president had ordered the secret surveillance that affects some Americans, has now decided that this is actually a winning political issue. And as Elaine mentioned, has come out swinging, in effect, saying that the president made the right decision, that this is a very limited and targeted program, and that it makes the country safer. They believe that this is a winning political issue for Republicans in the upcoming elections and you'll probably hear the president very confidently state that again today.

But the seismic earthquake that's occurred in the Palestinian elections is likely to get some real attention from the White House press corps. This raises a lot of questions. Not only will the U.S. deal with Hamas, if it is indeed the winner of the Palestinian elections, but how will this impact the Israeli elections? How will Europe treat this?

We got a first signal from Condoleezza Rice, the secretary of state, who spoke in Europe and said, as Elaine mentioned, that the U.S. position will be Hamas must renounce its pledge to destroy Israel. But there are a host of complex issues here. Hamas does have choices to make, but so does the rest of the world.

Daryn.

KAGAN: All right, David Ensor, thank you.

Talking about the politics of this and what the Democrats might do to counter what the president has to say, let's bring in our Senior Political Analyst Bill Schneider.

Bill.

BILL SCHNEIDER, CNN CORRESPONDENT: Well the issue of Hamas, which is likely to be the top issue with this news conference, is not a big issue that separates Democrats and Republicans. It's one of the few that does not. Right now, of course, the Democrats are waiting to hear what the president says. This is going to be a very difficult period for Middle East diplomacy.

Of course, one shoe has fallen. The Palestinian elections have happened. Hamas clearly has broken through and it has scored big gains for the first time in the Palestinian parliament. It put up candidates. We'll see if President Abbas includes Hamas members in the government of the Palestinian authority.

But the second step is going to be the Israeli elections at the end of March. And, of course, this is going to be a central issue there. Only after those elections, when you have an Israeli government, a Palestinian authority, in place, will the United States have to reassess how it can possibly begin to restart that road map that Bush has been talking about now for a couple of years.

KAGAN: All right, Bill, we'll be back to you after we listen in to the president.

Let's go to Jamie McIntyre at the Pentagon and talk about this other headline of the week, and that was the report that came out about the U.S. army and how that it's reaching, according to this particular report, a breaking point and would not be able to stay at the current levels and outlast the insurgency in Iraq. We expect to hear from the president about that, Jamie, do you think?

JAMIE MCINTYRE, CNN CORRESPONDENT: Well, I don't know. Here's something to listen for. See if he uses the phrase "the long war," because that's the new catchphrase at the Pentagon for what used to be called "the global war on terrorism," reflecting the fact that this is going to be something that's fought over a long period of time. Of course, the big deal at the Pentagon now is the fact that the new budget and every four year strategy review coming out right after the president's State of the Union Address. That will give an idea of what the priorities are. But it will have more of an emphasis on special forces, a lot of changes to make U.S. troops better able to counter terrorism abroad and also at home.

But what you won't see is a big increase in the size of the U.S. military because the Pentagon is stubbornly assisting that if it reorganizes the U.S. military so it can use it more effectively, it doesn't have to make it bigger. And that's a big sticking point. As you said, two reports out yesterday suggesting that the way the military is operating now, it just can't sustain the level of operations that are going on in Iraq and Afghanistan and around the world. Yesterday Defense Secretary Rumsfeld took real exception to that, insisting that with a military of 2 million people, if you count the guard and the reserve, there's no reason the U.S. can't sustain 138,000 troops in Iraq, even as it has plans to lower the number this year.

Daryn.

KAGAN: All right, Jamie, thank you for that. Let's get more now on what's happening with the developing with the Palestinian elections and go to Guy Raz who joins us from the Middle East now.

Guy.

GUY RAZ, CNN CORRESPONDENT: Daryn, it's the biggest shake-up in Palestinian political history. For the first time, a group widely associated by the international community with terrorism will form the next Palestinian government. Hamas is better known abroad for suicide bombings and rocket attacks against Israel. But to Palestinians, it's widely seen as an organization that has a wide network of social agencies and a group committed to good and honest governance.

Now Palestinian voters were essentially disenchanted with years and decades long rule of Fatah, the movement founded by the late Palestinian President Yasser Arafat. A movement beset by allegations of corruption over the past several years and they've dealt that movement a blow. Hamas will dominate the next Palestinian authority government.

The main challenge for this Hamas-led government now will be on the diplomatic front. Of course, the group is considered a terrorist organization by the United States, the European Union, Israel, several other countries around the world. It's a group that does not recognize Israel and remains committed to its destruction.

So the question now is how this Hamas victory will affect any future negotiations between Israel and the Palestinian authority.

Daryn.

KAGAN: Guy Raz. Thank you, Guy.

And we're going to have all of our players stand by. We'll get back to them as we listen in to the president as he holds this somewhat of a surprise news conference. And we'll get to that, the president, about five minutes away. We'll fit in a quick break.

(COMMERCIAL BREAK)

KAGAN: Welcome back. We expect any minute now President Bush to walk into the briefing room of the White House and answer reporters questions. He just announced within basically the last hour that he would be holding this news conference. We have a lot of our key players along for the ride to give you the best coverage. We have Elaine Quijano, David Ensor, Jamie McIntyre and Bill Schneider.

