For Immediate Release
Office of the Press Secretary
December 20, 2006

Press Conference by the President
Indian Treaty Room

	President's Remarks

10:00 A.M. EST

THE PRESIDENT: Thank you all. Good morning. This week I went to the Pentagon for the swearing-in of our nation's new Secretary of Defense, Bob Gates. Secretary Gates is going to bring a fresh perspective to the Pentagon, and America is fortunate that he has agreed to serve our country once again. I'm looking forward to working with him.

Secretary Gates is going to be an important voice in the Iraq strategy review that's underway. As you know, I've been consulting closely with our commanders and the Joint Chiefs of Staff on the strategy in Iraq, and on the broader war on terror. One of my top priorities during this war is to ensure that our men and women wearing the uniform have everything they need to do their job.

This war on terror is the calling of a new generation; it is the calling of our generation. Success is essential to securing a future of peace for our children and grandchildren. And securing this peace for the future is going to require a sustained commitment from the American people and our military.

We have an obligation to ensure our military is capable of sustaining this war over the long haul, and in performing the many tasks that we ask of them. I'm inclined to believe that we need to increase in the permanent size of both the United States Army and the United States Marines. I've asked Secretary Gates to determine how such an increase could take place and report back to me as quickly as possible.

I know many members of Congress are interested in this issue, and I appreciate their input. As we develop the specifics of the proposals over the coming weeks, I will not only listen to their views, we will work with them to see that this becomes a reality.

Two thousand and six was a difficult year for our troops and the Iraqi people. We began the year with optimism after watching nearly 12 million Iraqis go to the polls to vote for a unity government and a free future. The enemies of liberty responded fiercely to this advance of freedom. They carried out a deliberate strategy to foment sectarian violence between Sunnis and Shia. And over the course of the year, they had success. Their success hurt our efforts to help the Iraqis rebuild their country. It set back reconciliation; it kept Iraq's unity government and our coalition from establishing security and stability throughout the country.

We enter this new year clear-eyed about the challenges in Iraq, and equally clear about our purpose. Our goal remains a free and democratic Iraq that can govern itself, sustain itself, and defend itself, and is an ally in this war on terror.

I'm not going to make predictions about what 2007 will look like in Iraq, except that it's going to require difficult choices and additional sacrifices, because the enemy is merciless and violent. I'm going to make you this promise: My administration will work with Republicans and Democrats to fashion a new way forward that can succeed in Iraq. We'll listen to ideas from every quarter; we'll change our strategy and tactics to meet the realities on the ground. We'll never lose sight that on the receiving end of the decisions I make is a private, a sergeant, a young lieutenant or a diplomat who risks his or her life to help the Iraqis realize a dream of a stable country that can defend, govern and sustain itself.

The advance of liberty has never been easy, and Iraq is proving how tough it can be. Yet, the safety and security of our citizens requires that we do not let up. We can be smarter about how we deploy our manpower and resources; we can ask more of our Iraqi partners, and we will -- one thing we cannot do is give up on the hundreds of millions of ordinary moms and dads across the Middle East who want the hope and opportunity for their children that the terrorists and extremists seek to deny them, and that's a peaceful existence.

As we work with Congress in the coming year to chart a new course in Iraq and strengthen our military to meet the challenges of the 21st century, we must also work together to achieve important goals for the American people here at home. This work begins with keeping our economy growing. As we approach the end of 2006, the American economy continues to post strong gains. The most recent jobs report shows that our economy created 132,000 more jobs in November alone, and we've now added more than 7 million new jobs since August of 2003.

The unemployment rate has remained low, at 4.5 percent. A recent report on retail sales shows a strong beginning to the holiday shopping season across the country -- and I encourage you all to go shopping more.

Next year marks a new start with a new Congress. In recent weeks I've had good meetings with the incoming leaders of Congress, including Speaker-elect Nancy Pelosi and Senate Majority Leader-elect Harry Reid. We agreed that we've got important business to do on behalf of the American people and that we've got to work together to achieve results. The American people expect us to be good stewards of their tax dollars here in Washington. So we must work together to reduce the number of earmarks inserted into large spending bills, and reform the earmark process to make it more transparent and more accountable.

