UNEMPLOYMENT INSURANCE WEEKLY CLAIMS REPORT FOR WEEK ENDING OCTOBER 12, 2013

FROM:  U.S. DEPARTMENT OF LABOR

SEASONALLY ADJUSTED DATA

In the week ending October 12, the advance figure for seasonally adjusted initial claims was 358,000, a decrease of 15,000 from the previous week's revised figure of 373,000. The 4-week moving average was 336,500, an increase of 11,750 from the previous week's revised average of 324,750.

The advance seasonally adjusted insured unemployment rate was 2.2 percent for the week ending October 5, unchanged from the prior week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending October 5 was 2,859,000, a decrease of 43,000 from the preceding week's revised level of 2,902,000. The 4-week moving average was 2,875,750, an increase of 17,750 from the preceding week's revised average of 2,858,000.

UNADJUSTED DATA

The advance number of actual initial claims under state programs, unadjusted, totaled 357,041 in the week ending October 12, an increase of 20,902 from the previous week. There were 362,730 initial claims in the comparable week in 2012.

The advance unadjusted insured unemployment rate was 1.9 percent during the week ending October 5, unchanged from the prior week. The advance unadjusted number for persons claiming UI benefits in state programs totaled 2,418,329, a decrease of 56,979 from the preceding week. A year earlier, the rate was 2.2 percent and the volume was 2,753,759.

The total number of people claiming benefits in all programs for the week ending September 28 was 3,928,697, a decrease of 82,725 from the previous week. There were 5,001,985 persons claiming benefits in all programs in the comparable week in 2012.

No state was triggered "on" the Extended Benefits program during the week ending September 28.

As a result of the lapse in federal appropriations, initial claims for UI benefits filed by former Federal civilian employees (UCFE) totaled 70,068 in the week ending October 5, an increase of 68,677 from the prior week. The states with the highest number of UCFE claims were Maryland (17,368), Texas (7,191), Pennsylvania (4,416), Utah (3,978) and Washington (3,380). There were 3,382 initial claims filed by newly discharged veterans, an increase of 1,285 from the preceding week.

There were 19,586 former Federal civilian employees claiming UI benefits for the week ending September 28, a decrease of 334 from the previous week. Newly discharged veterans claiming benefits totaled 34,934, an increase of 3,293 from the prior week.

States reported 1,379,118 persons claiming Emergency Unemployment Compensation (EUC) benefits for the week ending September 28, a decrease of 46,366 from the prior week. There were 2,098,793 persons claiming EUC in the comparable week in 2012. EUC weekly claims include first, second, third, and fourth tier activity.

The highest insured unemployment rates in the week ending October 5 were in Puerto Rico (3.9), Alaska (3.5), Virgin Islands (3.4), New Jersey (3.0), California (2.9), Connecticut (2.7), Pennsylvania (2.6), Illinois (2.3), Nevada (2.3), New York (2.3), and Oregon (2.3).

The largest increases in initial claims for the week ending October 5 were in California (+33,654), Maryland (+4,609), Ohio (+4,122), Michigan (+4,066), and Virginia (+3,927), while the largest decreases were in Oregon (-149), Puerto Rico (-77), Missouri (-50) and Nebraska (-26).

UNEMPLOYMENT INSURANCE WEEKLY CLAIMS REPORT FOR WEEK ENDING OCTOBER 5, 2013

FROM:  U.S. DEPARTMENT OF LABOR
          SEASONALLY ADJUSTED DATA

In the week ending October 5, the advance figure for seasonally adjusted initial claims was 374,000, an increase of 66,000 from the previous week's unrevised figure of 308,000. The 4-week moving average was 325,000, an increase of 20,000 from the previous week's unrevised average of 305,000.
The advance seasonally adjusted insured unemployment rate was 2.2 percent for the week ending September 28, unchanged from the prior week's revised rate. The advance number for seasonally adjusted insured unemployment during the week ending September 28 was 2,905,000, a decrease of 16,000 from the preceding week's revised level of 2,921,000. The 4-week moving average was 2,858,750, an increase of 22,500 from the preceding week's revised average of 2,836,250.

UNADJUSTED DATA

The advance number of actual initial claims under state programs, unadjusted, totaled 336,849 in the week ending October 5, an increase of 84,616 from the previous week. There were 329,919 initial claims in the comparable week in 2012.

The advance unadjusted insured unemployment rate was 1.9 percent during the week ending September 28, unchanged from the prior week. The advance unadjusted number for persons claiming UI benefits in state programs totaled 2,478,333, a decrease of 36,220 from the preceding week. A year earlier, the rate was 2.2 percent and the volume was 2,785,230.

The total number of people claiming benefits in all programs for the week ending September 21 was 4,028,411, an increase of 25,956 from the previous week. There were 5,044,649 persons claiming benefits in all programs in the comparable week in 2012.

No state was triggered "on" the Extended Benefits program during the week ending September 21.

Initial claims for UI benefits filed by former Federal civilian employees totaled 1,391 in the week ending September 28, an increase of 359 from the prior week. There were 2,098 initial claims filed by newly discharged veterans, a decrease of 52 from the preceding week.

There were 19,918 former Federal civilian employees claiming UI benefits for the week ending September 21, a decrease of 81 from the previous week. Newly discharged veterans claiming benefits totaled 31,643, a decrease of 62 from the prior week.

States reported 1,442,484 persons claiming Emergency Unemployment Compensation (EUC) benefits for the week ending September 21, a decrease of 27,543 from the prior week. There were 2,106,072 persons claiming EUC in the comparable week in 2012. EUC weekly claims include first, second, third, and fourth tier activity.

The highest insured unemployment rates in the week ending September 28 were in Puerto Rico (4.0), Alaska (3.4), New Jersey (3.1), Virgin Islands (3.1), California (3.0), Connecticut (2.7), Pennsylvania (2.6), Illinois (2.4), Nevada (2.4), District of Columbia (2.3), and New York (2.3).

The largest increases in initial claims for the week ending September 28 were in Puerto Rico (+1,105), Oregon (+1,104), California (+1,045), Pennsylvania (+736), and Missouri (+561), while the largest decreases were in Michigan (-2,061), New York (-1,694), Florida (-1,349), Texas (-1,255), and labama (-1,008).

MILITARY RECRUITING DURING THE SHUTDOWN

FROM:  U.S. DEFENSE DEPARTMENT 
Relationships Sustain Recruiting Through Shutdown
By Donna Miles
American Forces Press Service

WASHINGTON, Oct. 16, 2013 - During the first week of the partial government shutdown, recruiters at the Jacksonville Recruiting Battalion in Florida enlisted 88 new soldiers onto active duty and six others into the Army Reserve. The Air Force shipped 856 new airmen off to basic military training. The Navy enlisted 242 future sailors into the delayed entry program.

As of yesterday, the Marine Corps had already contracted with 2,732 new members – almost 97 percent of its goal for the entire month.

Military recruiters report that despite a long list of potential detractors – force reductions, budget cuts, sequestration and now, a partial government shutdown – the close community ties they have built have enabled recruiting to continue relatively unaffected.

As the Defense Department began identifying what operations could be curtailed during the shutdown, its recruiting operations remained almost sacrosanct.

That's because the effort to recruit the best and brightest into the military can't take a proverbial "time out," even in the face of government furloughs, several recruiters explained during interviews with American Forces Press Service.

Falling short of recruiting goals for just one month simply isn't an option because it can spill over into an entire recruiting year, they said. That can leave vacancies within designated training cycles and ultimately, manpower and capability gaps within the ranks.

"Simply put, the success of today's recruiting efforts will have a direct impact on the future force and fleet," said Navy Cdr. Wendy Snyder, public affairs officer for Navy Recruiting Command.

Regardless of how the military is sized in the future, every service branch needs to continue attracting new, high-quality members to remain strong and capable, she said. "The individuals we recruit today are tomorrow's leaders, so the mission of recruiting is paramount to our fleet readiness."

Air Force Commander Master Chief William Cavanaugh , the senior non-commissioned officer for Air Force Recruiting Service, called new recruits vital to ensuring the U.S. military remains the world's best.

"You can't sustain greatness without innovation, and innovation is nurtured by bringing new members onto your team, members from diverse backgrounds with different thought processes and experiences," he said.

That makes the recruiting mission important, even during a period of downsizing that typically follows the end of a conflict, said Army Col. Fred Johnson, recruiting operations director for Army Recruiting Command.

Regardless of how the military ultimately is sized, "we have to recruit and build the experience base with soldiers who will eventually lead our Army in the future," he said. "Our ranks must remain filled with qualified men and women with leadership skills, values and competence to face future challenges."

Similarly with the Marine Corps, which despite drawing down its end strength, needs to maintain a strong recruiting effort because 67 percent of the Corps consists of first-termers, reported Marine Capt. James Stanley, operations officer for Martine Corps Recruiting Command's plans and research section.

Falling short of recruiting goals in terms of quantity or quality could have a negative impact on the Marines' ability to fulfill combatant commanders' requirements, he said. But after the Corps exceeded its fiscal 2013 recruiting mission, Stanley said he is optimistic that it "is well positioned" to do so again this year.

Despite broad recognition of the importance of recruiting, some recruiters admit that the current impasse in Washington has sent the public a mixed message.