David, let's get back to you on this NSA wiretapping topic. The president went and addressed the NSA yesterday, did he not?

ENSOR: He did and he praised the workers over at the National Security Agency and said that their work makes the country safer. As we mentioned, clearly the administration believes that although they didn't want it to become public that the president had secretly ordered a wiretapping program that includes covering some American, their international calls and so on, that, in fact, this is a political plus for the administration. That is the public position they're taking and that's the position he has been putting forward. He is saying that these wiretaps are limited, they're targeted and they make the nation safer.

Now, of course, there are many on the Democratic side, and some Republicans too, who question that and who argue that the president may have broken the law by ordering this program. There's going to be plenty more debate on this in Washington in the coming weeks and the president, obviously, will speak about it now.

KAGAN: And I'd like to welcome into our coverage Dana Bash, our White House correspondent. She is in the briefing room right now.

Dana, a question for you.

The State of the Union Address is just days away. Why would he come out and hold this news conference today?

DANA BASH, CNN CORRESPONDENT: That's right, five days away. It is somewhat unusual. The president, of course, is going to give a major address to the nation on next Tuesday, talking about the themes and the agenda he hopes to accomplish in the upcoming years. So this is kind of unusual. But this is not unusual if you think about what the White House has been doing over the past week and even over the past several weeks, which is very much trying to control the debate. Trying to have not just the president's aides, but the president himself out there talking about the issues they want to talk about, the way they want to talk about them.

As you have been talking about with our colleagues, the NSA has been the thing that the White House has been talking about all week. This is going to be another chance for the president to talk about it, to try to define it in his terms. But we also, of course, have major issues that have been happening in the news. Like the Palestinian elections. I'm going to do this gracefully, try to turn around and sit down while we wait for the president, Daryn.

KAGAN: OK.

BASH: But the Palestinian elections, of course, is going to be a major topic. It was about a year ago that the president stood before the nation at his inaugurate address and talked about the need for democracy around the world. That democracies are crucial. That democracies don't attack one another.

Well, he's going to have to answer today, hopefully, how, in fact, he's going to reconcile the fact that a democracy elected a group that he considers a terrorist organization. So those are just some of the issues that he's going to talk about. But interesting that he is, we expect, going to start talking about some of the themes in his State of the Union Address.

And here's the president, Daryn.

KAGAN: All right. Let's listen in. Here's President Bush at the White House in the briefing room.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I thank you all very much. Look forward to answering some of your questions here in a minute.

I'm also looking forward to going up to Capitol Hill next Tuesday to give my State of the Union address. I thought it probably best not to practice my speech in front of you here, so you'll pay attention to it when I deliver it. But I do want to give you some thoughts about what I'm thinking about.

First, I recognize that we live in a momentous time. And for those of you watching, we seem to have a mechanical flaw.

(LAUGHTER)

Are you wearing your helmets?

(LAUGHTER)

QUESTION: (inaudible) renovation.

BUSH: Exactly.

I'll take it up with the first lady. I'm going to remind people we live in historic times. And that we have a chance to make decisions today that will help shape the direction of events for years to come.

I'm going to continue to talk about an optimistic agenda that will keep -- that will remind folks we've got a responsibility to lead. We've got a responsibility to lead to promote freedom and a responsibility to continue to put policies in place that will let us be a leader when it comes to the economy and the world.

Now, I recognize this is an election year, but I believe that we can work together to achieve results. In other words, I think we can set aside the partisanship that inevitably will come with an election year and get some stuff done. And that's what I'm going to call Congress to do.

We've got much work together to protect our nation's security. I'm going to continue to do everything within my authority to protect the American people.

We're going to stay on the offense in the war against terror. We'll hunt down the enemies in Afghanistan and Iraq and elsewhere. We'll continue our terrorist surveillance program against Al Qaeda.

Congress must reauthorize the Patriot Act so that our law enforcement and intelligence and homeland security officers have the tools they need to root out the terrorists, terrorists who could be planning and plotting within our borders.

And we will do all this and at the same time protect the civil liberties of our people.

We're going to continue to lead the cause of freedom in the world. The only way to defeat a dark ideology is through the hopeful vision of human liberty.

Here at home we also -- we've got great opportunities. And to seize those opportunities, we have got to lead.

Our economy is growing. It is strong. This economy's created millions of new jobs. Yet it's an economy that is changing rapidly.

And we live in a competitive world. And so policies must be put in place to recognize the competition of the global economy and prepare our people to be able to continue to compete so America can continue to lead.

Of course, we'll talk about fiscal policy in my State of the Union, talk about the Congress to be wise about how we spend the people's money and to make the tax cuts permanent.

I will talk about initiatives to make sure our health care and education and energy recognizes the realities of the world in which we live today and anticipates the problems of the world tomorrow so that we can remain competitive. I will talk about the values that are important for our country and remind people we show the character and compassion of America by taking focused action to confront disease and to help devastated areas of our country -- areas that have been devastated by natural disasters and ensure that medical research is conducted in a manner that recognizes the dignity of every human life.

I look forward to the speech; I really do.

As you can imagine, it's an interesting experience to walk out there and not only talk to members of Congress but, as importantly, talk to the American people.

