Qualcomm Announces Record Third Quarter Fiscal 2014 Results

SAN DIEGO, July 24, 2014 /PRNewswire/ — Qualcomm Incorporated (Nasdaq: QCOM), a leading developer and innovator of advanced wireless technologies, products and services, today announced results for the third quarter of fiscal 2014 ended June 29, 2014.

“We are pleased to report another record quarter with revenues, earnings per share and chip shipments reaching all-time highs, driven by broad-based demand for our industry-leading 3G/4G chipset solutions,” said Steve Mollenkopf, CEO of Qualcomm Incorporated. “Looking forward, although we have lowered our near-term financial outlook for the licensing business, we are pleased to be raising our fiscal year earnings per share guidance on better than expected performance in our semiconductor business.”

Third Quarter Results (GAAP)*

  • Revenues: 1 $6.81 billion, up 9 percent year-over-year (y-o-y) and 7 percent sequentially.
  • Operating income: 1 $2.08 billion, up 24 percent y-o-y and 4 percent sequentially.
  • Net income: 2 $2.24 billion, up 42 percent y-o-y and 14 percent sequentially.
  • Diluted earnings per share: 2 $1.31, up 46 percent y-o-y and 15 percent sequentially.
  • Effective tax rate: 1 10 percent.
  • Operating cash flow: $2.67 billion, up 29 percent y-o-y; 39 percent of revenues.
  • Return of capital to stockholders: $2.06 billion, including $1.35 billion through repurchases of 17.0 million shares of common stock and $706 million, or $0.42 per share, of cash dividends paid.

1 Throughout this news release, revenues, operating expenses, operating income, earnings before tax (EBT) and effective tax rates are from continuing operations (i.e., before adjustments for noncontrolling interests and discontinued operations), unless otherwise stated.

2 Throughout this news release, net income and diluted earnings per share are attributable to Qualcomm (i.e., after adjustments for noncontrolling interests and discontinued operations), unless otherwise stated.

Non-GAAP Third Quarter Results*

Non-GAAP results exclude the QSI (Qualcomm Strategic Initiatives) segment and certain share-based compensation, acquisition-related items and tax items.

  • Revenues: $6.81 billion, up 9 percent y-o-y and 7 percent sequentially.
  • Operating income: $2.43 billion, up 19 percent y-o-y and 4 percent sequentially.
  • Net income: $2.47 billion, up 35 percent y-o-y and 10 percent sequentially.
  • Diluted earnings per share: $1.44, up 40 percent y-o-y and 10 percent sequentially.
  • Effective tax rate: 13 percent.

Detailed reconciliations between GAAP and Non-GAAP results are included within this news release.

* The following should be considered in regards to the year-over-year and sequential comparisons:

  • The third quarter of fiscal 2014 results included:
    • $208 million of income, or $0.12 per share, of which $184 million was recorded in other income, due to the reversal of accruals related to our litigation with ParkerVision; and
    • $164 million of charges, or $0.08 per share, that resulted from an impairment on goodwill and long-lived assets related to our QMT (Qualcomm MEMS Technologies) division.
  • The third quarter of fiscal 2013 results included:
    • $158 million charge, or $0.06 per share, that resulted from an impairment on long-lived assets related to our QMT division.

Third Quarter Key Business Metrics

  • MSM™ chip shipments: 225 million units, up 31 percent y-o-y and 20 percent sequentially.
  • March quarter total reported device sales: approximately $58.1 billion, up 3 percent y-o-y and down 13 percent sequentially.
    • March quarter estimated 3G/4G device shipments: approximately 250 to 254 million units, at an estimated average selling price of approximately $228 to $234 per unit.

Cash and Marketable Securities

Our cash, cash equivalents and marketable securities totaled $32.7 billion at the end of the third quarter of fiscal 2014, compared to $30.4 billion a year ago and $32.1 billion at the end of the second quarter of fiscal 2014. On July 18, 2014, we announced a cash dividend of $0.42 per share payable on September 24, 2014 to stockholders of record as of the close of business on September 3, 2014.