"When you look at the government shutdown and the different things that are happening in Washington, D.C., the immediate effect on recruiting opportunities is obviously a concern," said Army Lt. Col. Stephen Grabski, commander of the Jacksonville Recruiting Battalion that was among the Army's most successful in 2013. "We get a lot of questions from parents and the high school students that are really our primary customers about the impact of all this."

Budget constraints have added another wrinkle by forcing the services to cut many of their more visible outreach activities. "You are not going to see any large-scale photos of massive events happening anywhere in recruiting, but that is not the foundation of success," said Grabski.

"Our success is really based on the relationships that we have with the community and the interaction and support that we have with the members of the community," he said. "And because it is a relationship-based success, the shutdown and the national discussions are not having a tremendous effect."

Recruiters across the board say they are weathering what could be a very challenging recruiting environment thanks to close relationships they have built not just with potential applicants, but also their parents, teachers, coaches and community leaders who influence their decisions to join the military.

It's an effort that has continued throughout the shutdown – through social media and face-to-face interaction in local communities.

Air Force recruiters, for example, are frequently seen in their communities taking part in Habitat for Humanity projects and other volunteer programs, Cavanaugh reported.

"Our basic philosophical approach to recruiting is that if you meld into and become part of the community and show your involvement in that community, you will become an accepted member of that community and the folks in that community are going to see what you offer their children as a viable option," he said.

Similarly, the Army regularly sends recruiters to help fill needs community leaders identify, whether it's a conditioning coach for a local athletic team or a teacher's assistant in a classroom.

"I have combat medics stepping in and assisting with biology labs," Grabski said. "I have mechanics who have time in Baghdad fixing tanks, now sitting in a high school automotive classes."

Snyder called regular interactions between Navy recruiters and community and civic leaders and educators vital to the strong relationships that support recruiting efforts. "The daily engagements and conversations our recruiters have with young adults and influencers are critical to our mission of finding high-quality young men and women to join our Navy," she said.

She expressed concern that although the partial shutdown hasn't yet hurt recruiting, a sustained one that limits recruiters' long-term engagement opportunities could.

Regular interactions give recruiters an opportunity to demonstrate to potential applicants and their influencers alike what the military represents, and share insight into doors that military service can open up, the recruiters said.

"We are looking for a community's best and brightest so we can put forth the best Air Force we can for our nation," Cavenaugh said. "These relationships allow us to share the Air Force story on a personal level [and] sustain the public interest in serving."

"The impact our recruiters have on perceptions about our Navy is significant, which impacts an individual's decision to join," agreed Snyder. "The conversation the recruiter has may be the very first interaction that individual has ever had with a Navy sailor, so our daily conversations across the country matter."

Grabski said there is no better recruiting tool than proud servicemembers who exemplify the military's best.

"If I can put them into a high school setting and get them to interact with high school students, their leadership shines through in amazing ways," he said. "Students see what true leaders look like and they tend to gravitate toward that and follow it.

"And that is the foundation of recruiting success," Grabski said. "It is a 17-year-old high-school student looking at somebody with chevrons on their uniform, saying, 'You are showing me some great opportunities.'"

SECRETARY OF DEFENSE HAGEL TOUTS VALUE OF WORKFORCE AFTER SHUTDOWN

FROM:  U.S. DEFENSE DEPARTMENT
Hagel Stresses Workforce's Value After 'Manufactured Crisis'
American Forces Press Service

WASHINGTON, Oct. 17, 2013 - Defense Secretary Chuck Hagel issued a message to the Defense Department's workforce today, welcoming back employees furloughed by the 16-day government shutdown and emphasizing their value to the nation.

Here is the text of the secretary's message:

Today the Department of Defense is resuming normal operations across the world, now that Congress has finally restored funding for DoD and the rest of the federal government. This manufactured crisis was an unwelcome and unnecessary distraction from our critical work of keeping the country safe.

I know that each of your lives has been disrupted and affected in different ways. I regret the impact that this shutdown had on so many of our civilian personnel, particularly those who I was previously unable to recall from emergency furlough.

Starting today, we will be welcoming all of our civilians back to their normal duties. To those returning from furlough: know that the work you perform is incredibly valued by your military teammates and by me. I appreciate your professionalism and your patience during this difficult period of time, which came on top of last summer's sequestration-related furloughs. Your managers will have more information about this, but I can assure you that you will be paid in full for the time you were furloughed during the shutdown.

Now that this latest budget crisis has come to an end, we have an opportunity to return to focusing on the critical work of this department. Unfortunately, Congress did not end the budget uncertainty that has cast such a shadow of uncertainty over this department for much of the year. In the months ahead, they will have an opportunity to do so. My hope is that they will realize that these kinds of crises do great damage to our people, our national security, our economy, and America's standing in the world. Congress has a responsibility to govern, and it must fulfill those basic responsibilities in order to keep our country strong.

CFTC SETTLES CHARGES AGAINST JPMORGAN CHASE BANK, N.S., IN MARKET MANIPULATION CASE

FROM:  U.S. COMMODITY FUTURES TRADING COMMISSION 

CFTC Files and Settles Charges Against JPMorgan Chase Bank, N.A., for Violating Prohibition on Manipulative Conduct In Connection with “London Whale” Swaps Trades

JPMorgan Admits to Reckless Conduct in First Case Charging Violation of Dodd Frank’s Prohibition Against Manipulative Conduct and is Ordered to Pay a $100 Million Civil Monetary Penalty

Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today issued an Order against JPMorgan Chase Bank, N.A. (JPMorgan or Bank), bringing and settling charges for employing a manipulative device in connection with the Bank’s trading of certain credit default swaps (CDS), in violation of the new Dodd-Frank prohibition against manipulative conduct. As set forth in the CFTC’s Order, by selling a staggering volume of these swaps in a concentrated period, the Bank, acting through its traders, recklessly disregarded the fundamental precept on which market participants rely, that prices are established based on legitimate forces of supply and demand. As a result, after a thorough 17-month investigation, the Commission has found the Bank liable for violating Section 6(c)(1) of the Commodity Exchange Act (the “Act”), 7 U.S.C. §9 (2012), as amended by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank”), and Commission Regulation 180.1, 17 C.F.R. §180.1 (2012).

JPMorgan, which admits the specified factual findings in the Order including that its traders acted recklessly, is directed, among other things, to pay a $100 million civil monetary penalty.

“In Dodd-Frank, Congress provided a powerful new tool enabling the CFTC for the first time to prohibit reckless manipulative conduct,” said David Meister, the CFTC’s Director of Enforcement. “As this case demonstrates, the Commission is now better armed than ever to protect the market from traders, like those here, who try to ‘defend’ their position by dumping a gargantuan, record-setting, volume of swaps virtually all at once, recklessly ignoring the obvious dangers to legitimate pricing forces.”

Highlights of the CFTC Order

The CDS market comprises globally traded credit derivatives used to speculate on and hedge against credit defaults. Trillions of dollars (notional) of CDS instruments and baskets of CDS called credit default indices, some known as CDX, are used to transfer risk of defaults by companies in the United States and around the world. As such, the CDS market is an important aspect of the global economy.

From approximately 2007 through 2011, JPMorgan’s Chief Investment Office (“CIO”), operating through a trading desk in the Bank’s London branch, traded and held various credit default indices, including CDX, in a Synthetic Credit Portfolio (“SCP”). Each day the SCP traders marked their positions to market, assigning a value to the positions using market prices and other factors. That value was used to calculate the CIO’s profits and losses. At the end of each month an “independent” group at JPMorgan tested the validity of the traders’ month-end marks.

As of the end of 2011, the portfolio held $51 billion net notional of these credit instruments, the outsized amount spurring press reports referring to one CIO trader as the “London Whale.” Although previously quite profitable, the portfolio had taken a serious turn for the worse at least by late January 2012, with year-to-date mark-to-market losses of $100 million. In February 2012, daily losses were large and growing.

The violation charged in the CFTC’s Order concerns the Bank’s trading of one particular credit default index -- “CDX NA.IG9 10 year index” (“IG9 10Y”). As the end of February 2012 approached, the SCP’s net short position in the IG9 10Y grew to a mammoth $65 billion, which meant that relatively small favorable or adverse movements in market prices produced significant mark-to-market profits or losses for the CIO. Because the SCP was short IG9 10Y, the mark-to-market value of the position increased as the market price decreased.

On February 29, just ahead of the month-end testing of their marks, the traders believed the portfolio’s situation was grave. That day, desperate to avoid further losses, the traders developed a resolve, as they put it, to “defend the position.” Recognizing that the sheer size of their position in IG9 10Y had the potential to affect or influence the market, the traders recklessly sold massive amounts of protection on the IG9 10Y. They were short protection and they sold more protection.

Specifically, with the portfolio standing to benefit as the IG9 10Y market price dropped, on February 29 the CIO sold on net more than $7 billion of IG9 10Y, a staggering volume -- far and away the largest amount the CIO ever traded in one day -- $4.6 billion of which was sold during a three-hour period as the day drew to a close.

The Order provides comparative measures that demonstrate just how large and concentrated these February 29 sales of IG9 10Y were. For example, these sales alone accounted for more than 90% of the day’s net volume traded by the entire market, were 15% of the month’s net volume traded by the entire market, and were nearly 11 times the SCP’s average daily volume in February. The February 29 trading followed more than $3 billion in sales of the IG9 10Y during the prior two days. The net volume the CIO sold February 27-29 amounted to roughly one-third of the total volume traded for the entire month of February by all other market participants.