I'm also looking forward to the Senate finishing its business on the confirmation of Sam Alito. He's a man of character and he's a man of integrity. He understands that the role of a judge is to interpret the law. He understands the role of a judge is not to advance a personal or political agenda.

Yesterday I had an interesting experience standing with his law clerks. And I started reading the notes that, of course, were adequately prepared for me.

And the first person said he's a Democrat who supports Alito. The second person was a person who voted Green who supported Alito. The third a left-leaning woman, Democrat, who supported Alito. The fourth person I talked about was somebody who worked in the John Kerry campaign who supported Alito.

I was wondering, "Where are those Republican clerks?"

My point is is that he has broad support from people who know him, people from both political parties. Because he's a decent man who's got a lot of experience. And he deserves an up-or-down vote on the floor of the Senate.

I was interested in Ed Rendell's comments. He's the governor of Pennsylvania. He was the former chairman of the Democrat National Committee. He did not like the way the debate was headed. He believed that Sam Alito should be confirmed, and so do I.

The Senate needs to give him an up-or-down vote as quickly as possible.

Listen, thank you all for giving me a chance to share some thoughts with you. Be glad to answer some questions.

QUESTION: Mr. President, is Mideast peacemaking dead with Hamas' big election victory? And do you rule out dealing with the Palestinians if Hamas is the majority party?

BUSH: Peace is never dead, because people want peace. I believe -- and that's why I articulated a two-state solution early in my administration so that -- as a vision for people to work toward, a solution that recognized that democracy yields peace and the best hope for peace in the Middle East is two democracies living side by side. So the Palestinians had an election yesterday, the results of which remind me about the power of democracy.

You see, when you give people the vote, you give people a chance to express themselves at the polls, they -- and if they're unhappy with the status quo, they'll let you know.

That's the great thing about democracy: It provides a look into society.

And yesterday, the turnout was significant, as I understand it. And there was a peaceful process as people went to the polls. And that's positive.

What was also positive is that it's a wakeup call to the leadership.

Obviously, people were not happy with the status quo.

The people are demanding honest government. The people want services. They want to be able to raise their children in an environment in which they can get a decent education and they can find health care.

And so the elections should open the eyes of the old guard there in the Palestinian territories.

I like the competition of ideas. I like people that have to go out and say, "Vote for me and here's what I'm going to do." There's something healthy about a system that does that.

And so the elections yesterday were very interesting.

On the other hand, I don't see how you can be a partner in peace if you advocate the destruction of a country as part of your platform.

And I know you can't be a partner in peace if you have a -- if your party has got an armed wing.

And so the elections just took place. We will watch very carefully about the formation of the government.

But I will continue to remind people about what I just said: that if your platform is the destruction of Israel, it means you're not a partner in peace. And we're interested in peace.

I've talked to Condi twice this morning. She called President Abbas. She also is going to have a conference call today with the quartet about how to keep the process on the road to peace.

QUESTION: If I can follow up, sir...

BUSH: Yes.

QUESTION: ... are you cautioning Prime Minister Abbas not to resign... BUSH: We'd like him to stay in power. I mean, we'd like to stay in office. He is in power; we'd like him to stay in office. Sorry to interrupt.

I knew this was a two-part question, so I tried to head it off.

QUESTION: Will this affect aid to the Palestinians? And will you be able to work with Hamas, assuming they take on a large share of the government?

BUSH: Well, I made it very clear that the United States does not support political parties that want to destroy our ally Israel, and that people must renounce that part of their platform.

But the government hadn't formed yet. They're beginning to talk about how to form the government. And you question on Abbas was a good one. And our message to him was, we would hope he would stay in office and work to move the process forward.

Again, I remind people, the elections -- democracy can open up the world's eyes to reality by listening to people. And the election process is healthy for society, in my judgment.

In other words, one way to figure out how to address the needs of the people is to let them express themselves at the ballot box. And that's exactly what happened yesterday.

And you'll hear a lot of people say, "Well, aren't we surprised at the outcome?" or this, that or the other. If there is corruption, I'm not surprised that people say, "Let's get rid of corruption." If government hadn't been responsive, I'm not the least bit surprised if people say, "I want government to be responsive."

And so it was an interesting day yesterday in the -- as we're watching liberty begin to spread across the Middle East.

QUESTION: Mr. President, good morning.

I have a different question, but I'd like to pin you down on this point about Hamas, because I don't think you completely answered it.

Are you ruling out that dealing with a Palestinian government comprised in part of Hamas?

We don't have a government yet, so you're asking me to speculate on what the government will look like.

I have made it very clear, however, that a political party that articulates the destruction of Israel as part of its platform is a party with which we will not deal.

QUESTION: Can I just...

BUSH: No, that's...

QUESTION: Well, sir, I'm sorry... BUSH: It's not fair to the other people.

QUESTION: No, I'm just following...

BUSH: You're trying to hoard.

QUESTION: I'm not trying...

(LAUGHTER)

... I have a question about New Orleans, sir. The...

BUSH: Now, this is -- I agree with you. I can see the expressions on your colleagues' faces that it's...

QUESTION: Well, I hope it'll be worth your time.

BUSH: They don't think so.