Research and Development

($ in millions)

Non-GAAP

QSI

Share-Based 
Compensation

Acquisition- 
Related 
Items

GAAP

Third quarter fiscal 2014

$

1,251

$

1

$

174

$

3

$

1,429

As % of revenues

18%

21%

Third quarter fiscal 2013

$

1,130

$

1

$

166

$

1

$

1,298

As % of revenues

18%

21%

Year-over-year change ($)

11%

N/M

5%

N/M

10%

N/M – Not Meaningful

Non-GAAP research and development (R&D) expenses increased 11 percent y-o-y primarily due to an increase in costs to develop CDMA-based 3G, OFDMA-based 4G LTE and other technologies for integrated circuit and related software products and to expand our intellectual property portfolio.

Selling, General and Administrative

($ in millions)

Non-GAAP

QSI

Share-Based 
Compensation

Acquisition- 
Related 
Items

GAAP

Third quarter fiscal 2014

$

484

$

4

$

88

$

6

$

582

As % of revenues

7%

9%

Third quarter fiscal 2013

$

505

$

6

$

96

$

6

$

613

As % of revenues

8%

10%

Year-over-year change ($)

(4%)

(33%)

(8%)

N/M

(5%)

N/M – Not Meaningful

Non-GAAP selling, general and administrative (SG&A) expenses decreased 4 percent y-o-y primarily due to a decrease in selling and marketing expenses.

Effective Income Tax Rates

Our fiscal 2014 annual effective income tax rates are estimated to be 14 percent for GAAP and 15 percent for Non-GAAP, both of which include the United States federal R&D tax credit generated through December 31, 2013, the date on which the credit expired. During the third quarter of fiscal 2014, we recorded a $66 million tax benefit as a result of an agreement reached with the Internal Revenue Service related to transfer pricing on our fiscal 2013 tax return, which was excluded from Non-GAAP results.

Business Outlook

The following statements are forward looking, and actual results may differ materially. The “Note Regarding Forward-Looking Statements” in this news release provides a description of certain risks that we face, and our most recent quarterly report on file with the Securities and Exchange Commission (SEC) provide a more complete description of risks.

Our outlook does not include provisions for future asset impairments or for pending legal matters, other than future legal amounts that are probable and estimable. Further, due to their nature, certain income and expense items, such as realized investment and certain derivative gains or losses, cannot be accurately forecast. Accordingly, we only include such items in our financial outlook to the extent they are reasonably certain; however, actual results may differ materially from the outlook.

During the fourth quarter of fiscal 2014, we expect to complete a minimum of $1 billion in stock repurchases under our current stock repurchase program. Our outlook for fiscal 2014 diluted earnings per share includes an estimate of the benefit related to stock repurchases.

China continues to present significant opportunities for us, particularly with the rollout of 4G LTE, but also presents significant challenges, as our business practices continue to be the subject of an investigation by the China National Development and Reform Commission (NDRC). Please refer to our Quarterly Report on Form 10-Q for the third quarter ended June 29, 2014 filed with the SEC for our most recent disclosures regarding the NDRC investigation.

We also believe that certain licensees in China currently are not fully complying with their contractual obligations to report their sales of licensed products to us (which includes certain licensees underreporting a portion of their 3G/4G device sales and a dispute with a licensee) and that unlicensed companies may seek to delay execution of new licenses while the NDRC investigation is ongoing. We expect calendar year 2014 3G/4G device shipments to be approximately 1.3 billion globally. However, our estimate of calendar year 2014 3G/4G device shipments that we currently expect to be reported to us is approximately 1.04 billion to 1.13 billion, which is adjusted for units that we believe may not be reported to us, are in dispute or are currently unlicensed. We are taking steps to address these issues, although the timing of any resolution is uncertain.

The following table summarizes GAAP and Non-GAAP guidance based on the current outlook. The Non-GAAP outlook presented below is consistent with the presentation of Non-GAAP results included elsewhere herein.