During this same period at month-end, the IG9 10Y market price dropped substantially. While the CIO was selling at generally declining prices, the value of the short position that the CIO held in the SCP benefited on a mark-to-market basis from the declining market prices.

As set forth in the Order, the trading strategy to “defend the position” -- selling $7.17 billion of the IG9 10Y on February 29 in a concentrated period -- constituted a manipulative device employed by the traders in reckless disregard of the possible consequences of their conduct, including obvious dangers to legitimate market forces. That conduct therefore violated section 6(c)(1) of the Act and Rule 180.1.

In addition to paying a $100 million penalty, JPMorgan must continue to implement written enhancements to its supervision and control system in connection with swaps trading activity, including trading and risk management controls reasonably designed to prevent and promptly detect mis-marking of its books, enhanced communications among risk, control and supervisory functions, and the development of additional surveillance tools to assist supervisors with monitoring trading activity in connection with swaps.

In addition to finding the violation, the Order describes aspects of the CFTC’s new business conduct rules applicable to swap dealers. JPMorgan registered with the Commission as a swap dealer as of December 31, 2012, and at that time became subject to the Commission’s new swap dealer regime, including rules that impose supervision and control obligations. Although these rules did not apply to the Bank at the time of the events in question, the Order explains how some of these new rules would have covered the matters set forth in the Order, and concludes that had the regulations been in place, much of the offending conduct at issue (and the significant losses it caused) may well have been detected and remedied internally much more quickly, thereby potentially reducing losses.

The CFTC acknowledges the valuable assistance of the United Kingdom’s Financial Conduct Authority, as well as that of the U.S. Securities and Exchange Commission and the United States Attorney’s Office for the Southern District of New York.

The CFTC also acknowledges JPMorgan’s cooperation with the Division of Enforcement’s investigation.

CFTC Division of Enforcement staff responsible for this action are Saadeh Al-Jurf, Allison Baker Shealy, Traci Rodriguez, Daniel Ullman, Joan Manley, and Paul G. Hayeck.

PRESIDENT OBAMA PRESENTS MEDAL OF HONOR TO FORMER ARMY CAPTAIN

President Barack Obama presents the Medal of Honor to former Army Capt. William D. Swenson during an Oct. 15, 2013, White House ceremony. Swenson was honored for his valor during a Sept. 8, 2009, battle in Afghanistan's Kunar province. U.S. Army photo by Lisa Ferdinando 

FROM:  U.S. DEFENSE DEPARTMENT 
Former Army Captain Receives Medal of Honor at White House
By Lisa Ferdinando
Army News Service

WASHINGTON, Oct. 16, 2013 - President Barack Obama presented the Medal of Honor to former Army Capt. William D. Swenson in a White House ceremony yesterday, citing Swenson's heroism during a six-hour battle that followed a deadly Taliban ambush in Afghanistan four years ago.
Swenson is the first Army officer to receive the nation's highest military honor for actions in Iraq or Afghanistan.
Guests at the White House ceremony included other Medal of Honor recipients, soldiers and Marines who fought alongside Swenson, and the families of service members who died in the battle. Army Secretary John M. McHugh, Army Chief of Staff Gen. Ray Odierno and Army Undersecretary Joseph W. Westphal also attended.

Before draping the medal around Swenson's neck, Obama recounted Swenson's heroic actions in saving more than a dozen lives during the Sept. 8, 2009, Battle of Ganjgal in Afghanistan's Kunar province.

Swenson is the second service member to receive the Medal of Honor for that battle. Dakota Meyer, a Marine Corps corporal at the time, was honored two years ago.

The president said Swenson is a remarkable example to the nation of the professionalism and patriotism that everyone should strive for.

"Capt. Will Swenson was a leader on that September morning," Obama said. "But like all great leaders, he was also a servant -- to the men he commanded, to the more than a dozen Afghans and Americans whose lives he saved, to the families of those who gave their last full measure of devotion on that faraway field."

Swenson served with Combined Security Transition Command Afghanistan's Task Force Phoenix in support of 10th Mountain Division's 1st Battalion, 32nd Infantry Regiment, 3rd Brigade Combat Team, as an embedded advisor to the Afghan border police. He said the honor is for all who served that day and for the families of those who were killed in the battle.

"The value of an award is truly what we as a nation put into it, what we value it as," he told reporters after receiving the award. "This award is earned with a team -- a team of our finest Marines, Army, Air Force, Navy and our Afghan partners standing side by side. Now that team includes Gold Star families who lost their fathers, sons and husbands that day. This medal represents them -- it represents us."

Around sunrise that day four years ago, Obama said, a column of Afghan soldiers and their American advisors were winding their way up a narrow trail toward a village to meet with elders. "But just as the first soldier reaches the outskirts of the village, all hell breaks loose," he added.

The American forces and their Afghan partners were ambushed by more than 60 well-armed, well-positioned enemy fighters, the Medal of Honor citation said. Insurgents surrounded three Marines and a Navy corpsman, Obama said, and rocket-propelled grenades, mortar and machine-gun fire poured in from three sides.

"Will and the soldiers in the center of the column are pinned down," he said. Swenson called in air support, Obama said, but initial requests were denied because Swenson and his team were too close to the village.

After finding out his noncommissioned officer, Army Sgt. 1st Class Kenneth Westbrook, was injured, Swenson risked his life to aid him.

"Will breaks across 50 meters of open space, bullets biting all around," Obama said. "Lying on his back, he presses a bandage to Kenneth's wounds with one hand and calls for a medevac with the other, trying to keep his buddy calm."

Swenson continued to fight the enemy and risked his life getting Westbrook to the medevac, said Obama, noting that before the helicopter left, Swenson kissed Westbrook on the forehead in "a simple act of compassion and loyalty to a brother in arms."

Risking his own life again, Swenson then drove an unarmored vehicle straight into the kill zone to rescue injured Afghan forces, Obama said. He returned into the path of enemy fire again, when he and a Humvee crew recovered the four fallen service members.

"Will and the others carry them out, one by one," Obama said. "They bring their fallen brothers home."

Marine Corps Gunnery Sgt. Edwin Johnson, Marine Corps 1st Lt. Michael Johnson, Marine Corps Gunnery Sgt. Aaron Kenefick and Navy Petty Officer 3rd Class James Layton were killed, along with nine Afghan security force personnel.

Westbrook survived the battle, but died a month later from complications.

"To the families of those we've lost, we will never forget," said Obama, adding that the nation is grateful for those who served that day and all who continue to serve "with such incredible courage and professionalism."

SECRETARY OF DEFENSE HAGEL SAYS EFFECTS OF SHUTDOWN CONTINUE

FROM:  U.S. DEFENSE DEPARTMENT 
Shutdown Over, But Effects on DOD Continue, Hagel Says
By Jim Garamone
American Forces Press Service

WASHINGTON, Oct. 17, 2013 - The government shutdown is over, but it will take a while for the effects to fade, Defense Secretary Chuck Hagel said here today.
At the shutdown's height, more than 400,000 Defense Department civilian employees were furloughed because of the lapse of appropriations for the new fiscal year, which began Oct. 1. The Pay Our Military Act allowed the department to bring most back to work Oct. 7. The rest -- about 5,000 -- came back to work today.
"While all of us across the department welcome the fact that the shutdown is now behind us, I know that its impact will continue to be felt by all of our people," Hagel said at a Pentagon news conference. "All of them, in different ways, had their lives affected and disrupted during this period of tremendous uncertainty."

All DOD leaders will work to repair the damage from the shutdown, the secretary vowed.

"I want all of our civilian personnel to know that the work they do is critically important to this department and this country," Hagel said. "It matters to this department, and it matters for the country. The military simply cannot succeed without our civilian employees, and the president and I appreciate their professionalism and their patience throughout this very trying period."

While the department must refocus on critical work, Hagel noted, Congress did not remove the shadow of uncertainty cast over DOD.

"DOD is now operating on a short-term continuing resolution, which limits our ability to start new programs, and the damaging cuts of sequestration remain the law of the land," the secretary said.

The continuing resolution passed last night gives Congress the chance to craft a balanced long-term spending bill, Hagel said.

"If this fiscal uncertainty continues, it will have an impact on our economy, our national security, and America's standing in the world," he added. "If the sequester level continues, there will also be consequences." The cuts could be devastating to training and to maintaining and equipping the force, he said.

"DOD has a responsibility to give America's elected leaders and the American people a clear-eyed assessment of what our military can and cannot do after years of sequester-level cuts," Hagel said. "In the months ahead, we will continue to provide our best and most honest assessment as Congress works to establish the nation's long-term spending priorities."

The secretary said he is concerned about civilian morale.

"I don't think anyone questions that the uncertainty that shutting down the government and closing down people's jobs has brought a great amount of not only disruption to our government, to our country, but to their lives, to the civilian personnel whose lives have been disrupted by this particular shutdown," he said.

Combined with no authorization, no appropriation, continuing sequestration and the uncertainty of planning, this creates a perfect stew for bad morale, Hagel said.

"People have to have some confidence that they have a job that they can rely on," he explained. "I know there are no guarantees in life, but we can't continue to do this to our people -- having them live under this cloud of uncertainty."

If this continues, he added, DOD will not be able to recruit good people.

The government shutdown and the nation's debt limit problem are making American allies nervous as well, the secretary said.