(LAUGHTER)

QUESTION: The administration has rejected a local plan to rebuild New Orleans. And your administrator down there, Don Powell, said that the focus for federal money should be to rebuild for those 20,000 homeowners who are outside the flood plain.

Critics, local officials, say that that ignores so many people in New Orleans: the poorest of the poor, the hardest-hit areas, people who didn't have flood insurance, who didn't expect the levies to break. And they feel, sir, that this is a certain betrayal of your promise that New Orleans would rise again.

So why did you reject it? And do you think that the people of New Orleans have to expect that there's a limit for the extent to which the city can be rebuilt?

BUSH: The Congress has appropriated $85 billion to help rebuild the Gulf Coast. And that's just a good start. It's a strong start. It's a significant commitment to the people whose lives were turned upside by that hurricane.

Secondly, we have said that we look forward to the time when each state develops its recovery plan. I, early on in the process, said it's important for the folks in Mississippi, too, to come forward with a recovery plan. And it's important for New Orleans and the state of Louisiana to work together to develop a state recovery plan.

And the reason I said that because I was aware that folks in Congress will want to spend money based upon a specific strategy. In other words, we've got to get comfortable with how to proceed.

The plan for Louisiana hasn't come forward yet.

And I urge the officials, both state and city, to work together so we can get a sense for how they're going to proceed. Now having said that, I recognize there were some early things we needed to do to instill confidence. One of them was to say that we will make the levees stronger and better than before and study further strengthening of the levees.

In other words, I recognize that people needed to be able to say, "Well, gosh, we can't even get started until we've got a commitment from the federal government on the levees."

A lot of the money we're spending is prescribed by law. But we also went a step further and proposed to Congress -- and they accept -- the CDBG monies, so that monies can actually go directly to individual families that need help.

We'll continue to work with the folks down there. But I want to remind the people in that part of the world: $85 billion is a lot.

And secondly, we were concerned about creating additional federal bureaucracies, which might make it harder to get money to the people.

QUESTION: Is there a limit?

I have five questions, sir. Hope you'll indulge me.

(LAUGHTER)

BUSH: It's only two and half times more.

QUESTION: On the NSA eavesdropping program, there seems to be growing momentum in Congress to either modify the existing law or write some new law that would give you the latitude to do this and at the same time ensure that people's's civil liberties are protected.

Would you be resistant to the notion of new laws if Congress were to give you what you need to conduct these operations?

BUSH: The terrorist surveillance program is necessary to protect America from attack.

I asked the very questions you asked when we first got going. Let me tell you exactly how this happened.

Right after September the 11th, I said to the people, "What can we do? Can we do more?" -- the people being the operators, a guy like Mike Hayden -- "Can we do more to protect the people? There's going to be a lot of investigation and a lot of discussion about connecting dots. And we have a responsibility to protect the people, so let's make sure we connect the dots."

And so he came forward with this program. It wasn't designed in the White House. It was designed where you expect it to be designed, in the NSA.

Secondly, I said, "Before we do anything, I want to make sure it's legal." And so we had our lawyers look at it. And as part of the debate, the discussion with the American people as to the legality of the program, there's no doubt in my mind it is legal.

And thirdly, "Will there be safeguards to safeguard the civil liberties of the American people?"

There's no doubt in my mind there are safeguards in place to make sure the program focuses on calls coming from outside the United States in, with an Al Qaeda -- with a belief that there's an Al Qaeda person making the call to somebody here in the States, or vice versa, but not domestic calls.

And so, as I stand here right now, I can tell the American people the program's legal, it's designed to protect civil liberties and it's necessary.

Now, my concern has always been that, in an attempt to try to pass a law on something that's already legal, we'll show the enemy what we're doing.

And we briefed Congress -- members of Congress. We'll continue to do that.

But it's important for people to understand that this program is so sensitive and so important that if information gets out to how we run it or how we operate it, it'll help the enemy.

And so, of course, we'll listen to ideas. But I want to make sure that people understand that if the attempt to write law makes this program -- is likely to expose the nature of the program, I'll resist it.

And I think the American people understand that.

Why tell the enemy what we're doing if the program is necessary to protect us from the enemy? And it is.

And it's legal. And we'll continue to brief Congress. And we review it a lot. And we review it not only at the Justice Department but with a good legal staff inside NSA.

QUESTION: What do you fear or your staff fear about releasing the photograph of Jack Abramoff with you, Mr. President? You say you don't fear anything; tell us why you won't release this.

BUSH: She's asking about a person who admitted to wrongdoing and who needs to be prosecuted for that.

There is a serious investigation going on, as there should be. The American people have got to have confidence in the ethics of all branches of government.

You're asking about pictures. I had my picture taken with him, evidently.

I've had my picture taken with a lot of people.

Having my picture taken with someone doesn't mean that I'm a friend with him or know him very well. I've had my picture taken with you...

(LAUGHTER)

... at holiday parties.

My point is, I mean, there's thousands of people that come through and get their pictures taken.

I'm also mindful that we live in a world in which those pictures will be used for pure political purposes, and they're not relevant to the investigation.

QUESTION: Do you know how many pictures?

BUSH: I don't have any idea.

QUESTION: Thank you, Mr. President. Good morning.