The American people expect us to keep America competitive in the world. So we must work to ensure our citizens have the skills they need for the jobs of the future, and encourage American businesses to invest in technology and innovation. The American people expect us to reduce our dependence on foreign oil, and increase our use of alternative energy sources. So we must step up our research and investment in hydrogen fuel cells, hybrid plug-in and battery-powered cars, renewable fuels like ethanol and cellulosic ethanol and biodiesel, clean coal technology and clean sources of electricity like nuclear, solar and wind power.

Another area where we can work together is the minimum wage. I support the proposed $2.10 increase in the minimum wage over a two-year period. I believe we should do it in a way that does not punish the millions of small businesses that are creating most of the new jobs in our country. So I support pairing it with targeted tax and regulatory relief to help these small businesses stay competitive and to help keep our economy growing. I look forward to working with Republicans and Democrats to help both small business owners and workers when Congress convenes in January.

To achieve these and other key goals we need to put aside our partisan differences, and work constructively to address the vital issues confronting our nation. As the new Congress takes office, I don't expect Democratic leaders to compromise on their principles, and they don't expect me to compromise on mine. But the American people do expect us to compromise on legislation that will benefit the country. The message of the fall election was clear: Americans want us to work together to make progress for our country. And that's what we're going to do in the coming year.

And now I'll be glad to answer some questions. Terry.

Q Mr. President, less than two months ago at the end of one of the bloodiest months in the war, you said, "Absolutely we're winning." Yesterday you said, "We're not winning, we're not losing." Why did you drop your confident assertion about winning?

THE PRESIDENT: My comments -- the first comment was done in this spirit: I believe that we're going to win; I believe that -- and by the way, if I didn't think that, I wouldn't have our troops there. That's what you got to know. We're going to succeed.

My comments yesterday reflected the fact that we're not succeeding nearly as fast as I wanted when I said it at the time, and that conditions are tough in Iraq, particularly in Baghdad. And so we're conducting a review to make sure that our strategy helps us achieve that which I'm pretty confident we can do, and that is have a country which can govern itself, sustain itself and defend itself.

You know, I -- when I speak, like right now, for example -- I'm speaking to the American people, of course, and I want them to know that I know how tough it is, but I also want them to know that I'm going to work with the military and the political leaders to develop a plan that will help us achieve the objective. I also want our troops to understand that -- that we support them; that I believe that tough mission I've asked them to do is going to be accomplished, and that they're doing good work and necessary work.

I want the Iraqis to understand that we believe that if they stand up, step up and lead, and with our help we can accomplish the objective. And I want the enemy to understand that this is a tough task, but they can't run us out of the Middle East, that they can't intimidate America. They think they can. They think it's just a matter of time before America grows weary and leaves, abandons the people of Iraq, for example. And that's not going to happen.

What is going to happen is we're going to develop a strategy that helps the Iraqis achieve the objective that the 12 million people want them to achieve, which is a government that can -- a country that can sustain itself, govern itself, defend itself, a free country that will serve as an ally in this war against extremists and radicals.

Caren.

Q Thank you, Mr. President. If you conclude that a surge in troop levels in Iraq is needed, would you overrule your military commanders if they felt it was not a good idea?

THE PRESIDENT: That's a dangerous hypothetical question. I'm not condemning you, you're allowed to ask anything you want. Let me wait and gather all the recommendations from Bob Gates, from our military, from diplomats on the ground; I'm interested in the Iraqis' point of view; and then I'll report back to you as to whether or not I support a surge or not. Nice try.

Q Would you overrule your commanders --

THE PRESIDENT: The opinion of my commanders is very important. They are bright, capable, smart people whose opinion matters to me a lot.

Bret.

Q Thank you, Mr. President. You have reached out to both Sunni and Shia political leaders in recent weeks, and now there's word that the Grand Ayatollah Ali al Sistani is supporting a moderate coalition in Iraq. Has the U.S. reached out to him? How important is he in the equation moving forward? And what do you say to people who say more troops in Iraq would increase the sectarian split and not calm things down?

THE PRESIDENT: Well, I haven't made up my mind yet about more troops. I'm listening to our commanders; I'm listening to the Joint Chiefs, of course; I'm listening to people in and out of government; I'm listening to the folks on the Baker-Hamilton commission about coming up with a strategy that helps us achieve our objective. And so as I said to Caren -- probably a little more harshly than she would have liked -- hypothetical questions, I'm not going to answer them today. I'm not going to speculate out loud about what I'm going to tell the nation, when I'm prepared to do so, about the way forward.