"Our allies are asking questions: Can we rely on our partnership with America? Will America fulfill its commitments and its promises?" he said. "These are huge issues for all of us, and they do impact our national security and our relationships and our standing in the world."

FDA INVESTIGATES LEUKEMIA DRUG AFTER REPORTS OF BLOOD CLOTS

FROM:  U.S. FOOD AND DRUG ADMINISTRATION

FDA Drug Safety Communication: FDA investigating leukemia drug Iclusig (ponatinib) after increased reports of serious blood clots in arteries and veins
Safety Announcement

[10-11-2013]  The U.S. Food and Drug Administration (FDA) is investigating an increasing frequency of reports of serious and life-threatening blood clots and severe narrowing of blood vessels (arteries and veins) of patients taking the leukemia chemotherapy drug Iclusig (ponatinib).

Health care professionals should consider for each patient, whether the benefits of Iclusig treatment are likely to exceed the risks of treatment.

Patients taking Iclusig should seek immediate medical attention if they experience symptoms suggesting a heart attack such as chest pain or pressure, pain in their arms, back, neck or jaw, or shortness of breath; or symptoms of a stroke such as numbness or weakness on one side of the body, trouble talking, severe headache, or dizziness.

Iclusig is a prescription medicine used to treat adults diagnosed with chronic phase, accelerated phase, or blast phase chronic myeloid leukemia (CML) or Philadelphia chromosome-positive (Ph+) acute lymphoblastic leukemia (ALL), who are no longer benefiting from previous treatment or who did not tolerate other treatment.

At the time of Iclusig’s approval in December 2012, the drug label contained information about the risks of blood clots in the Boxed Warning and Warnings and Precautions sections.  In clinical trials conducted before approval, serious arterial blood clots occurred in 8 percent of Iclusig-treated patients, and blood clots in the veins occurred in 3 percent of Iclusig-treated patients.  In the most recent clinical trial data submitted by the manufacturer to FDA, at least 20 percent of all participants treated with Iclusig have developed blood clots or narrowing of blood vessels.

Data from clinical trials and postmarket adverse event reports show that serious adverse events have occurred in patients treated with Iclusig, including heart attacks resulting in death, worsening coronary artery disease, stroke, narrowing of large arteries of the brain, severe narrowing of blood vessels in the extremities, and the need for urgent surgical procedures to restore blood flow.  Other problems occurring with the drug’s use include congestive heart failure (CHF) and loss of blood flow to extremities resulting in tissue death requiring amputation.  Newly identified serious adverse reactions have also been reported involving the eyes, including decreased vision and clots in blood vessels of the eye. These adverse events were seen in all age groups treated and in those with and without cardiovascular risk factors.

FDA is providing this information to patients and health care professionals while it continues its investigation. We are actively working to further evaluate these adverse events and will notify the public when more information is available.

We urge health care professionals and patients to report side effects involving Iclusig to the FDA MedWatch program, using the information in the “Contact FDA” box at the bottom of this page.

PRESS BRIEFING FROM PRESS SECRETARY JAY CARNEY

FROM:  THE WHITE HOUSE 
Press Briefing by Press Secretary Jay Carney, 10/15/13

James S. Brady Press Briefing Room

12:44 P.M. EDT

MR. CARNEY:  Good afternoon, ladies and gentlemen.  Thanks for being here.  Before I take your questions, I just wanted to note that earlier today the President was briefed by senior staff on the effects of the lapse in appropriations -- the so-called shutdown.  And among the items that he was briefed on was the fact that small businesses are feeling the impact of shutdown as key federal efforts that support small business have been halted.

Due to the shutdown -- as you know, now in its 15th day -- the SBA cannot approve new guarantees of loans provided by banks to small businesses.  In a typical month, the Small Business Administration approves loans to more than 4,000 small businesses, and halting these loans represents over $1 billion in lost loan assistance to small businesses, thereby jeopardizing thousands of jobs -- and, again, another consequence of the wholly unnecessary, completely manufactured crisis that is doing harm to our economy, harm to our small businesses, and was brought about by one faction of one party in one house in one branch of government making ideological demands and thereby shutting down the government.

With that, I take your questions.  Julie.

Q    Thanks, Jay.  I want to just get a sense of the state of play at this point.  Is it the White House’s understanding that there is a deal in the Senate that's been finalized between Harry Reid and Mitch McConnell that would lift the debt ceiling and reopen the government?

MR. CARNEY:  The President is pleased with the progress that we've seen in the Senate.  It is important to note that the process that's been undertaken in the Senate is bipartisan, that Senators Reid and McConnell have been engaging one another, Democrats and Republicans have been engaging on this issue.  And it’s all built around the fundamental premise that we should not have shut down the government, that we should reopen the government, and that we must ensure that the United States pays its bills on time, as it always had, and we should do -- the Congress should take those actions in a way that does not have partisan strings attached and that ensures the kind of stability for our economy and for our middle class that they need.

So we're pleased with the progress.  I would refer you to the Senate leaders for the status of those discussions.  But we certainly believe that there’s a potential there for a resolution to this unnecessary, manufactured crisis that can allow us to get back to the important business of helping grow the economy and create jobs and taking action to improve the lives of middle-class Americans that elected officials were sent here to do.

Q    Is the White House confident that that resolution could pass both the Senate and the House ahead of the Thursday deadline for the debt ceiling?

MR. CARNEY:  For congressional timing and how --

Q    But you guys know the state of play.

MR. CARNEY:  There is no question that we are very close to a very important deadline and time is of the essence.  So I think that is why you see some very serious-minded efforts being undertaken in the Senate.  And we would hope that the House would also approach this important deadline with the same understanding of just how serious it is.

Q    And in 2011, the U.S. credit rating was downgraded just because the government got so close to a default.  Is the White House or Treasury hearing from any of the rating agencies now that we are, again, very close to that deadline without a resolution?

MR. CARNEY:  I would refer you to the Treasury Department for those kinds of conversations, if they’re taking place.  That wouldn't be something I would brief on from here.

We know from past experience, the difficult lessons learned from 2011, that the serious flirtation with default that House Republicans engaged in two years ago led to some pretty negative consequences for our economy, including, as you know, the United States being downgraded for the first time.

Q    But the President in his briefings that you say he’s getting every day, is he getting anything from any of these officials about how the rating agencies --

MR. CARNEY:  That would not be something that I would brief on from here because obviously issues that have to do with market sensitivities are not ones that I would address here.

Roberta.

Q    Last week, the President said in a worse-case scenario, there are things that he will do.  And what if Thursday comes and there’s no deal.  Have you -- has the White House started implementing any of those contingency plans already ahead of -- because we’re so close?

MR. CARNEY:  Well, I would not go further than what the President or the Treasury Secretary have said about that, and I would refer you to Treasury.  Treasury Secretary Jack Lew testified, as you know, last week where broadly this issue was discussed.

But we are obviously focused on working with members of Congress, leaders in Congress, on an effort to do what we’ve said was essential all along, which was open the government and make sure that the United States pays its bills by extending the debt ceiling, and doing that in a way that we don't simply put us on a trajectory to re-create this crisis again in a few weeks.

So we’re encouraged by the progress that we’ve seen in the Senate, but we’re far from a deal at this point and so we hope that progress continues.

Q    What is there about the Senate deal, though, that doesn't re-create the crisis in a few months down the road?  What is there in it that doesn't mean we’re going to be doing this all over again in --

MR. CARNEY:  Again, there’s not a bill for me to analyze for you right now.  What I would --

Q    Right, but the pending -- the shape of the pending --

MR. CARNEY:  I think that every participant in this exercise would, hopefully, understand that it should not be repeated -- not in a few weeks and not in a few months.  And when it comes to the fundamental responsibility of Congress to ensure that the United States does not default, not ever.  That’s certainly the President’s view.

That is why he has been so insistent that we cannot engage in a process here that then becomes normalized where a minority in Congress, a faction of one party in one house can threaten the full faith and credit of the United States if it does not get what it could not get through the normal legislative process or through elections.  So those are the stakes when it comes to the essential responsibility of Congress to ensure that the Department of Treasury can pay our bills.

Q    There do seem to be, though, some strings attached in the deal as it appears to be sort of coalescing or developing.  What does the White House make of those strings?

MR. CARNEY:  Again, I’m not going to analyze details of a bill that we haven’t seen yet and that has not emerged yet.

Brianna.

Q    Jay, some of the -- it seems like the key parts, at least, of the Senate bill -- the reinsurance, the income verification -- President Obama said, “Nobody gets to threaten the full faith and credit of the United States just to extract political concessions.”  But if you're open to that, as presumably the White House is because they're talking to Senate Democrats, isn’t that concessions?

MR. CARNEY:  Again, I think what we have seen --

Q    Isn't that setting the precedent that he said he won’t?

MR. CARNEY:  What we have seen in the process thus far that Senator Reid has engaged in is a proposal that would reopen the government and remove the threat of a first-ever U.S. default by raising the debt ceiling.  We don’t need any more self-inflicted wounds from Congress.  The economy is already paying a price, as outside analysts have noted.  There is already a cost to the economy and, therefore, to growth and jobs from this behavior.