On the subject of Iran, what parameters might the U.S. be willing to accept Iran having a nuclear power program?

And to the extent that you've said in the past that the United States supports the Iranian people, would you support expedited legislation or a move that would send resources to such groups in Iran that might hasten regime change or democratic reform?

BUSH: I have made it clear that I believe that the Iranians should have a civilian nuclear power program under these conditions: that the material used to power the plant would be manufactured in Russia, delivered under IAEA inspectors to Iran, to be used in that plant, the waste of which will be picked up by the Russians and returned to Russia.

I think that is a good plan. The Russians came up with the idea and I support it.

And the reason why I think it makes sense is because I do believe people ought to be allowed to have civilian nuclear power. However, I don't believe nontransparent regimes that threaten the security of the world should be allowed to gain the technologies necessary to make a weapon.

And the Iranians have said, "We want a weapon." And it's not in the world's interests that they have a weapon.

And so we are working hard to continue the diplomacy necessary to send a focused message to the Iranian government.

And that is, "Your desires for a weapon are unacceptable."

Part of that diplomacy was to provide an acceptable alternative to the Iranian desire to have a civilian nuclear power industry. And secondly, we will support freedom movements all around the world. I've constantly talked about today's reformers will be tomorrow's leaders. And, therefore, we will work with groups that demand for people to be given the natural rights of men and women. And that right is to live in a free society.

QUESTION: You talked about Jack Abramoff in the context of pictures, but it may not necessarily be about pictures. He also had some meetings with some of your staff.

BUSH: So you remember: You ran on the idea of restoring honesty and integrity to the White House.

QUESTION: So why are you letting the critics, perhaps, attack you and paint you with, maybe, a guilt by association? Why not just throw open your books and say, "Look, here's a meeting that we had..."

BUSH: There is a serious investigation going on by federal prosecutors, and that's their job. And if they believe something was done inappropriately in the White House, they'll come and look, and they're welcome to do so. There's a serious investigation that's going on.

QUESTION: But, sir, do you want to tell the American people, "Look, as I promised, this White House isn't for sale and I'm not for sale"?

BUSH: Look, it's hard for me to say I didn't have pictures with the guy when I did. But I have also had pictures with thousands and thousands of people. I mean, people -- it's part of the job of the president to shake hands with people and smile.

(LAUGHTER)

And I do.

And the man contributed to my campaigns, but he contributed, either directly or through his clients, to a lot of people in Washington, and this needs to be cleared up so the people have confidence in the system.

QUESTION: Mr. President, the U.S. government spent about $2 million to help promote the Palestinian Authority in this week's elections.

QUESTION: I wonder whether you feel like it's consistent with your push to spread democracy around the world if the U.S. puts its thumb on its scale or there are moments when it's OK to compromise that because you want to keep an organization that's a terrorist thereat out of government.

BUSH: I talked to Secretary Rice about the story that you're referring to. And what she told was that this money was part of a USAID package that had been in the pipeline for a while.

The allegation or the insinuation that we were funding a political effort just simply isn't the case, as far as I can tell.

QUESTION: It was designed to promote the image of the Palestinian Authority among its own people, which is...

BUSH: As I said, this money was part of a USAID package. We had -- I proclaimed, I made it very clear that Jim Wolfensohn was going to be in the region with an economic aid package to help the Palestinian people.

Our programs are aimed to help the people.

QUESTION: I'm talking about who gets credit. Part of the thing was...

BUSH: Obviously...

QUESTION: Credit would go to the authorities.

BUSH: Our attempt was to help the Palestinian people through an active USAID program. And you saw the results of the election.

QUESTION: Why then not disclose USAID involvement?

BUSH: It is disclosed. You just disclosed it.

(LAUGHTER)

Were you trying to help the man out there?

OK, yes?

QUESTION: Members of your administration have said that the secret eavesdropping program might have prevented the September 11th attacks. But the people who hijacked the planes on September 11th had been in this country for years having domestic phone calls and e- mails.

So how specifically can you say that?

BUSH: Well, Michael Hayden said that because he believes that, had we had the capacity to listen to the phone calls from those from San Diego elsewhere, we might have gotten information necessary to prevent the attack.

And that's what he was referring to.

QUESTION: But they were domestic calls...

BUSH: No, domestic -- outside -- we will not listen inside this country. It is a call from Al Qaeda or Qaeda affiliates either from inside the country and out or outside the country in, but not domestically.

QUESTION: May I ask you again, why won't you release the photos of yourself and Jack Abramoff?

BUSH: I just answered the question.

QUESTION: Your explanation on the monitoring program seems to say that when the nation is at war, the president, by definition, can order measures that might not be acceptable or even perhaps legal in peacetime. And this seems to sound like something President Nixon once said, which was, "When the president does it, then that means that it's not illegal in areas involving national security."

So how do the two differ?

BUSH: Well, I said yesterday that other presidents have used the same authority I've had to use technology to protect the American people.

Other presidents, most presidents most presidents believe that during their -- during a time of war that we can use our authorities under the Constitution to make decisions necessary to protect us.

Secondly, in this case, there is an act passed by Congress in 2001 which said that I must have the power to conduct this war using the incidents of war. In other words, we believe there's a constitutional power granted to presidents as well as, this case, a statutory power. And I'm intending to use that power.