I will tell you we're looking at all options. And one of those options, of course, is increasing more troops. But in order to do so, there must be a specific mission that can be accomplished with more troops. And that's precisely what our commanders have said, as well as people who know a lot about military operations. And I agree with them that there's got to be a specific mission that can be accomplished with the addition of more troops before I agree on that strategy.

Secondly, whatever we do is going to help the Iraqis step up. It's their responsibility to govern their country. It's their responsibility to do the hard work necessary to secure Baghdad. And we want to help them.

Thirdly, I appreciate the fact that the Prime Minister and members of the government are forming what you have called a moderate coalition, because it's becoming very apparent to the people of Iraq that there are extremists and radicals who are anxious to stop the advance of a free society. And therefore, a moderate coalition signals to the vast majority of the people of Iraq that we have a unity government, that we're willing to reconcile our differences and work together, and in so doing, will marginalize those who use violence to achieve political objectives.

And so we support the formation of the unity government and the moderate coalition. And it's important for the leader Sistani to understand that's our position. He is a -- he lives a secluded life, but he knows that we're interested in defeating extremism, and we're interested in helping advance a unity government.

Kelly.

Q Good morning, Mr. President. Your former Secretary of Defense, Donald Rumsfeld, advocated for a lighter, more agile military force. Have you now concluded that that approach was wrong?

THE PRESIDENT: No, I strongly support a lighter, agile army that can move quickly to meet the threats of the 21st century. I also supported his force posture review and recommendations to move forces out of previous bases that were there for the Soviet threat, for example, in Europe. So he's introduced some substantive changes to the Pentagon, and I support them strongly.

However, that doesn't necessarily preclude increasing end strength for the army and the Marines. And the reason why I'm inclined to believe this is a good idea is because I understand that we're going to be in a long struggle against radicals and extremists, and we must make sure that our military has the capability to stay in the fight for a long period of time. I'm not predicting any particular theater, but I am predicting that it's going to take a while for the ideology of liberty to finally triumph over the ideology of hate.

I know you know I feel this strongly, but I see this -- we're in the beginning of a conflict between competing ideologies -- a conflict that will determine whether or not your children can live in peace. A failure in the Middle East, for example, or failure in Iraq, or isolationism, will condemn a generation of young Americans to permanent threat from overseas. And therefore, we will succeed in Iraq. And therefore, we will help young democracies when we find them -- democracies like Lebanon; hopefully a Palestinian state living side-by-side in peace with Israel; the young democracy of Iraq.

It is in our interest that we combine security with a political process that frees people, that liberates people, that gives people a chance to determine their own futures. I believe most people in the Middle East want just that. They want to be in a position where they can chart their own futures, and it's in our interest that we help them do so.

Jim.

Q Thank you, Mr. President. In the latest CBS News poll, 50 percent of Americans say they favor a beginning of an end to U.S. military involvement in Iraq; 43 percent said, keep fighting, but change tactics. By this and many other measures, there is no clear mandate to continue being in Iraq in a military form. I guess my question is, are you still willing to follow a path that seems to be in opposition to the will of the American people?

THE PRESIDENT: I am willing to follow a path that leads to victory, and that's exactly why we're conducting the review we are. Victory in Iraq is achievable. It hasn't happened nearly as quickly as I hoped it would have. I know it's -- the fact that there is still unspeakable sectarian violence in Iraq, I know that's troubling to the American people. But I also don't believe most Americans want us just to get out now. A lot of Americans understand the consequences of retreat. Retreat would embolden radicals. It would hurt the credibility of the United States. Retreat from Iraq would dash the hopes of millions who want to be free. Retreat from Iraq would enable the extremists and radicals to more likely be able to have safe haven from which to plot and plan further attacks.

And so it's been a tough period for the American people. They want to see success. And our objective is to put a plan in place that achieves that success. I'm often asked about public opinion. Of course, I want public opinion to support the efforts. I understand that. But, Jim, I also understand the consequences of failure. And, therefore, I'm going to work with the Iraqis and our military and politicians from both political parties to achieve success.

I thought the election said they want to see more bipartisan cooperation; they want to see us working together to achieve common objectives. And I'm going to continue to reach out to Democrats to do just that.

Sheryl.