And it’s important, as I think so many Americans believe, that it stop, that Congress simply fulfill its basic responsibilities to open the government, to fund it at, again, levels that were set by Republicans, so that we can get about the business of negotiating in good faith over longer-term budget proposals.  I'm not going to --

Q    But there are provisions on -- you are talking about the short-term increase in the debt ceiling and the CR.  If you’re not going to talk about the Obamacare provisions, which are also on the table -- I mean, you’re talking about the short-term debt ceiling and CR provisions.  I mean, even if these are sort of small-fry gives on Obamacare, doesn’t it violate the principle that the President set out there that he will not negotiate on Obamacare?

MR. CARNEY:  Again, until we have a proposal that has emerged from these negotiations in the Senate, I’m not going to analyze it with you piece by piece.  What I can say is we’ve been encouraged by the progress, and we believe -- and the President believes it’s very important that when it comes to the debt ceiling that we not do what a previous effort in the House would have done, which is try to create a scenario where budget negotiations and the renewal of government funding are once again tied directly to the essential responsibility of Congress to pay our bills -- and right before the holidays, which would have been -- would be a terrible outcome to this process, as every business owner will tell you -- and I think many of them have told you, and many of them have told their representatives in Congress.

Q    So does he hold firm to that assertion that he will not negotiate when it comes to Obamacare on the full faith and credit of the U.S. or on the government being shut down?

MR. CARNEY:  Yes.  He has made clear that -- he’s made clear two things, Brianna, as you know.  He is willing, within the context of broader budget negotiations, within the context of serious-minded and earnest discussions about how to improve the Affordable Care Act, to look at any proposal that might do that  -- going to Obamacare.  And that’s true on broader budget issues.

But some of the ideas that we’ve seen this morning, when it comes to sort of demanding ransom, to try to rally tea party members, in exchange for opening the government or raising the debt ceiling, that’s not acceptable and it has not been through this whole process.

Q    Speaker Boehner -- real quickly, is there nothing in the Boehner proposal that’s acceptable to you?

MR. CARNEY:  Reopening the government and extending the debt ceiling, that’s acceptable.

Q    The Obamacare provisions included in the Senate deal?

MR. CARNEY:  Again, I think two things.  One, as I understand it, there’s not a proposal in the House to talk about now, based on the press conference given by House Republican leaders.  And based on some of the reporting I’ve seen since then, that’s because they’re now going back to try to add some sweeteners for tea party members.

And the better course of action is the one being undertaken by Democrats and Republicans in the Senate.  Instead of trying to once again craft a measure to ensure full Republican support in the House, why not work on a measure that could get bipartisan support in the House, the way that Republicans and Democrats are trying to do in the Senate?  That’s certainly what I think is best for the American people.  It’s the kind of process that the President supports.  So, with regards to proposals that we haven’t seen, it’s hard to --

Q    But aren’t you cherry-picking which parts you’ll talk about?  Because you’re talking about the short-term funding and debt ceiling increase, but you won't talk about the other items.

MR. CARNEY:  Talking about the shutdown and the need to raise the debt ceiling -- yes, that’s what we’ve been talking about for weeks.

Q    But the time frame of it.

MR. CARNEY:  No, look, we’ve said all along that we want a debt ceiling increase for as long as possible because of the need to remove uncertainty from this process.  I mean, the very uncertainty that has been created by this manufactured crisis is what we need to avoid as an economy going forward, and what Washington needs to avoid, because it is already causing harm to the economy.  It is already causing uncertainty among Americans, which, in turn, has them making decisions about how they spend their money, which has a negative impact potentially on the economy.  And that creates a cascading effect that can only be bad, which is why we need to, here in Washington, why Congress needs to fulfill its basic responsibilities:  reopen the government, and make sure that the full faith and credit of the United States is upheld, as it has been in the past.

Jon.

Q    Jay, what exactly is the deadline?

MR. CARNEY:  For?

Q    Raising the debt ceiling, for default?

MR. CARNEY:  Well, those are two different things, as we’ve been explicitly clear about.  On October 17th, as the Treasury Secretary has noted many times, the United States runs out of borrowing authority, and beyond that point we only have cash on hand available to pay our bills.

The Treasury Secretary has testified to this on Capitol Hill and is obviously far more of an expert than I, so I would point you to his testimony and public statements about that fact.  But as everyone knows, in order to meet all of our obligations as a country, the United States needs borrowing authority in order to make sure that all of our bills are paid.  All of the obligations that Congress has made, all of the bills that Congress has incurred will come due.  And if we can only pay those bills with cash on hand, that is a problem.  And that is what --

Q    I’m just trying -- everybody has their countdown clocks, everything going on, and they seem to be counting down to midnight tomorrow.  But is it midnight tomorrow when the calendar strikes the 17th, or is there another day after that?

MR. CARNEY:  As much as I’d like to improve the quality of the countdown clocks -- (laughter) -- I would have to refer you to Treasury on the minute and the hour.

Q    Okay, well, more important than the countdown clocks, when does Congress need to act by?  Do they need to pass something by tomorrow?  Can something pass on Thursday?  Will the sky fall if it doesn't pass on Friday?  When is the deadline that they have got to produce something?  Is it tomorrow?

MR. CARNEY:  Jon, the deadline for --

Q    Midnight tomorrow?

MR. CARNEY:  -- avoiding uncertainty has passed.  The deadline for not shutting the government down has long since passed.  So Congress has already failed to act in a timely fashion.  But we hope that Congress will act quickly to resolve these issues now.

Q    I guess what I’m asking -- when is too late, Jay?  I’m just trying to figure out when is too late.

MR. CARNEY:  I’m not sure what that means.  They need to act as soon as possible, because what is absolutely true is that every day we’re in shutdown there is harm done to hundreds of thousands of Americans and, indirectly, to many, many more, and there’s direct harm done to our economy.  And every day that we get closer to the point beyond which we’ve never been, which is where the United States does not have borrowing authority, creates more trouble for our economy and uncertainty globally, which has a negative impact on our economy.

Q    Obviously, there’s a lot of anxiety in the bond market because of this.  Can bondholders be reassured that they will still receive their interest after tomorrow, after Thursday?

MR. CARNEY:  Jon, those are the kinds of questions that I think are best directed to the Treasury Department.  What is unquestionably the case is that when people talk about prioritization, they are talking about default by another name.  When people talk about paying some bills but not others, they are talking about entering a realm that this country and this government has never been in, which is picking and choosing who gets paid and when they get paid.  And that has tremendous negative consequences for our economy, not all of which are knowable beyond the fact that we know they're bad.

Q    No question.  But do you have a game plan?  Obviously, this is no longer hypothetical.  There’s a real possibility Congress doesn't act -- whatever the deadline exactly is.  Do you have a game plan of what to do?

MR. CARNEY:  Well, this is obviously something that the Treasury Department would have jurisdiction over, so I would refer you to Treasury.

Q    And one specific question.  This idea of suspending the medical device tax, I believe it’s been referred to as a ransom payment for part of this deal.  The Speaker’s office is saying that this idea was actually proposed by White House staff in negotiations last week.  Is that true or not?

MR. CARNEY:  That is not true.  What we have always said is that discussions of the medical device tax or other elements within the Affordable Care Act that lawmakers want to talk about in an effort to improve the Affordable Care Act we are willing to have, but not in the context of or as ransom for opening the government.  That is why a provision like that appears in the latest proposal that seems to be going nowhere from House Republicans -- because it’s an effort to try to buy votes from tea party Republicans who shut this government down in the first place.  And so there’s --

Q    So just to be clear, they're not telling the truth about that?

MR. CARNEY:  Again, that is not -- the conversations that have been had here and up on Capitol Hill about the medical device tax, as far as we’re concerned, have been about our willingness -- as the President said and others -- in a broader context; not ransom for opening the government, not ransom for Congress doing its job to pay our bills, but within the context of the President’s willingness to hear ideas about ways we can improve, as opposed to undermine or dismantle or defund Obamacare.  We’re willing to have that.  But we’re not going to pay ransom -- the President is not going to pay ransom from the American people to the tea party in order to open the government.

Q    I'd like to follow that and --

MR. CARNEY:  Sure.

Q    -- pin you down a little more closely.  Thursday, the Speaker’s spokesman said specifically that a White House official asked for repeal of the medical device tax.

MR. CARNEY:  That's just not the case.  That's just not the case.

Q    I’m not saying it’s in connection with any other part of the plan, but simply that it was asked for by the White House.

MR. CARNEY:  You’re saying that separate from anything, the White House proposed a change to the Affordable Care Act?  Obviously, that's not the case.  The issue of the medical device tax has been obviously in the air for the last several weeks.  And when I’ve had this question and others have taken this question, we have made clear that we would be willing to talk about lawmakers who want to address that provision, as well as other ideas that lawmakers might have about making changes to the Affordable Care Act that strengthen it or improve it.

When it comes to the medical device tax, I think it’s very important to note that those who portray themselves as paragons of fiscal responsibility and discipline often propose making that change without acknowledging the fact that it would raise the deficit.  So that's an important point to acknowledge, too.

But again, we have never said we would agree to paying ransom, making changes to the Affordable Care Act simply to placate tea party Republicans who shut this government down over their opposition to the Affordable Care Act.

Q    Just to be clear, in Thursday’s meeting, you’re saying --

MR. CARNEY:  I think I’ve answered this, Bill, three times.

Q    -- no one here asked for repeal of the medical device tax?

MR. CARNEY:  Correct.

Q    There are people on Wall Street and in Washington who speak openly about the real crunch point being November 1st, as opposed to Thursday the 17th.