Qualcomm’s Business Outlook Summary

FOURTH FISCAL QUARTER

Q4 FY13

Results

Current Guidance

Q4 FY14 Estimates

Revenues

$6.48B

$6.5B – $7.4B

Year-over-year change

even – increase 14%

Non-GAAP diluted earnings per share (EPS)

$1.05

$1.20 – $1.35

Year-over-year change

increase 14% – 29%

Diluted EPS attributable to QSI

($0.01)

$0.00

Diluted EPS attributable to share-based compensation

($0.13)

($0.13)

Diluted EPS attributable to acquisition-related items

($0.04)

($0.04)

GAAP diluted EPS

$0.86

$1.03 – $1.18

Year-over-year change

increase 20% – 37%

Metrics

MSM chip shipments

190M

230M – 245M

Year-over-year change

increase 21% – 29%

Total reported device sales (1)

approx. $60.2B*

approx. $53.0B – $59.0B*

Year-over-year change

decrease 2% – 12%

*Est. sales in June quarter, reported in September quarter

FISCAL YEAR

FY 2013

Results

Prior Guidance

FY 2014 Estimates (2)

Current Guidance 
FY 2014 Estimates

Revenues

$24.87B

$26.0B – $27.5B

$26.3B – $27.2B

Year-over-year change

increase 5% – 11%

increase 6% – 9%

Non-GAAP diluted EPS

$4.51

$5.05 – $5.25

$5.21 – $5.36

Year-over-year change

increase 12% – 16%

increase 16% – 19%

Diluted EPS attributable to QSI

$0.02

($0.01)

($0.01)

Diluted EPS attributable to share-based compensation

($0.51)

($0.51)

($0.51)

Diluted EPS attributable to acquisition-related items

($0.16)

($0.16)

($0.16)

Diluted EPS attributable to tax items

$0.04

N/A

$0.04

GAAP diluted EPS

$3.91

$4.37 – $4.57

$4.57 – $4.72

Year-over-year change

increase 12% – 17%

increase 17% – 21%

Metrics

Est. fiscal year* 3G/4G device average selling price range (1)

approx. $223 – $229

approx. $218 – $228

approx. $222 – $228

*Shipments in Sept. to June quarters, reported in Dec. to Sept. quarters

CALENDAR YEAR Device Estimates (1)

Calendar 2013

Estimates

Prior Guidance
Calendar 2014

Estimates

Current Guidance

Calendar 2014

Estimates

Est. 3G/4G device shipments

March quarter

approx. 244M – 248M

not provided

approx. 250M – 254M

June quarter

approx. 260M – 264M

not provided

not provided

September quarter

approx. 276M – 280M

not provided

not provided

December quarter

approx. 295M – 299M

not provided

not provided

Est. calendar year range (approx.)

1,075M – 1,091M

1,220M – 1,300M

1,040M – 1,130M (3)

 

(1)

Total reported device sales is the sum of all reported sales in U.S. dollars (as reported to us by our licensees) of all licensed CDMA-based, OFDMA-based and CDMA/OFDMA multimode subscriber devices (including handsets, modules, modem cards and other subscriber devices) by our licensees during a particular period (collectively, 3G/4G devices). The reported quarterly estimated ranges of average selling prices (ASPs) and unit shipments are determined based on the information as reported to us by our licensees during the relevant period and our own estimates of the selling prices and unit shipments for licensees that do not provide such information. Not all licensees report sales, selling prices and/or unit shipments the same way (e.g., some licensees report sales net of permitted deductions, including transportation, insurance, packing costs and other items, while other licensees report sales and then identify the amount of permitted deductions in their reports), and the way in which licensees report such information may change from time to time. In addition, certain licensees may not report (in the quarter in which they are contractually obligated to report) their sales of certain types of subscriber units, which (as a result of audits, legal actions or for other reasons) may be reported in a subsequent quarter. Accordingly, total reported device sales, estimated unit shipments and estimated ASPs for a particular period may include prior period activity that was not reported by the licensee until such particular period.

(2)

Our prior guidance for fiscal 2014 GAAP diluted EPS excluded a $66 million tax benefit that we recorded in the third quarter of fiscal 2014 as a result of an agreement reached with the Internal Revenue Service, which was excluded from our Non-GAAP results.