Q Thank you, Mr. President. Mr. President, Lyndon Johnson famously didn't sleep during the Vietnam War, questioning his own decisions. You have always seemed very confident of your decisions, but I can't help but wonder if this has been a time of painful realization for you as you, yourself, have acknowledged that some of the policies you hoped would succeed have not. And I wonder if you can talk to us about that. Has it been a painful time?

THE PRESIDENT: Yes, thanks. The most painful aspect of my presidency has been knowing that good men and women have died in combat. I read about it every night. My heart breaks for a mother or father, or husband or wife, or son and daughter; it just does. And so when you ask about pain, that's pain. I reach out to a lot of the families, I spend time with them. I am always inspired by their spirit. Most people have asked me to do one thing, and that is to make sure that their child didn't die in vain -- and I agree with that -- that the sacrifice has been worth it.

We'll accomplish our objective; we've got to constantly adjust our tactics to do so. We've got to insist that the Iraqis take more responsibility more quickly in order to do so.

But I -- look, my heart breaks for them, it just does, on a regular basis.

Q But beyond that, sir, do you question your own decisions?

THE PRESIDENT: No, I haven't questioned whether or not it was right to take Saddam Hussein out, nor have I questioned the necessity for the American people -- I mean, I've questioned it; I've come to the conclusion it's the right decision. But I also know it's the right decision for America to stay engaged, and to take the lead, and to deal with these radicals and extremists, and to help support young democracies. It's the calling of our time, Sheryl. And I firmly believe it is necessary.

And I believe the next President, whoever the person is, will have the same charge, the same obligations to deal with terrorists so they don't hurt us, and to help young democracies survive the threats of radicalism and extremism. It's in our nation's interest to do so. But the most painful aspect of the presidency is the fact that I know my decisions have caused young men and women to lose their lives.

McKinnon.

Q Thank you, Mr. President. You mentioned a need earlier to make sure that U.S. workers are skilled, that U.S. businesses keep investing in technology. You also mentioned that you want targeted tax and regulatory relief for small businesses in the coming year. Can you describe those ideas a little more? And also, can we really afford new tax breaks at this point, given the cost of the war on terror?

THE PRESIDENT: John, the first question all of us here in Washington ask is, how do we make sure this economy continues to grow. A vibrant economy is going to be necessary to fund not only war, but a lot of other aspects of our government. We have shown over the past six years that low taxes have helped this economy recover from some pretty significant shocks. After all, the unemployment rate is 4.5 percent and 7 million more Americans have been -- have found jobs since August of 2003. And we cut the deficit in half a couple of years in advance of what we thought would happen.

The question that Congress is going to have to face, and I'm going to have to continue to face is, how do we make sure we put policy in place to encourage economic growth in the short-term, and how do we keep America competitive in the long-term?

Part of the competitive initiative, which I have been working with Congress on, recognizes that education of young -- of the young is going to be crucial for remaining competitive. And that's why the reauthorization of No Child Left Behind is going to be an important part of the legislative agenda going forward in 2007.

I also spoke about energy in my opening remarks. In my judgment, we're going to have to get off oil as much as possible to remain a competitive economy. And I'm looking forward to working with Congress to do just that. I'm optimistic about some of the reports I've heard about new battery technologies that will be coming to the market that will enable people who -- people to drive the first 20 miles, for example, on electricity -- that will be the initial phase -- and then up to 40 miles on battery technologies. That will be positive, particularly if you live in a big city. A lot of people don't drive more than 20 miles, or 40 miles a day. And therefore, those urban dwellers who aren't driving that much won't be using any gasoline on a daily basis, and that will be helpful to the country.

I'm pleased with the fact that we've gone from about a billion gallons of ethanol to over 5 billion gallons of ethanol in a very quick period of time. It's mainly derived from corn here in the United States. But there's been great progress. And we need to continue to spend money on cellulosic ethanol. That means that new technologies that will enable us to use wood chips, for example, or switch grass as the fuel stocks for the development of new types of fuels that will enable American drivers to diversify away from gasoline.

I spent a lot of time talking about nuclear power, and I appreciate the Congress' support on the comprehensive energy bill that I signed. But nuclear power is going to be an essential source, in my judgement, of future electricity for the United States, and places like China and India. Nuclear power is renewable, and nuclear power does not emit one greenhouse gas. And it makes a lot of sense for us to share technologies that will enable people to feel confident that the nuclear power plants that are being built are safe, as well as technologies that will eventually come to fore that will enable us to reduce the wastes, the toxicity of the waste and the amount of the waste.