MR. CARNEY:  On October 17th, as was made clear to Congress in a letter from the Treasury Secretary, we cease to have borrowing authority.  We only have cash on hand.  And as everyone knows who understands how this process works, that means we do not -- that is a scenario by which we will not be able to pay all our bills because of the fact that we need to borrow money in order to pay our bills.

And these are bills that Congress has incurred.  These are obligations that Congress has made.  This is not new debt.  This is not new spending.  There’s a lot of misrepresentation of that by those who claim that they came to Congress with a mandate never to raise the debt ceiling.  Because that has nothing to do with spending, okay?  It is just a --

Q    But this has to do with a feeling that any obligations like Social Security and other payments come due on November 1, and that between the 17th and the 1st --

MR. CARNEY:  What I can tell you is that we have a huge number of payments as a country that need to be made every day, and that there’s a series of obligations that the United States government has to fulfill.  For details about how that process works, I refer you to the Treasury Department.  But if anybody -- we've seen a lot of talk from deficit -- not deficit -- debt limit deniers and default deniers and they have been roundly shot down, that talk has been, by experts in the field, including CEOs and financial industry experts, including many of whom I think tend to have the ear of Republican lawmakers.

It is absolutely not the responsible thing to do to allow us as a nation to enter territory we've never been in before, which is to not have the authority to pay our bills.

Ed.

Q    Thank you.  Nice to talk to you.  I wanted to ask you about the President’s role in the final hours here.  Yesterday there was supposed to be a meeting with leaders in both parties. Today his schedule just has House Democratic leaders, not both parties.  Senator McCain, a short time ago on the Senate floor -- and he’s obviously been critical in recent days of his own party and has said that they need to come to a deal -- but a short time ago he said it’s a mistake for Democrats to reject Speaker Boehner’s latest proposal.  He said it’s, in his words, “a serious proposal.”  So my question is, does the President plan to, A, let the congressional leaders work this out in the final hours, or does he see that his role in the final hours -- because this is so critical, as you say -- that he will play some direct role in trying to force a deal?

MR. CARNEY:  I have no doubt the President will be in contact with congressional leaders of both parties as this process continues.  As you know, Ed, but didn’t include in your question, we postponed the meeting yesterday because of the progress that was being made in the Senate --

Q    True.  I wasn’t trying to --

MR. CARNEY:  So it is the President’s intention -- and it’s reflected by the meetings and conversations he’s been having with leaders, as well as the fact that he invited every member of Congress to the White House last week for discussions on this issue -- to engage directly with lawmakers as they try to resolve this issue, and try to do it in a way that, hopefully, reflects the bipartisan spirit that we've seen in the Senate process.  And we continue to hope that that will bear fruit and will produce something that can, in the end, lead to a resolution that opens the government, provides the authority to the Treasury for the United States to pays its bills, so that we can then focus on some of the bigger issues that we face as a country, instead of getting distracted by these manufactured crises that only do harm to the economy, only do harm to the American people, and apparently, according to a lot of Republican commentators, do a lot of harm to the Republican Party.  We need to get beyond this, for the sake of the country.

Q    Two other quick topics on some of the big issues you're talking about.  NSA -- The Washington Post has another revelation today saying that they’re collecting -- the NSA is collecting email contact lists not just of foreigners but of Americans.  How do you justify that?

MR. CARNEY:  As you know, I'm not in a position to discuss specific tools or processes, but as you know, the National Security Agency is focused on discovering and developing intelligence about valid foreign intelligence targets, such as terrorists, human traffickers and drug smugglers.  They are not interested in personal information about ordinary Americans.  Moreover, they operate in accordance with rules either approved by the Attorney General or the Foreign Intelligence Surveillance Court, as appropriate, designed to minimize the acquisition, use and dissemination of any such information.

So, again, the purpose here is to discover and develop intelligence about foreign intelligence targets.  That is the mission and that is purpose of the various methods that the NSA employs.

Q    But part of what you said is they’re not interested in private information of Americans, except The Washington Post says they collect the telephone numbers of Americans, the street addresses of Americans, business information, family information. So doesn’t that contradict what you're saying?

MR. CARNEY:  Well, no, Ed, in fact, they are not interested in the personal information of ordinary Americans.  They target foreign intelligence -- their targets are terrorists, human traffickers, drug smugglers and the like, and they gather foreign intelligence.  There are minimization procedures in place approved by the Attorney General and the FISA Court that are designed to minimize the acquisition, use and dissemination of any such information -- information that might be collected as part of the effort to target terrorists and the like.

Q    Last question.  Your predecessor, Robert Gibbs, had some interesting things to say about the health care rollout yesterday.  He said that it’s been botched.  And he said that when it gets fixed, “I hope they fire some people that were in charge of making sure that this thing was supposed to work.”  How do you react to that?  And since Republican Senator Pat Roberts has called for Secretary Sebelius to be fired, does she still have the full confidence of the President?

MR. CARNEY:  The Secretary does have the full confidence of the President.  She, like everyone else in this effort, is focused on our number-one priority, which is making the implementation of the Affordable Care Act work well.  People are working 24/7 to address the problems and isolate them and fix them when it comes to the website and enrollment issues.

The fact is the President wants these matters addressed because he wants to make sure that Americans across the country have the best possible consumer experience as they look at their options and the plans available to them and see the fact that for so many of them there’s affordable health insurance out there that was never there before.

And I think it’s important to note that even amidst this early stage of the enrollment process, and even though there have been challenges with the website, there are Americans across the country who are, through call centers and through the websites and through the states, getting access to this information and making -- seeing what choices are available to them, and enrolling if they’re ready to enroll.

And that includes a woman in Illinois who bought health insurance for her family with a savings of about $390 a month from their current average, according to the Chicago Tribune. In Mississippi, a woman who was skipping medication for years was able to enroll herself and her husband for a plan that will cost $60 a month.

I noticed last week in Utah, a father in a family of five, a small business owner, who said, “It took us half a dozen tries over several days, but he was able to strike gold on Saturday” -- silver, actually -- I'm quoting the Salt Lake Tribune -- with family health coverage purchased on the Affordable Care Act’s online exchange.  After plugging in particulars about his family of five, the Salt Lake City business owner was able to compare 38 plans and apply for tax credits to put towards his monthly premiums.  He settled on a silver-level plan that retails for about $850 a month.  After tax credits, his family will pay just $123 a month.  “It’s a great deal.  I'm thrilled to have coverage.”

So this is why we're doing this.  These are the people we're focused on helping.  And the President is committed and has instructed his team to work 24/7 to resolve the issues that have arisen when it comes to implementation.  But the purpose here is to provide benefits to those Americans who have struggled for so long without access to affordable health insurance.

Q    Without litigating the details and the countdown clocks one more time, very briefly, I want to ask you about October 17, if I can, quickly, and some of the urgency associated with that date.  When the sequester went into effect, there were predictions from this podium, dramatic predictions about long lines at airports, about special education funding.  Without denying the impact of a default when such a thing would take place, does that in any way undermine the White House’s or this administration’s credibility when it says October 17th is some form of a D-Day, when, in fact, the 18th, 19th, 20th may come and the sky may not fall -- what is the risk of that?

MR. CARNEY:  I would simply say that there is nobody in this field who understands how financial markets work and understands what the impact of default would be on the global economy who accepts the absurd position taken by the debt limit or default deniers.  This is a serious matter.  And we've been through this, and I've read quotes to you from numerous financial industry experts, numerous CEOs -- President Reagan, among others, who noted the importance of maintaining the full faith and credit of the United States.  And what we know is that on October 17th, we seize to have borrowing authority.  That means we can only pay our bills with cash on hand.

And we are the largest economy in the world and we have a lot of obligations and our obligations exceed our income.  And that is why we have to ensure that Treasury is able to borrow in order to pay our bills.

Q    If those obligations don't exceed our income for a matter of days, without specificity -- I'm not Jack Lew so I don't know the exact detail -- but the Treasury Department has indicated that there’s like a $6 billion payment on October 31st, $11 billion payment shy of that.  So the potential exists that we could go five, six, seven, eight days and nothing really happens. Isn't that a potential risk?

MR. CARNEY:  What’s at risk is even flirting with the idea that we should try to wait until the very last moment before a bill comes due that we can't pay.  This is the United States.  And the idea that we're going to send a signal to the world that it’s an acceptable proposition -- this is what some Republicans on Capitol Hill seem to be conveying -- that we can cross that threshold and just hope that we can resolve this before we have to delay a payment, already, once you get to that deadline, you’ve entered territory that we've never entered before.  And that sends a signal I think globally that there is uncertainty about the fidelity here in the United States to the principle that we always pay our bills on time.

And that is why this line has never been crossed, why administration after administration, both Democratic and Republican, has taken the position that we should never cross this line.  It’s why businessmen and women, CEOs who understand the impact that this would have on what they do and on the American economy have called on Congress to quit even flirting with the prospect of default.

So, again, for details on what would happen if we were to cross that line I would refer you to the Treasury Department.  We are focused on working with Congress to prevent that, as every member of Congress who cares about the American economy should be focused on at this time.

Q    Former Defense Secretary and CIA Director Leon Panetta this week said, “When you're operating by crisis I think there’s enough blame to go around.”  Does the President agree with one of his closest allies in the recent past that he should also bear some of the blame for the situation we're in right now?