(3)

We expect calendar year 2014 3G/4G device shipments to be approximately 1.3 billion globally. However, our estimate of calendar year 2014 3G/4G device shipments that we currently expect to be reported to us is approximately 1.04 billion to 1.13 billion, which is adjusted for units that we believe may not be reported to us, are in dispute or are currently unlicensed. We are taking steps to address these issues, although the timing of any resolution is uncertain.

N/A – Not Applicable

Sums may not equal totals due to rounding.

Results of Business Segments

The following table reconciles our Non-GAAP results to our GAAP results ($ in millions, except per share data):

SEGMENTS

QCT

QTL

Non-GAAP Reconciling 
Items (1) (2)

Non-GAAP (3)

QSI (3)

Share-Based Compensation (3)

Acquisition- 
Related 
Items (3)

Tax 
Items

GAAP

Q3 – FISCAL 2014

Revenues

$4,957

$1,803

$46

$6,806

$—

$—

$—

$—

$6,806

Change from prior year

17%

(3%)

(70%)

9%

9%

Change from prior quarter

17%

(13%)

(13%)

7%

7%

Operating income (loss)

$2,425

($5)

($274)

($71)

$—

$2,075

Change from prior year

19%

29%

2%

—%

24%

Change from prior quarter

4%

17%

(9%)

21%

4%

EBT

$1,116

$1,550

$177

$2,843

($1)

($274)

($71)

$—

$2,497

Change from prior year

51%

(5%)

N/M

29%

N/M

2%

—%

31%

Change from prior quarter

51%

(15%)

N/M

7%

97%

(9%)

21%

10%

EBT as % of revenues

23%

86%

N/M

42%

37%

Net income (loss)

$2,470

$—

($232)

($66)

$66

$2,238

Change from prior year

35%

N/M

(5%)

(3%)

N/M

42%

Change from prior quarter

10%

N/M

(17%)

19%

N/M

14%

Diluted EPS

$1.44

$0.00

($0.14)

($0.04)

$0.04

$1.31

Change from prior year

40%

N/M

(8%)

—%

N/M

46%

Change from prior quarter

10%

N/M

(27%)

20%

N/M

15%

Diluted shares used

1,714

1,714

1,714

1,714

1,714

1,714

Q2 – FISCAL 2014

Revenues

$4,243

$2,071

$53

$6,367

$—

$—

$—

$—

$6,367

Operating income (loss)

2,337

(6)

(251)

(90)

1,990

EBT

$740

$1,834

$78

2,652

(39)

(251)

(90)

2,272

Net income (loss)

2,255

(17)

(198)

(81)

1,959

Diluted EPS

$1.31

($0.01)

($0.11)

($0.05)

$—

$1.14

Diluted shares used

1,719

1,719

1,719

1,719

1,719

1,719

Q3 – FISCAL 2013

Revenues

$4,222

$1,867

$154

$6,243

$—

$—

$—

$—

$6,243

Operating income (loss)

2,035

(7)

(280)

(71)

1,677

EBT

$738

$1,633

($161)

2,210

51

(280)

(71)

1,910

Net income (loss)

1,823

43

(222)

(64)

1,580

Diluted EPS

$1.03

$0.02

($0.13)

($0.04)

$—

$0.90

Diluted shares used

1,765

1,765

1,765

1,765

1,765

1,765

Q4 – FISCAL 2013

Revenues

$4,457

$1,874

$149

$6,480

$—

$—

$—

$—

$6,480

Operating income (loss)

1,940

(11)

(274)

(67)

1,588

EBT

$702

$1,622

($151)

2,173

(11)

(274)

(67)

1,821

Net income (loss)

1,818

(24)

(226)

(67)

1,501

Diluted EPS

$1.05

($0.01)

($0.13)

($0.04)

$—

$0.86

Diluted shares used

1,738

1,738

1,738

1,738

1,738

1,738

SEGMENTS

QCT

QTL

Non-GAAP Reconciling 
Items (1) (2)