I'm going to continue to invest in clean coal technologies. We've got an abundance of coal here in America, and we need to be able to tell the American people we're going to be able to use that coal to generate electricity in environmentally friendly ways.

My only point to you is we've got a comprehensive plan to achieve the objective that most Americans support, which is less dependency upon oil.

I think it's going to be very important, John, to keep this economy growing -- short-term and long-term -- by promoting free trade. It's in our interest that nations treat our markets, our goods and services the way we treat theirs. And it's in our interest that administrations continue to promote more opening up markets. We've had a lot of discussions here in this administration on the Doha Round of WTO negotiations. And I'm very strongly in favor of seeing if we can't reach an accord with our trading partners and other countries around the world to promote -- to get this round completed so that free trade is universal in its application.

Free trade is going to be good for producers of U.S. product and services. But free trade is also going to be the most powerful engine for development around the world. It's going to help poor nations become wealthier nations. It's going to enable countries to be able to find markets for their goods and services so that they can better grow their economies and create prosperity for their people.

So we've got a robust agenda moving forward with the Congress, and I'm looking forward to working with them. And there are a lot of places where we can find common ground on these important issues.

Elaine.

Q Thank you, Mr. President. This week we learned that Scooter Libby --

THE PRESIDENT: A little louder, please. Excuse me -- getting old. (Laughter.)

Q I understand, Mr. President.

THE PRESIDENT: No, you don't understand. (Laughter.)

Q You're right, I don't.

This week, sir, we learned that Scooter Libby's defense team plans to call Vice President Cheney to testify in the ongoing CIA leak case. I wonder, sir, what is your reaction to that? Is that something you'll resist?

THE PRESIDENT: I read it in the newspaper today, and it's an interesting piece of news. And that's all I'm going to comment about an ongoing case. I thought it was interesting.

Ann.

Q Thank you, sir. Mary is having a baby. And you have said that you think Mary Cheney will be a loving soul to a child. Are there any changes in the law that you would support that would give same-sex couples greater access to things such as legal rights, hospital visits, insurance, that would make a difference, even though you've said it's your preference -- you believe that it's preferable to have one man-one woman --

THE PRESIDENT: I've always said that we ought to review law to make sure that people are treated fairly.

On Mary Cheney, this is a personal matter for the Vice President and his family. I strongly support their privacy on the issue, although there's nothing private when you happen to be the President or the Vice President -- I recognize that. And I know Mary, and I like her, and I know she's going to be a fine, loving mother.

Baker, I'm not going to call on you again. You got too much coverage yesterday, you know? (Laughter.) Created a sense of anxiety amongst -- no, no, you handled yourself well, though.

Don.

Q Thank you, Mr. President. A question about the Iraq Study Group Report. One of the things that it recommends is greater dialogue, direct talks with Syria and Iran. James Baker himself, Secretary of State under your father, says that it's a lot like it was during the Cold War when we talked to the Soviet Union. He says it's important to talk to your adversaries. Is he wrong?

THE PRESIDENT: Let me start with Iran. We made it perfectly clear to them what it takes to come to the table, and that is a suspension of their enrichment program. If they verifiably suspend -- that they've stopped enrichment, we will come to the table with our EU3 partners and Russia, and discuss a way forward for them. Don, it should be evident to the Iranians, if this is what they want to do.

I heard the Foreign Minister -- I read the Foreign Minister say the other day that, yes, we'll sit down with America, after they leave Iraq. If they want to sit down with us, for the good of the Iranian people, they ought to verifiably suspend their program. We've made that clear to them. It is obvious to them how to move forward.

The Iranian people can do better than becoming -- than be an isolated nation. This is a proud nation with a fantastic history and tradition. And yet they've got a leader who constantly sends messages to the world that Iran is out of step with the majority of thinkers, that Iran is willing to become isolated -- to the detriment of the people.

I mean, I was amazed that, once again, there was this conference about the Holocaust that heralded a really backward view of the history of the world. And all that said to me was, is that the leader in Iran is willing to say things that really hurts his country and further isolates the Iranian people.

We're working hard to get a Security Council resolution. I spoke to Secretary Rice about the Iranian Security Council resolution this morning. And the message will be that you -- you, Iran -- are further isolated from the world.