MR. CARNEY:  Well, here’s what I would tell you.  There is no question, as we've discussed in the past, that there are no winners in a situation like this -- not the American people, not the American economy, and not members of either political party. And any politician who plays this as a political game, hoping to win, is making a mistake -- A.

B, the President’s position has been crystal-clear:  Don't shut the government down.  Once they shut it down -- reopen the government.  He’s asking for nothing in return.  He’s making no demands on Congress, insisting on nothing from them in order to sign a bill that would reopen the government with no strings attached.  The same when it comes to the responsibility of Congress to raise the debt ceiling.  There’s only one party to this process that has been saying, we would flirt with default, we would even allow default if we don't get what we want.

We are in a shutdown now, the 15th day of a government shutdown, the first shutdown in 17 years, because one faction of one party in one house of Congress decided that it was so opposed to a law that had been passed by Congress, signed into law by the President, upheld by the Supreme Court of the United States, and litigated -- to use your word -- in a presidential campaign in which the candidate who took their position lost, that they shut the government down over not achieving their aim, which was to do away with it.

So the President’s position has been that he has demanded nothing in return for Congress simply keeping the government open and simply doing its job to ensure that the United States does not default.

Q    Last question, very briefly -- an op/ed from the China State News Agency --

MR. CARNEY:  I missed that this morning.

Q    Okay, I'm sorry you missed it.  I'll read it for you, the quote is here.  They said, among other things, “It’s perhaps a good time for the befuddled world to start considering building a de-Americanized world.”  What’s the White House’s message to the Chinese?

MR. CARNEY:  Well, I don't have a message to any particular country.  I would simply say that it is an important fact that the full faith and credit of the United States, the principle that has existed for centuries that this country pays its bills and pays them on time -- and that includes paying investors from around the world -- the principle that this economy is a safe bet, and the safest bet, that investment in our country is as safe as any investment anywhere should not be compromised.  And those who would compromise it are flirting with something -- are risking something that has immense value to the nation and to the American people.

Carol.

Q    I wanted to follow on Brianna’s question just to clarify.  Is the President negotiating on whether or not to reopen the government and raise the debt limit?

MR. CARNEY:  Our position has been no ransom for reopening the government, no ransom for Congress fulfilling its responsibility to pay the U.S. bills.

Q    I understand.  Is he or is he not negotiating?  It’s a yes or no question.

MR. CARNEY:  Well, it depends on what you mean by “negotiate.”  He’s been having conversations with lawmakers.  What he will not do, what he has firmly made clear again and again is give the tea party its ideological agenda in exchange for Congress opening the government or Congress raising the debt ceiling so that the United States doesn’t default.  That has been his position all along.

It’s, I think, helpfully clear in its simplicity:  Open the government.  Pay our bills.  Stop threatening default.  Stop doing harm to our economy.  Stop doing harm to the American people.

And that's been our position all along.  And my goal coming out here wasn’t to reiterate those points that we've been saying for so long.  It was to make clear that we see progress in the Senate; we see in the Senate process the kind of bipartisan effort that is the path to resolving these kinds of issues when it comes to the simple responsibilities that Congress maintains  -- opening the government, funding it, making sure Congress pays its bills.  And we hope that all of Congress takes the appropriate action to ensure that they do not continue to inflict harm on the American economy.

Q    One other thing I want to clarify.  Since you’ve been talking, a spokesman for Speaker Boehner has said that for you to say that a senior administration official in Thursday’s meeting did not proactively raise the medical device issue is astoundingly dishonest and that it was a senior administration official who proposed it in those talks.  So can you just clarify --

MR. CARNEY:  I think I've answered the question three times --

Q    -- nobody from the White House raised the issue?

MR. CARNEY:  No, no, what I -- look, there have been conversations about the medical device tax because Republicans have been putting it on the table and others have been talking about it.  What we have always said is that we have never, ever proposed or agreed to pay ransom in exchange for opening the government.  And the proposal that had a brief existence this morning, apparently, before I guess the tea party pulled it down, contained within it a demand to placate the tea party related to the Affordable Care Act in exchange for opening the government.  And our position has always been we're not paying ransom for that.

So, again, it is astoundingly disingenuous to suggest that our position has ever been that we're going to pay ransom to the tea party in order for the Congress, for House Republicans, to open the government.

Q    May I ask on one other topic -- there's been a lot of focus on the shutdown, but it was not long ago we were all talking about Iran.  And has the President had any reaction to the talks that have been going on and the offer that the Iranians put on the table?

MR. CARNEY:  Well, I'm not sure there's an offer.

Q    Well, their proposal.

MR. CARNEY:  I think that there was a P5-plus-1 meeting in Geneva, the first day of it, and the Iranian delegation made a presentation and the P5-plus-1 and Iran spent the day discussing the presentation.  We're not going to negotiate this in public or go into the details of what was in their proposal.  We certainly want to make clear that no one -- despite the positive signs that we've seen -- no one should expect a breakthrough overnight.

These are very complicated issues -- in some cases, very technical issues.  And as the President has said, the mistrust here is very deep.  But we hope for progress in Geneva.  And although we appreciate the recent change in tone from the Iranian government on this issue, we will be looking for specific steps that address core issues, such as the pace and scope of its enrichment program, the transparency of its overall nuclear program and its stockpiles of enrichment.

The P5-plus-1 is seeking an agreement that ultimately resolves all of the international community's concerns about Iran's nuclear program. And while we negotiate, we will continue to keep up the economic pressure on Iran, which has brought about the occasion for at least the prospect of making progress.

Q    Can you characterize at all how you guys viewed the presentation?  Did you find it encouraging?  Was it a step in the right direction?  How did the President respond to that?

MR. CARNEY:  Well, I would simply say that after day one, we're hopeful that we will make progress in Geneva.  But beyond that, I wouldn't characterize the presentation or the status of conversations.

Margaret.

Q    Thanks, Jay.  Polling on this shutdown and default stuff has been just clearly bad for congressional Republicans.  It's not been great for everyone else either, but probably like worse for them, right across the board.  How do you think that should affect the way they proceed?  And how do you think that should affect how the White House proceeds and how much you should concede is the pressure is for you to make concessions?

MR. CARNEY:  Margaret, as the President said I think last week that there are no winners here and it's not the right thing to do to look at this as a partisan, zero-sum game.  The right thing to do is to make no partisan demands as part of Congress doing its basic job -- funding the government, making sure the United States pays its bills on time.

The President is more than eager to sit down and work with lawmakers of both parties to discuss a broader budget agreement in which we can, hopefully, find compromise when it comes to making necessary investments in key areas like education and innovation and infrastructure, while making balanced but tough choices when it comes to continuing the project of reducing our deficit and managing our long-term debt.

That's been evident in the proposals he has put forward, and he wants to get back to that.  But the context for that is budget negotiations where there are no guns on the table, where the threat of shutdown or the threat of continued shutdown is removed, the threat of default is removed, and lawmakers with good intentions from both parties, as well as the White House, can try to find a broader agreement on our budget priorities.  That would be good for the economy.  It would be good for the country.  And I think it would probably be good for everyone in Washington of both parties.

Q    The polling that's well done reflects at least a snapshot in time of how the public is feeling about a particular issue.  Do you feel that the broad spectrum of polling that's out there has been well done and does reflect a public sentiment?  Everybody looks at polling. You guys look at polling.  The Republicans look at polling.  What is the polling telling you about how the public feels and how both sides should proceed?

MR. CARNEY:  Margaret, I would just say that Americans are justifiably frustrated by dysfunction in Washington, by a decision from any quarter -- in this case a decision clearly made by House Republicans -- to shut the government down over a partisan dispute, or to threaten default for partisan reasons.  And, again, how the public views it I think is reflected in what's been played out here, which is that the President has taken a position where he has asked for nothing in return for Congress doing its job.  He is eager to sit down and have tough negotiations and conversations with Republicans and Democrats about our budget priorities, but only after these basic responsibilities are fulfilled, that the government reopen and the threat of default be removed.

Q    I'll try it one more way.  Do you think that Senate and House Republicans are paying attention to the polling?  Do you see any reflection of that --

MR. CARNEY:  Again, I just don't think that's the way we want to look at this here.

Q    You mean at the podium or in general?

MR. CARNEY:  I mean in general.  Look, here's the thing, whatever analysis you make of the data that you cite -- and I think there's a consensus that reflects what you said -- we wish it weren't so.  We wish instead Congress had simply kept the government open.  We wish instead that the House had allowed for a process by which Congress, without drama and delay, ensure that the United States would pay its bills into the future.

Just like we wish for the country, for deficit reduction, for our economy that the House would follow the Senate's lead and pass comprehensive immigration reform with a big bipartisan vote. That might be good for the Republican Party.  Analysts say so.  Republicans say so.  We hope they do it.

The President believes it's very important in our country to have two strong parties, and to have parties with sincere differences but lawmakers who are willing to make compromises and politicians who are willing to make compromises without sacrificing their principles but are willing to compromise in order to do the essential business of the American people and move our country forward.  That's the approach he has always taken.

And one of the things that has been particularly difficult in these last several years is that we've seen a highly partisan wing of one party drive the train, if you will, when it comes to how we move forward on these issues.  And that makes it very difficult.

Q    But you don't want to say from the podium that the polling bolsters the tact that the President has taken not to negotiate?