Non-GAAP (3)

QSI (3)

Share-Based Compensation (3)

Acquisition-
Related 
Items (3)

Tax 
Items

GAAP

9 MONTHS – FISCAL 2014

Revenues

$13,816

$5,774

$205

$19,795

$—

$—

$—

$—

$19,795

Change from prior year

13%

2%

(54%)

8%

8%

Operating income (loss)

$6,611

($16)

($806)

($231)

$—

$5,558

Change from prior year

(2%)

20%

3%

(3%)

(1%)

EBT

$2,762

$5,054

($217)

$7,599

($36)

($806)

($231)

$—

$6,526

Change from prior year

11%

2%

N/M

3%

N/M

3%

(3%)

2%

EBT as % of revenues

20%

88%

N/M

38%

33%

Discontinued operations, net of tax (4)

$430

$—

$—

$—

$—

$430

Net income (loss)

$6,888

($13)

($655)

($213)

$66

$6,073

Change from prior year

13%

N/M

1%

—%

3%

13%

Diluted EPS

$4.01

($0.01)

($0.38)

($0.12)

$0.04

$3.53

Change from prior year

16%<

Tablet Shipments Rose by 6 Percent Year-on-Year in Q2 2014 says Strategy Analytics

BOSTON, July 24, 2014 /PRNewswire/ — According to the latest research from Strategy Analytics, global tablet shipments reached 52.9 million units in the second quarter of 2014. Android secured a robust 70 percent global share, while Apple iPad shipments were below expectations and iOS fell to 25 percent. Windows secured a 5 percent global share.

Logo – http://photos.prnewswire.com/prnh/20130207/NE56457LOGO-b

Peter King, Director of Tablet research at Strategy Analytics, said, “Global Tablet shipments reached 52.9 million units in Q2 2014, up 6 percent from 50.0 million in Q2 2013. Android consolidation continued as it was the chosen OS for seven out of ten Tablets shipped in the market. Android vendors shipped 36.8 million units between them worldwide in Q2 2014, up 11% from 33.2 million a year earlier. Android is continuing to make steady progress due to the wide range of vendors and wide range of screen sizes and price-points.” King added, “Apple iOS shipments (sell-in) were 13.3 million iPads in Q2 2014 leaving it with a 25% share of the global Tablet market. The 13.3 million shipments represented decline of 9% annually and 19% sequentially; it is nine quarters since Apple produced such a low Tablet shipment figure.”

Exhibit 1: Global Tablet Operating System Shipments and Market Share in Q1 2014 (preliminary)

Global Tablet OS Shipments (Millions of Units)

Q2’13

Q2’14

Apple iOS

14.6

13.3

Android

33.2

36.8

Windows

2.1

2.7

Others

0.1

0

Total

50

52.9

Global Tablet OS Marketshare %

Q2’13

Q2’14

Apple iOS

29%

25%

Android

66%

70%

Windows

4%

5%

Others

0%

0%

Total

100%

100%

Growth Year-on-Year %

39%

6%

Source: Strategy Analytics Tablets & Touchscreen Service

Shipments refer to sell-in. Numbers are rounded. The definition of Tablet does not include e-book readers or convertible PCs

Click here for the full report:
https://www.strategyanalytics.com/default.aspx?mod=reportabstractviewer&a0=9886

Published by the Strategy Analytics Tablet & Touchscreen Strategies (TTS) service.

Frost & Sullivan: Tablets to Bridge the Gap with Smartphones

LONDON, July 24, 2014 /PRNewswire/ — The use of smartphones and laptops is widespread among enterprises, with nearly three out of every four organizations issuing corporate-owned laptops (74 percent) and smartphones (71 percent) to their workforces. Tablets, on the other hand, are issued by only half (47 percent) the surveyed enterprises; however, these devices are expected to bridge this gap over the next three years, as many of the more data-intensive mobile applications migrate over to the tablets.