My message to the Iranian people is you can do better than to have somebody try to rewrite history. You can do better than somebody who hasn't strengthened your economy. And you can do better than having somebody who's trying to develop a nuclear weapon that the world believes you shouldn't have. There's a better way forward.

Syria -- the message is the same. We have met with Syria since I have been the President of the United States. We have talked to them about what is necessary for them to have a better relationship with the United States. And they're not unreasonable requests. We've suggested to them that they no longer allow Saddamists to send money and arms across their border into Iraq to fuel the violence -- some of the violence that we see. We've talked to them about -- they've got to leave the democrat Lebanon alone.

I might say -- let me step back for a second -- I'm very proud of Prime Minister Siniora. He's shown a lot of tenacity and toughness in the face of enormous pressure from Syria, as well as Hezbollah, which is funded by Iran.

But we made it clear to them, Don, on how to move forward. We've had visits with the Syrians in the past. Congressmen and senators visit Syria. What I would suggest, that if they're interested in better relations with the United States, that they take some concrete, positive steps that promote peace, as opposed to instability.

Knoller.

Q Thank you, sir. Mr. President, did you or your Chief of Staff order an investigation of the leak of the Hadley memo before your meeting with Prime Minister al Maliki? And if the leak wasn't authorized, do you suspect someone in your administration is trying to undermine your Iraq policy or sabotage your meeting with Prime Minister al Maliki a few weeks back?

THE PRESIDENT: I'm trying to think back if I ordered an investigation. I don't recall ordering an investigation. I do recall expressing some angst about -- about ongoing leaks. You all work hard to find information and, of course, put it out for public consumption, and I understand that. But I don't appreciate those who leak classified documents. And it's an ongoing problem here, it really is -- not just for this administration, but it will be for any administration that is trying to put policy in place that affects the future of the country.

And we've had a lot of leaks, Mark, as you know, some of them out of the -- I don't know where they're from, and therefore I'm not going to speculate. It turns out you never can find the leaker. It's an advantage you have in doing your job. We can moan about it, but it's hard to find those inside the government that are willing to give, in this case, Hadley's document to newspapers.

You know, there may be an ongoing investigation of this, I just don't know. If there is -- if I knew about it, it's not fresh in my mind. But I do think that at some point in time it would be helpful if we can find somebody inside our government who is leaking materials, clearly against the law, that they be held to account. Perhaps the best way to make sure people don't leak classified documents is that there be a consequence for doing so.

Jim.

Q Mr. President, if we could return to the reflexive vein we were in a little while ago --

THE PRESIDENT: The what? Excuse me.

Q Reflexive -- reflective.

THE PRESIDENT: Reflective stage.

Q Part of the process of looking at the way forward could reasonably include considering how we got to where we are. Has that been part of your process? And what lessons -- after five years now of war, what lessons will you take into the final two years of your presidency?

THE PRESIDENT: Look, absolutely, Jim, that it is important for us to be successful going forward is to analyze that which went wrong. And clearly one aspect of this war that has not gone right is the sectarian violence inside Baghdad -- a violent reaction by both Sunni and Shia to each other that has caused a lot of loss of life, as well as some movements in neighborhoods inside of Baghdad. It is a troubling, very troubling, aspect of trying to help this Iraqi government succeed. And therefore, a major consideration of our planners is how to deal with that, and how to help -- more importantly, how to help the Iraqis deal with sectarian violence.

There are a couple of theaters inside of Iraq, war theaters. One, of course, is Baghdad, itself, where the sectarian violence is brutal. And we've got to help them -- we've got to help the Maliki government stop it and crack it and prevent it from spreading, in order to be successful.

I fully understand -- let me finish. Secondly, is the battle against the Sunnis -- Sunni extremists -- some of them Saddamists, some of there are al Qaeda, but all of them aiming to try to drive the United States out of Iraq before the job is done. And we're making good progress against them. It's hard fighting, it's been hard work, but our special ops teams, along with Iraqis, are on the hunt and bringing people to justice.

There's issues in the south of Iraq, mainly Shia-on-Shia tensions. But primarily, the toughest fight for this new government is inside of Baghdad. Most of the deaths, most of the violence is within a 30-mile radius of Baghdad, as well as in Anbar Province. In other words, a lot of the country is moving along positively. But it's this part of the fight that is getting our attention. And, frankly, we have -- it has been that aspect of the battle, toward a government which can defend and govern itself and be an ally in the war on terror, where we have not made as much progress as we'd have hoped to have made.