Congress says, "Go ahead and conduct the war. We're not going to tell you how to do it."

And part of winning this war on terror is to understand the nature of the enemy and to find out where they are so we can protect the American people.

There'll be a legal debate about whether or not that I have the authority to do this. I'm absolutely convinced I do. Our attorney general's been out describing why.

And I'm going to continue using my authority. And that's what the American people expect.

QUESTION: Mr. President, the Pentagon recently studied U.S. forces overseas and concluded that between Iraq and Afghanistan that the military was very seriously overextended.

Defense Secretary Rumsfeld told us yesterday, "Well, that's really not what the study concluded." But this morning General Casey told us in Iraq, U.S. forces there are stretched.

Who's right here?

BUSH: I haven't seen General Casey's comments -- his specific comments.

I will tell you this: that after five years of war, there is a need to make sure that our troops are balanced properly, that threats are met with capability. And that's why we're transforming our military. The things I look for are the following: morale, retention and recruitment. And retention's high, recruitment is meeting goals and people are feeling strong about the mission.

But I also recognize that we've got to make sure that our military is transformed. And that's what's taking place right now, we're transforming the United States Army so that capability and the threats are better aligned.

QUESTION: Not overextended then?

BUSH: If the question is whether or not we can win victory in Iraq, our commanders will have the troops necessary to do that.

If the question is, "Can we help keep the peace in a place like the Far East?" absolutely.

And let me use the Far East as an example of what I'm talking about.

There were some 30,000 on the South Korean peninsula. As you might remember, we reduced the amount of manpower and replaced it with technology.

Some people at the time said, "Wait a minute, they're lessening their commitment to peace and security in the Far East by moving people out."

I made the case that, "No, what we're doing is replacing manpower; we're transforming our military presence in South Korea to be able to meet the threats of the 21st century."

And that's what you're seeing all throughout our military. This is a time where we've been in this war against terror for five years and at the same time transforming.

And I think if you look at what our commanders are saying and what our people like Pete Schoomaker are saying is that this transformation is going to make it more likely America will be able to continue in the out-years of doing what we need to do to keep the peace.

QUESTION: Mr. President, do you think you need to be more aggressive with vetoing, or at least threatening to veto, more spending bills this year?

I mean, every year you say, "I want Congress to show spending restraint; this is important to our budget and our economy," but do you think they're doing enough? Do you need to be more aggressive?

BUSH: Yes, I do think they are when they meet our budget targets.

And here's the way it works. We sit down and say, "Here's what we'd like you to do. We'd like you to reduce nonsecurity discretionary spending." We present a budget target. And they meet them. They have met those targets.

And I am pleased that I've got a working relationship with the speaker and Leader Frist and other members of Congress to help meet those targets.

Go ahead; you got a follow-up?

QUESTION: So essentially, then, you think everything is going fine with the budget and there's no need to use a veto or anything like that?

BUSH: Well, I'm fully prepared to use the veto if they overspend.

They got a chance now to continue to show the American people that they're willing to have fiscal discipline by voting on the reconciliation package in the House of Representatives.

We've still got a lot of work to do, don't get me wrong. And I'll present a -- in the process of laying out a budget that'll continue to eliminate programs that don't work or that are duplicative in nature, one that says we can cut our deficit in half by 2009, and make sure the American people still get their tax relief.

We don't need to be running up the taxes right now, in my judgment. And I think it is -- people said, "Well, let's raise the taxes and balance the budget." That's not how it works. They're going to raise your taxes and they're going to continue to expand the government. And I understand that.

Now, in terms of how they spend the money, once they meet the budget targets, that's going to be an interesting discussion on Capitol Hill, this business about earmarks and people making special deal in the budget. And there needs to be earmark reform.

And we look forward to working with responsible members on the Hill about earmark reform.

QUESTION: Mr. President, last year, your administration imposed a package of economic sanctions on North Korea. Now North Korea says it will not come back to the table on the nuclear talks unless those sanctions go. South Korea is warning of a dispute on the issue.

Would you consider removing them, suspending them, making some gesture to get North Korea back to the negotiating table?

BUSH: Actually, I think what you're referring to is the fact that we are cutting off the transfer of monies generated by illicit activities. When somebody's counterfeiting our money, we want to stop them from doing that. And so we are aggressively saying to the North Koreans, "Just, you know, don't counterfeit our money."

And we are working with others to prevent them from illicit activity. That's different from economic sanctions. And I know we think it's very important for the North Koreans to come back to the table.

There's a six-party talk framework that is hopeful and positive for them. It requires them to make some, you know, difficult decisions. And, of course, one of them is to get rid of their nuclear arsenal.

But we're more than willing to -- and want the six-party talks to continue forward. I think the framework is a framework that can eventually yield to a peaceful settlement of the issue.

But the other issue is one I just want to make sure I clarify for you why we're doing what we're doing.

QUESTION: You see this as completely separate then, sir, there's no room to suspend them or...

BUSH: Well, if somebody's cheating on us, we need to stop it. I mean, the American people -- if we know people are counterfeiting our money, they expect the government to act.

