3 June 2003

Transcript: Bush Reiterated Strong Dollar Policy, Official Says

Other G-8 leaders support U.S. economic policy, official says

President Bush reiterated to fellow leaders at the G-8 summit that his
administration supported a strong foreign exchange value for the U.S.
dollar, a senior administration official said.

The official, who asked not to be identified, made the remarks in an
early June 3 telephone briefing with reporters hours after the
president departed the G-8 summit in Evian, France.

"The President simply stated that the administration is for a strong
dollar, that we've had a consistent policy in favor of a strong dollar
and that that hasn't changed," the official said.

The foreign exchange value of the dollar has dropped over months
against the euro and yen, especially steeply after a statement by
Treasury Secretary John Snow created ambiguity about what the
administration meant by a strong dollar.

According to the official, the other G-8 leaders recognized the merits
of increasing the U.S. federal government budget deficits in the short
term to stimulate economic expansion.

The official said that the other leaders were "generally extremely
supportive" of U.S. economic policy and that Bush urged them to take
similarly decisive action although he did not prescribe specific
policy.

The G-8 comprises Russia plus the Group of Seven industrialized
countries Canada, France, Germany, Italy, Japan, the United Kingdom
and the United States.

Following is the transcript of the briefing:

THE WHITE HOUSE
Office of the Press Secretary
(Sharm el-Sheikh, Egypt)
June 3, 2003

BACKGROUND BRIEFING BY A SENIOR ADMINISTRATION OFFICIAL
VIA TELEPHONE ON THE G8 MEETINGS

12:05 A.M. (Local)

SENIOR ADMINISTRATION OFFICIAL: (in progress) -- I'm sorry, I gave a
brief introduction. I was waiting for questions.

QUESTION: The question from Dow Jones was, they had heard out of the
summit from other delegations that the President had reiterated the
strong dollar policy. And the question was, can you elaborate on that?

SENIOR ADMINISTRATION OFFICIAL: What you heard is absolutely correct.
The President simply stated that the administration is for a strong
dollar, that we've had a consistent policy in favor of a strong dollar
and that that hasn't changed. The great majority of the discussion
focused on the actions, though, that each country was taking to
strengthen and grow their own economies. And the President described
in some detail the jobs and growth plan, and listened to what the
other leaders were doing in terms of addressing structural reforms in
their economies, and made the point that it's in our country's
interest if Europe and Japan succeed. And one of the best things that
could happen to the U.S. economy is for Japan and Europe to grow their
economies and grow them faster.

Q: What happened with the AIDS initiative? I'm reading on the wires
that the Europeans agreed to match. Can you just give me the details
on that?

SENIOR ADMINISTRATION OFFICIAL: I don't know the details yet. We hope
they do. As you know, our initiative triples our commitment to
fighting the AIDS pandemic globally -- $15 billion [$15,000 million]
over five years. The President described the plan, noted that it
focused on the most afflicted countries, and urged, as he did in his
Krakow speech and in the Coast Guard speech that was pre-departure --
urged that the Europeans and other large donors make a similar
commitment.

Q: Back on the economy, two questions. One is, was there a discussion
of deficits and concerns about rising deficits? And secondly, was the
President, by citing the jobs and growth package, trying to encourage
Europe and Japan to cut their own tax burdens on their citizens?

SENIOR ADMINISTRATION OFFICIAL: The issue of deficits did come up, but
there was a general recognition that there was a case to be made for
short-term deficits in the context of an overall growth plan. And as I
say, the leaders were generally extremely supportive of the decisive
action that the United States has taken.

The second part of your question was about what again?

Q: The second part of the question was, was the President encouraging
Europe and Japan to cut taxes?

SENIOR ADMINISTRATION OFFICIAL: No, he didn't give them policy
prescriptions, specifically. He did urge them to take similar decisive
action. Their problems, as you know, are largely structural in nature,
and most of them talked about the kinds of challenges they face, from
pension reforms and labor market reforms, the challenge of an aging
population. And when the Chairman's summary comes out tomorrow, I
think you'll see a list of these various structural issues that
they're trying to take on.

But the President simply encouraged action; didn't prescribe it.

Q: Did the President tell the leaders, as reported by Prime Minister
Berlusconi, that the U.S. would not invade Iran?

SENIOR ADMINISTRATION OFFICIAL: I actually don't recall that
conversation per se. Iran was talked about in the context of
proliferation. He may have said, as I recall, something that that kind
of speculation was not warranted. But the focus of the discussion was
on the proliferation threat posed both by Iran and by North Korea,
specifically. And as I say, the statement on proliferation singled
both of them out, noting in particular that, with respect to Korea,
that they needed to take action to visibly, verifiably, and
irreversibly dismantle any nuclear weapons programs, and they also
called upon Iran for full compliance of its obligations under the
Nuclear Non-Proliferation Treaty. The President reiterated that, as
well, in the meeting, itself.

Q: One more on the dollar. The Canadians said that the President said
that the dollar's value is up to Alan Greenspan. Did the President say
anything about Greenspan, link the dollar to him in any way?

SENIOR ADMINISTRATION OFFICIAL: The President simply said that he --
he underscored that he had announced that he was going to reappoint --
decided to reappoint Alan Greenspan, and that that was an important
signal and did not link Greenspan to the dollar per se in any way.

The discussion, as I recall, had to do with -- in simply underscoring
that we have an independent central bank; they make their own decision
on interest rates. As you know, the European Central Bank, I believe,
meets shortly -- it's speculation about what they're going to do.

Q: A question about the global partnership. You described it's a
significant step forward -- a bunch of countries, including
Switzerland and Sweden, have joined up. I'm puzzled, what's
significant about that, and can you elaborate about what the main
things you decided on that, on the global partnership?

SENIOR ADMINISTRATION OFFICIAL: We think it's significant for a couple
of reasons. It is a global partnership. It was never intended to be G8
donors only; of course, that's the way it was launched in Kananaskis.
It was never intended to be a G8 donors only. Currently, it's focused
on Russia, though the former Soviet states are also a central
recipient of this kind of assistance. As you know, our own program
operates in countries beyond Russia.

And so the whole notion of making a true global partnership,
broadening it beyond the G8 to other donors was an objective we had
always had. We're thrilled that it occurred just in the space of 12
months here, and that a significant number of new donors come on
board. It adds momentum. That, together with some new projects that
people have committed to or are beginning carries the whole initiative
forward, broadens and deepens the participation. We do think that
that's a significant step.

MR. MCCORMACK: All right, this is Sean. Thank you very much for your
time and we appreciate you taking the time to do this. Bye.

SENIOR ADMINISTRATION OFFICIAL:  Thank you.