Listen, last year started off as an exciting year with the 12 million voters. And the attack on the Samarra mosque was Zarqawi's successful attempt to foment this sectarian violence. And it's mean, it is deadly. And we've got to help the Iraqis deal with it.

Success in Iraq will be success -- there will be a combination of military success, political success and reconstruction. And they've got to go hand-in-hand. That's why I think it's important that the moderate coalition is standing up. In other words, it's the beginning of a political process that I hope will marginalize the radicals and extremists who are trying to stop the advance of a free Iraq. That's why the oil law is going to be a very important piece of legislation.

In other words, when this government begins to send messages that we will put law in place that help unify the country, it's going to make the security situation easier to deal with. On the other hand, without better, stronger security measures, it's going to be hard to get the political process to move forward. And so it's - we've got a parallel strategy.

So when you hear me talking about the military -- I know there's a lot of discussion about troops, and there should be. But we've got to keep in mind we've also got to make sure we have a parallel political process and a reconstruction process going together concurrently with a new military strategy.

I thought it was an interesting statement that Prime Minister Maliki made the other day about generals, former generals in the Saddam army, that they could come back in, or receive a pension. In other words, he's beginning to reach out in terms of a reconciliation plan that I think is going to be important.

I had interesting discussions the other day with provincial reconstruction team members in Iraq. These are really brave souls who work for the State Department that are in these different provinces helping these provincial governments rebuild and to see a political way forward. And one of the things that -- most of these people were in the Sunni territory, that I had talked to, and most of them were very anxious for me to help them and help the Iraqi government put reconciliation plans in place. There's a lot of people trying to make a choice as to whether or not they want to support a government, or whether or not their interest may lay in extremism. And they understand that a political process that is positive, that sends a signal, we want to be a unified country, will help these folks make a rational choice.

And so it's a multifaceted plan. And absolutely, we're looking at where things went wrong, where expectations were dashed, and where things hadn't gone the way we wanted them to have gone.

Let's see here -- Julie.

Q Thank you, Mr. President. You said this week that your microphone has never been louder on some of the key domestic priorities you've talked about, particularly Social Security and immigration. Your use of the presidential microphone hasn't yielded the results that you wanted. So I'm wondering -- the Democratic Congress, at this point, Republicans no longer controlling things on Capitol Hill -- why you think your microphone is any louder, and how you plan to use it differently to get the results that you're looking for?

THE PRESIDENT: Yes, microphone being loud means -- is that I'm able to help focus people's attentions on important issues. That's what I was referring to. In other words, the President is in a position to speak about priorities. Whether or not we can get those priorities done is going to take bipartisan cooperation, which I believe was one of the lessons of the campaigns.

I will tell you, I felt like we had a pretty successful couple of years when it comes to legislation. After all, we reformed Medicare; we put tax policy in place that encouraged economic growth and vitality; we passed trade initiatives; passed a comprehensive energy bill. I'm signing an important piece of legislation today that continues a comprehensive approach to energy exploration, plus extenders on R&D, for example, tax credits. It's been a pretty substantial legislative record if you carefully scrutinize it.

However, that doesn't mean necessarily that we are able to achieve the same kind of results without a different kind of approach. After all, you're right, the Democrats now control the House and the Senate. And, therefore, I will continue to work with their leadership -- and our own leaders, our own members -- to see if we can't find common ground on key issues like Social Security or immigration.

I strongly believe that we can, and must, get a comprehensive immigration plan on my desk this year. It's important for us because, in order to enforce our border, in order for those Border Patrol agents who we've increased down there and given them more equipment and better border security, they've got to have help and a plan that says, if you're coming into America to do a job, you can come legally for a temporary basis to do so.

I don't know if you've paid attention to the enforcement measures that were taken recently where in some of these packing plants they found people working that had been here illegally, but all of them had documents that said they were here legally -- they were using forged documents, which just reminded me that the system we have in place has caused people to rely upon smugglers and forgers in order to do work Americans aren't doing.