New analysis from Frost & Sullivan (http://www.wireless.frost.com), The Future of Mobile Devices from a Customer Perspective — United States and Europe, finds that by 2016, the use of smartphones is expected to decrease from the current levels of 66 percent to 58 percent, while tablets are expected to increase from 49 percent to 56 percent.

Interestingly, while almost 60 percent of organizations allow personal devices to be connected to the corporate network, only four out of ten IT decision makers report that their company has a formal bring your own device (BYOD) policy in place.

“Approximately 58 percent of large enterprises have a formal BYOD policy, while only 20 percent of small businesses have a standardized policy,” said Frost & Sullivan Research Analyst Karolina Olszewska. “The most common method of enforcing BYOD policies is through network technology solutions at 67 percent, followed by mobile device management at 61 percent.”

The enterprise mobile device landscape is rapidly changing, evidenced by the surprising emergence of Android as the most common (56 percent) mobile operating system supported for organization-owned devices. This is followed by iOS (41 percent), Windows Mobile (30 percent) and BlackBerry (28 percent).

While the banking, finance and insurance sector has been the most prominent user of smart phones for business purposes among the verticals surveyed in 2013, in the tablet segment, manufacturing took top honours.

 “Overall, 62 percent of the workforce is traditional, working at office locations. Mobile workers account for 22 percent and remote workers the remaining 16 percent,” noted Olszewska. “Although this trend is not expected to change drastically within the next three years, the number of in-office workers is expected to decrease, while remote and mobile workers are expected to increase, signifying greater opportunities for smartphone and tablet makers.”

If you are interested in more information on this study, please send an email to Edyta Grabowska, Corporate Communications, at edyta.grabowska@frost.com.

Future of Mobile Devices from a Customer Perspective — United States and Europe is part of the Mobile & Wireless Communications Growth Partnership Service program. Frost & Sullivan’s related studies include: South African Data Centre Market, Unified Communications and Collaboration (UC&C) in the Cloud in Latin America, Analytics on a Transformation Path — From a ‘Good-to-Have’ to a ‘Must -Have Solution’ and UK Leads Cellular M2M Connections Growth in Europe. All studies included in subscriptions provide detailed market opportunities and industry trends evaluated following extensive interviews with market participants.

Daily Briefing by the Press Secretary Josh Earnest, 07/22/14

The White House

Office of the Press Secretary

For Immediate Release

July 22, 2014

James S. Brady Press Briefing Room

11:20 A.M. EDT

MR. EARNEST:  Good morning, everybody.  Don’t start off too many briefings by saying that.  It’s nice to see you all.  We’re doing this early today to accommodate the President’s travel and the speaking event that he has a little after noon today.  So we’ll try to be quick.  I do have one statement quickly at the top.

As you know, some of your colleagues who are in the in-town travel pool today are not here right now.  They’re with the President who is visiting the Embassy of the Netherlands here in Washington, D.C., to sign a condolence book honoring those who were lost in the tragic shoot-down of Malaysia Airlines Flight 17 in Ukraine.  So I don’t anticipate that the President is going to have any remarks there, but there should be some footage that you guys will have access to of the President signing that condolence book.

With that, Julie, do you want to get us started today?

Q    Thanks, Josh.  Is there White House reaction to the federal appeals court ruling this morning that basically invalidates the health care subsidies for people in states that haven’t set up the exchanges?

MR. EARNEST:  I know that there will be a statement coming from the Department of Justice on this.  They obviously are representing the position of the United States government and the administration for the D.C. circuit, so I’d refer you to that statement.  I do have a couple of thoughts, though, you won’t be surprised to hear.

The first is it’s important for people all across the country to understand that this ruling does not have any practical impact on their ability to continue to receive tax credits right now.  Right now there are millions of Americans all across the country who are receiving tax credits from the federal government as a result of the Affordable Care Act that is making health care more affordable for them, and while this ruling is interesting to legal theorists, it has no practical impact on their tax credits right now.

The second is there are four different cases of making this point that are making their way through the federal court system. Two of them have been dismissed at the district court level; two of them are awaiting their initial rulings.  This, of course, is the appeal of one of those cases.  So there is decidedly mixed legal opinion about this, but for those who are keeping score, we’re still ahead two to one here.