MR. CARNEY:  Again, the President's simple proposition has not been -- I think it's important, because if you shorthand it and say he doesn't want to negotiate, that ignores an entire calendar year in which he has been explicitly asking Republicans to sit down with him and negotiate on budget priorities.  He put forward a budget that reflected that.  He had numerous meetings and meals and conversations with Republicans in the Senate and the House about these very issues.

But he does not believe that our partisan differences should be the excuse for shutting down the economy -- in the worst-case scenario, if there were to be default -- or shutting down the government.  Because that's just using the American people and the American economy as pawns in this partisan dispute and that's not the right way to do things.  We ought to make sure that these essential functions are funded, make sure that the United States pays its bills.  And then, we should negotiate.

Tommy.

Q    Thanks, Jay.  I have three questions.

MR. CARNEY:  Three?

Q    Yes, sorry.  It's been a while.  First of all, I don't know if you're aware of this, but when I had a heart attack three years ago, I was uninsured and I haven't been able to get insurance ever since then.  But listening to all the pressure on the President to negotiate -- a lot of it from inside this room  -- made me think, is there a chance the President would be willing to delay Obamacare for a year if Republicans were to agree to delay heart attacks for a year?

MR. CARNEY:  Tommy, you know the President's position is that we need to implement the Affordable Care Act.  And when it comes to the millions of Americans across the country who have had a very hard time getting access to affordable health insurance, we need to focus on those folks and continue the business of implementing the Affordable Care Act, so that on January 1st, those Americans will be able to purchase this insurance, quality insurance at affordable rates for the first time.  Does that answer your question?

Q    Just for what it's worth, I was able to enroll in the exchange about a week and a half ago.  I haven't picked a plan yet, though.

My second question, I was talking to my mom this morning -- right out here, actually -- and she asked me to ask you to please open the government back up again.  And I know you can't just do that.  But she is really worried about her Social Security check. And I told her, don't worry, Mom, we'll get it taken care of.  I don't want you to worry.  But Steve Rattner last night said that October 23rd is one of these drop-dead dates that start to pile up.  And so I guess my question is should she be worried?

MR. CARNEY:  What I would say about that, which goes to the issue of the debt ceiling, is that the United States government through Congress has made a lot of commitments and has a lot of obligations, and those include the commitments and obligations that the Congress has made and we have made to America's seniors. And we need to never even contemplate the possibility that the timely provision of benefits to those seniors would be jeopardized by a decision by one faction of one party of one house of one branch of government to wage an ideological battle here in Washington.

So that's why -- I mean, that crystallizes the fact that there are real people who depend on some basic things.  And everybody in Washington -- Democrats and Republicans and independents -- should sort of agree to the principle that we ought to at the very least ensure that those people are taken care of and that the essential functioning of government is allowed to proceed and that the basic premise that the United States always pays its bills on time is not jeopardized.  So that's the position the President has taken.

Q    Last question -- do you remember the last debt ceiling deal there was a plan floated, it was called the McConnell plan, where Congress would authorize a debt ceiling increase for I think it was a year, a year and a half.  And it would hold a vote every so often, so that Republicans could vote no but it would require two-thirds majority to overrule, so it gave the President the authority.  Is something like the McConnell plan in the air now, being discussed now?  And if not, why not?

MR. CARNEY:  Well, I would basically direct you to Congress for the various plans under discussion and the plans that have been adopted in the past for how they fulfill their responsibility invested in them through the Constitution to pay our bills.  So Congress has the authority, whether it's to devise a scheme or a plan along the lines that you talk about, or simply just to take the vote and raise the debt ceiling.  That's not an authority that the President has.  That's an authority Congress has.

Q    Haven’t heard any conversations about that?

MR. CARNEY:  I'd just refer you to the Senate.

April and then, John and then, Julia -- and then, we'll go.

Q    Jay, basically you're saying Thursday -- and from what you said at the podium -- that you're not going to be able to pay all of your bills.  What should the American public be bracing for?  I mean, you're calmly almost screaming “fire.”

MR. CARNEY:  I'll just be clear that on Thursday the United States runs out of its borrowing authority.  And that means that the Treasury only has cash on hand to meet the obligations that the United States government has.

Q    Did you or did you not say that you're not going to be able to pay all of your bills?

MR. CARNEY:  Because we -- what I'm saying is the Treasury is the place to go for specific timetables about when bills come due and how that works.  What I'm saying is that as a nation, the reason why we need to raise the debt ceiling is to ensure that the Treasury can borrow money to make sure we meet all our obligations.  Inevitably, if your obligations exceed what you take in, you're in a situation where default is a possibility.  But the Treasury is the right place to address those questions.

And, look, again, April, I don't have the list of many outside experts who aren't crying “fire” -- they're crying “stop.”  Stop threatening the American and global economy with the prospect of default and just do the responsible thing and pass a bill that extends the debt ceiling, so that this is not even something that can happen or be contemplated.  So that's not us, certainly not us alone.  I think many folks from the business world and from both sides of the aisle here in Washington have acknowledged that we don't want to cross that line, because the consequences would be very negative.

Q    Jay, I'm not putting any blame anywhere, I'm just asking what should the American public be bracing for?  Because many persons already have had their paycheck stopped.  Many persons are concerned about government subsidies to programs.  Thursday, Friday, whenever -- when you're not able to pay all of your bills, what should the American public be bracing for?

MR. CARNEY:  No, I understand, April.  And I would just say, A, we hope we do not get to the point where that's a reality.  It's entirely within Congress's and, in many cases, the Speaker of the House's power to ensure that that does not happen.  Broadly speaking, I've said that there is reason to be concerned, given the disposition we've seen in Congress -- in particular among House Republicans, although some Senate Republicans as well -- to flirt with default, flirt with crossing that threshold beyond which we don't have borrowing authority.  And that's very dangerous.

We believe that there's a majority in both houses to ensure that, if given the chance, to ensure that this is not something that ever comes about.

I'm going to have to go, because I know there's Medal of Honor pre-positioning.

Q    I just have this last question.  As we deal with this, what is the construct as to why we're here?  We know it's partisan agendas and politics.  And Sunday, we saw situations at the White House, come to the White House where race was involved. Many persons are saying part of this now has to do with race, because the President is indeed an African American, a black man. Is race a part of this stalemate, this conversation?

MR. CARNEY:  April, I don't believe that that's the issue here.  I believe that this is a decision by -- Republicans shut the government down not because every Republican wanted it, but because Republican leaders in the House were listening to a faction within their own conference.  And it's important that when it comes to reopening the government a majority of the House be allowed to vote on a clean CR, for example, as we've talked about for a long time, and when it comes to the essential responsibility to ensure that the United States pays its bills, that Congress be able to take that action so that this threat is removed and everybody -- Republicans and Democrats -- can get about the business of discussing and negotiating over our budget priorities.

I’ve really got to go -- John, last one.

Q    Two quick ones -- I'll use shorthand here.  Does the President support the reinsurance provision --

MR. CARNEY:  John, I'm not going to negotiate over items of proposed bills that haven't been written or submitted.

Q    And can I get your reaction to Senate Minority Leader Mitch McConnell deciding to suspend negotiations until the House does or does not act today?

MR. CARNEY:  Again, we have seen progress in the Senate and we hope to see continued progress in the Senate.  We’ve seen a bipartisan approach in the Senate that we would hope that the House could emulate.

Julia, you get the last one.

Q    On the Affordable Care Act, can you give us both a timeframe for when you anticipate federal exchanges will be fully functional, what entities are working on it, and just as important, who pays for this fix?  Is this part of the contract, or is this an additional cost to the federal government?

MR. CARNEY:  Those are all questions for HHS and CMS.  I can tell you that, at the President’s direction, people are working 24/7 to resolve the problems that have arisen and taking steps to make sure that those many, many millions of Americans who are interested in the options available to them to purchase affordable health insurance, in many cases for the first time, have the best consumer experience possible.

And there are a lot of people hard at work on this.  But for details of the work being done and the process in place, I’d refer you to HHS.

Thanks, everybody.

END

PRESIDENT OBAMA'S MESSAGE ON CONTINUING EO REGARDING COLOMBIAN NARCOTICS TRAFFICKERS

FROM:  THE WHITE HOUSE
Message to the Congress -- Colombia Traffickers

TO THE CONGRESS OF THE UNITED STATES:

Section 202(d) of the National Emergencies Act, 50 U.S.C. 1622(d), provides for the automatic termination of a national emergency unless, within 90 days prior to the anniversary date of its declaration, the President publishes in the Federal Register and transmits to the Congress a notice stating that the emergency is to continue in effect beyond the anniversary date. In accordance with this provision, I have sent to the Federal Register for publication the enclosed notice stating that the national emergency with respect to significant narcotics traffickers centered in Colombia declared in Executive Order 12978 of October 21, 1995, is to continue in effect beyond October 21, 2013.

The circumstances that led to the declaration on October 21, 1995, of a national emergency have not been resolved. The actions of significant narcotics traffickers centered in Colombia continue to pose an unusual and extraordinary threat to the national security, foreign policy, and economy of the United States and to cause an extreme level of violence, corruption, and harm in the United States and abroad. For these reasons, I have determined that it is necessary to continue the national emergency declared in Executive Order 12978 with respect to significant narcotics traffickers centered in Colombia.

BARACK OBAMA

THE WHITE HOUSE,
October 16, 2013.