In other words, it is a system that is all aimed to bypass no matter what measures we take to protect this country. It is a system that, frankly, leads to inhumane treatment of people. And therefore, the best way to deal with an issue that Americans agree on -- that is, that we ought to enforce our borders in a humane way -- is we've got to have a comprehensive bill.

And I have made a proposal. I have spoken about this to the nation from the Oval Office. I continue to believe that the microphone is necessary to call people to action. And I want to work with both Republicans and Democrats to get a comprehensive bill to my desk. It's in our interest that we do this.

In terms of energy, there's another area where I know we can work together. There is a consensus that we need to move forward with continued research on alternative forms of energy. I've just described them in my opening comments, and be glad to go over them again if you'd like, because they're positive, it's a positive development. We're making progress. And there's more to be done.

So I'm looking forward to working with them. There's a lot of attitude here that says, well, you lost the Congress, therefore, you're not going to get anything done; quite the contrary. I have an interest to get things done. And the Democrat leaders have an interest to get something done to show that they're worthy of their leadership roles. And it is that common ground that I'm confident we can get -- we can make positive progress, without either of us compromising principle.

And I know they don't -- I know they're not going to change their principles, and I'm not going to change mine. But, nevertheless, that doesn't mean we can't find common ground to get good legislation done. That's what the American people want. The truth of the matter is, the American people are sick of the partisanship and name-calling.

I will do my part to elevate the tone. And I'm looking forward to working with them. It's going to be an interesting new challenge. I'm used to it, as Herman can testify. I was the governor of Texas with Democrat leadership in the House and the Senate, and we were able to get a lot of constructive things done for the state of Texas. And I believe it's going to be possible here -- to do so here in the country.

Michael.

Q Thank you, Mr. President. Merry Christmas.

THE PRESIDENT: Thank you.

Q Yes. I've just two questions related to the amazing fact that a quarter of your presidency lies ahead. First, I keep reading that you'll be remembered only for Iraq, and I wonder what other areas you believe you're building a record of transformation you hope will last the ages. And second, a follow-up on Julie's question, what is your plan for either changing your role, or keeping control of the agenda, at a time when Democrats have both houses on the Hill, and when the '08 candidates are doing their thing?

THE PRESIDENT: Well, one is to set priorities. That's what I've just done, setting a priority. My message is, we can work together, and here are some key areas where we've got to work together: reauthorization of No Child Left Behind, minimum wage. I hope we're able to work together on free trade agreements. We can work together on Social Security reform and Medicare reform, entitlement reform. We need to work together on energy, immigration, earmarks.

The leadership has expressed their disdain for earmarks; I support their disdain for earmarks. I don't like a process where it's not transparent, where people are able to slip this into a bill without any hearing or without any recognition of who put it in there and why they put it in there. It's just not good for the system, and it's not good for building confidence of the American people in our process or in the Congress.

The first part of the -- oh, last two years. I'm going to work hard, Michael. I'm going to sprint to the finish, and we can get a lot done. And you're talking about legacy. Here -- I know, look, everybody is trying to write the history of this administration even before it's over. I'm reading about George Washington still. My attitude is, if they're still analyzing number 1, 43 ought not to worry about it and just do what he thinks is right, and make the tough choices necessary.

We're in the beginning stages of an ideological struggle, Michael, that's going to last a while. And I want to make sure this country is engaged in a positive and constructive way to secure the future for our children. And it's going to be a tough battle.

I also believe the Medicare reform -- the first meaningful, significant health care reform that's been passed in a while -- is making a huge difference for our seniors. No Child Left Behind has been a significant education accomplishment, and we've got to reauthorize it. We have proven that you can keep taxes low, achieve other objectives, and cut the deficit. The entrepreneurial spirit is high in this country, and one way to keep it high is to keep -- let people keep more of their own money.

So there's been a lot of accomplishment. But the true history of any administration is not going to be written until long after the person is gone. It's just impossible for short-term history to accurately reflect what has taken place. Most historians, you know, probably had a political preference, and so their view isn't exactly objective -- most short-term historians. And it's going to take a while for people to analyze mine or any other of my predecessors until down the road when they're able to take -- watch the long march of history and determine whether or not the decisions made during the eight years I was President have affected history in a positive way.

I wish you all a happy holiday. Thank you for your attendance. Have fun, enjoy yourself. For those lucky enough to go to Crawford, perhaps I'll see you down there.

Thank you.

END 10:52 A.M. EST