And there is no compromise when it comes to, you know, "Hey, come back to the table so you can counterfeit our money, just, you know, counterfeit 20s and not 100s or whatever it is." I mean, no. We are going to uphold the law and protect the currency of the American people.

QUESTION: Stepping back from the immediate NSA debate that's going on right now, Vice President Cheney recently said that the White House is reasserting its executive power.

Is the NSA program part of that effort? And what do you say to Democrats who charge that you're abusing your constitutional authority?

BUSH: I would say that there has been a historical debate between the executive branch as to who's got what power. And I don't view it as a contest with the legislative branch. Maybe they view it as a contest with the executive; I just don't.

I view the decisions I made, particularly when it comes to national security, as necessary decisions to protect the American people. That's the lens on which I analyze things.

And I understand we're at war with an enemy that wants to hit us again. Osama bin Laden made that clear the other day and I take his words very seriously.

And I also take my responsibility to protect the American people very seriously.

And so we're going to do what is necessary within the Constitution and within the law, and at the same time guaranteeing peoples' civil liberties, to protect the people.

And that's how I look at this debate.

Now, there's all kinds of people taking a step back and saying, "Well, this is this. This is that." And I recognize throughout history people -- there have been a debate about legislative power and executive power.

Part of the questions asked here today, kind of, reflect that debate.

I'm going to leave that to the lawyers. I believe I've been hired by the people to do my job, and that's to protect the people.

And that's what I'm going to do, mindful of my authorities within the Constitution, mindful of our need to make sure that we stay within the law, and mindful of the need to protect the civil liberties of the people.

QUESTION: Mr. President, though -- this is a direct follow-up to that -- the FISA law was implemented in 1978 in part because of revelations that the National Security Agency was spying domestically.

What is wrong with that law that you feel you have to circumvent it and, as you just admitted, expand presidential powers?

BUSH: You said that I have to "circumvent" it. Wait a minute, that's a -- it's like saying, "You know, you're breaking the law." I'm not.

See, that's what you got to understand: I am upholding my duty and at the same time doing so under the law and with the Constitution behind me. That's just very important for you to understand.

Secondly, the FISA law was written in 1978. We're having the discussion in 2006. It's a different world.

And FISA's still an important tool. It's an important tool, and we still use that tool.

But, also -- and I looked. I said, "Look, is it possible to conduct this program under the old law?" And people said, "It doesn't work in order to be able do the job we expect to us do."

And so, that's why I made the decision I made.

And, you know, "circumventing" is a loaded word. And I refuse to accept it, because I believe what I'm doing is legally right.

QUESTION: There's hearings on Capitol Hill starting February 6th regarding...

BUSH: Regarding that point, right.

And Al Gonzales has recently given a speech laying out the administrative position. And I'm sure you analyzed it carefully.

QUESTION: Sir, you said a few minutes ago the United States needs to continue to lead in the cause of freedom around the world.

And yet in recent weeks a couple of groups, Human Rights Watch and Amnesty International, have criticized the U.S. handling of terrorist suspects. They say that has undermined the U.S. voice as a champion of human rights and even, perhaps, undercut a generation of progress in human rights.

And my question, sir, is how do you respond to that?

BUSH: I haven't seen their report, but if they're saying we tortured people, they're wrong, period.

QUESTION: Could you call on your Texas straight talk and make a clear and unambiguous statement today that no American will be allowed to torture another human being anywhere in the world...

BUSH: Yes.

QUESTION: ... at any time?

BUSH: No American will be allowed to torture another human being anywhere in the world.

And I signed the appropriations bill with the McCain amendment attached on it because that's the way it is.

I know some have said, "Well, why did he put a qualifier in there?" And one reason why presidents puts qualifiers in is to protect the prerogative of the executive branch. You see, what we're always doing is making sure that we make it clear that the executive branch has got certain responsibilities.

Conducting war is a responsibility in the executive branch, not the legislative branch.

But make no mistake about it: The McCain amendment is an amendment we strongly support and will make sure it's fully effective.

QUESTION: Mr. President, you mentioned earlier that this an election year. Republicans are expressing great confidence that they're going to be able to take back the Congress.

BUSH: Who are?

QUESTION: The Democrats, I mean, are expressing...

BUSH: We already have the Congress.

(LAUGHTER)

QUESTION: They say that they can use issues such as corruption and the war in Iraq and high energy prices against Republicans and against you.

How much do you plan to go out and campaign (inaudible)? BUSH: I'm looking forward to the campaign, but I'm also looking forward to reminding people we have a responsibility to get some things done. And that's part of what the State of the Union's going to be about.

But no, I'm looking forward to get out. I've got one more off- year campaign in me as a sitting president, and I'm looking forward to it. As you know I like to get out and tell people what's on my mind, explain to people we're a party with ideas; we know how to lead; remind people of the stakes in the world in which we live and that we have a plan to deal with them.

And we've got a good record here in Washington, D.C. And I'm looking forward to talking about the economy, for example. It seems like a debate worthwhile having -- not only what we have done to make sure that we've overcome a lot of hurdles, but how to make sure policies are put in place that this economic growth continues, and remind people we've added a lot of jobs since April of 2003, that the economy is pretty strong this year given the fact -- in spite of the fact there were high energy prices and storms.

I look forward to debating people whether or not we ought to raise their taxes. I don't believe we should. Matter of fact, I think raising taxes will hurt the economy. And that's a debate I look forward to having with the people as we get closer to the 2006 elections.

Look, I don't blame people for saying, "I'm confident about the elections." Can you imagine right here at the election year saying, "I'm not very confident about the elections"? No wonder the Democrats are saying that.

But we've got a record, and a good one. And that's what I intend to campaign on and explain to people why I made the decisions I made and why they're necessary to protect the American people and why they've been necessary to keep this economy strong and why the policies we've got will keep this economy strong in the future.

And this election's about, you know, peace and prosperity. And I intend to get out there and campaign.

QUESTION: Mr. President, good morning.

BUSH: You're going to have to speak loudly, because somebody took your seat. Your name was on my seating chart, and you're not sitting down.

QUESTION: Isn't that a shame?

(LAUGHTER)

BUSH: You're probably going to blame it on me.

(LAUGHTER)

QUESTION: I'm going to let you pass that time. BUSH: Just trying to rattle you before you get going.

QUESTION: I know.

Mr. President, as you're saying Hurricane Katrina and the aftermath is one of your top priorities...

BUSH: Yes.

QUESTION: ... why is it that this administration is not allowing the senior staff, your senior staff that you conversated with prior to Hurricane Katrina, during and after, to testify, to interview or talk with congressional leaders?

BUSH: And why not push Michael Brown, who is now a private citizen, to go before them, as he is what many are calling the lynchpin for the whole issue?

Well, let me make sure you have the facts.

We have given 15,000 pages of White House documents to the investigators, congressional investigators. Some, I think it's 600,000 pages, administrative documents.

We have sent a fellow named Rapawanna (ph) up there to talk about -- he's a White House staffer -- to talk to the committee.

There have been a lot of interviews. There have been public testimony.

As a matter of fact, we are so concerned about this that we've started our own investigation to make sure that we understand the lessons learned from this. This is a problem we want to investigate thoroughly, so we know how to better respond on behalf of the American people.

And so we're fully cooperative with the members of the House and the Senate. And we'll do so without giving away my ability to get sound advice from people on my staff.

You see, here's -- and this is an issue that comes up all the time. And you might -- we've had several discussions like this since I've been the president.

If people give me advice and they're forced to disclose that advice, it means the next time an issue comes up, I might not be able to get unvarnished advice from my advisers.

And that's just the way it works.

But we've given thousands of pages of documents over for people to analyze.

QUESTION: Does that include Michael Brown?

BUSH: Pardon me? QUESTION: Does that include Michael Brown?

BUSH: People who give me advice -- it will have a chilling effect on future advisers if the precedent is such that, when they give me advice, that's going to be subject to scrutiny.

Now, we've analyzed -- we've given out all kinds of pages of documents for people and we're cooperating with the investigators. And that's important for the American people to know.

What's also important is we want to know how we can do a better job. And so we're having a lessons-learned investigation led by Fran Townsend.

And anyway, we need to know.

QUESTION: Sir, back on lobbying, never mind about the photographs, but can you say whether...

BUSH: Easy for a radio guy to say.

(LAUGHTER)

QUESTION: Can you say, sir, whether you were lobbied by Jack Abramoff or other lobbyists, and what your policy is about lobbyists meeting with senior staff?

BUSH: I, frankly, don't even remember having my picture taken with the guy. I don't know him.

And this investigation needs to look into all aspects of his influence on Capitol Hill. And if there are some in the White House, I'm sure they're going to come knock on the doors.

But I can't say I didn't ever meet him, but I meet a lot of people. And, you know, evidently he was, just like you were the other day, at the holiday party: came in, put the grip-and-grin, they clicked the picture and off he goes.

And that's just -- I take thousands -- well, somebody said I maybe take over 9,000 pictures this holiday season. And he -- obviously, we went to fund-raisers, but I've never sat down with him and had a discussion with the guy.

QUESTION: Do you meet with lobbyists?

BUSH: I try not to.

(LAUGHTER)

You know, have I ever met with one? Never having met with one -- if I ever said that, sure enough, you'll go find somebody, you know.

But, no, I don't have them come in.

Now, when, for example, people are helping on issues, like on promoting trade, you bet. We bring them in and I say, "Thank you for promoting CAFTA," or, "Thanks for working on the vote," or, "Thanks for helping on tax relief."

That may be -- if you consider that a meeting, the answer is yes, I'm sure I have, in a room full of people, as we either thank people for success in policy or thank people for going out of their way to help get a piece of legislation passed on the Hill.

Listen, thank you all very much. Looking forward to Tuesday evening. I hope you are as well.

Thank you.

KAGAN: President Bush wrapping up what was somewhat of a surprise news conference announced just about an hour before it got started and just days before the State of the Union Address. That's what he's talking about when he says he's looking forward to seeing all the reporters in a few days.

Touching on a number of topics, the State of the Union Address, what he plans to talk about there, the Palestinian elections, where Hamas had great success. The president said that he cannot see being a partner in peace with a party that has an armed wing, as well as declared it is an advocate of the destruction of Israel. Also talking about the NSA domestic spying program and Iraq, and a number of other topics as well.

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