What I do anticipate the Department of Justice will do is they will ask for a ruling from the full D.C. circuit.  As you know, this was a decision that was issued just by three members of the D.C. circuit, two of whom ruled against the federal government and one agreed with the government’s position. 

Now, it’s important for people to also understand that some of those district courts that have thrown out this case have been decided by judges who used some pretty strong rhetoric in doing so.  There’s a judge in this case at the district level who said, “There is simply no evidence in the statute itself or in the legislative history of any intent by Congress to support the claims that are made by the plaintiff.”  In another case that was making the same legal argument a judge wrote that the theory propounded by the plaintiffs was “not a viable theory.”

The last thing that’s important — and this is — there’s a lot of high-minded case law that’s applied here; there’s also an element of common sense that should be applied as well, which is that you don’t need a fancy legal degree to understand that Congress intended for every eligible American to have access to tax credits that would lower their health care costs regardless of whether it was state officials or federal officials who are running the marketplace.  I think that is a pretty clear intent of the congressional law.

This will work its way through the legal process and we are confident in the legal case that the Department of Justice will be making. 

Q    Obviously, as these cases do work through the legal system, there could ultimately end up being a practical impact on people who are receiving subsidies.  Can the health care law work effectively and continue to, as you say, be affordable for Americans without the subsidies being available in all states?

MR. EARNEST:  We are confident in the legal position that we have that millions of Americans —

Q    If that legal position no longer becomes tenable, can the law work if these subsidies are not widely available?

MR. EARNEST:  Well, that is a hypothetical we may be able to entertain at some point, but right now we are confident in the legal basis that supports our case.  The Department of Justice will litigate these claims through the federal court system.  And again, our confidence is rooted in the fact that it is pretty obvious what the congressional intent was here.  Their intent was for every eligible American who applied for tax credits to make their health care more affordable to have access to those tax credits regardless of whether it was state officials or federal officials who were running the marketplace.

Q    And if I could ask on a separate topic, can you give us some context on the President’s decision to send Denis McDonough and Lisa Monaco to Germany today?

MR. EARNEST:  Well, you’ve seen the statement that has been put out — I think the statement originated in Germany where the Chief of Staff and Ms. Monaco currently are.  This meeting was the result of a telephone conversation between the President and Chancellor Merkel in the last week or so where they agreed that Mr. McDonough and Ms. Monaco, who are the President’s Chief of Staff and his top Homeland Security Advisor, respectively — that they would travel to Germany to meet with their counterparts to talk through some of the issues that have been covered in the media.

It was an opportunity for them to meet and discuss in the course of intensive talks the state of bilateral relations and future cooperation.  There were a full range of issues that were discussed, including intelligence and security cooperation.  Mr. McDonough and his counterpart agreed to set up a structured dialogue to address concerns of both sides and establish guiding principles as the basis for continued and future cooperation.

Q    Did McDonough and Monaco bring with them any specific information or answers for the Germans on these two allegations of U.S. spies in Germany?

MR. EARNEST:  Well, I’m not going to get into the substance of the talks.  I would describe the talks as productive and a useful trip.  But as we’ve said a couple of times as it relates to these reports, it is the view of the United States that differences of opinion or differences of perspective on these kinds of matters are best resolved through established diplomatic and intelligence channels, and that’s exactly what we’re doing.

Steve.

Q    What does that mean, structured dialogue?  What does it mean?

MR. EARNEST:  I think it’s simply the basis of future discussions on these kinds of issues.  And again, it is our view that these kinds of differences are best resolved through these private established channels and not litigated through the media.

Q    President Putin is saying Russia would use its influence to allow a full investigation into the downed jet.  Are you detecting a change in tone from the Kremlin?

MR. EARNEST:  Well, there was some news from that region that we welcome for a change.  We welcome the news that most of the remains of those who perished in Malaysian Airlines Flight 17 as well as the black boxes are now in the hands of Dutch and Malaysian authorities.  While that is one step in the right direction, international investigators led by the Dutch still need immediate and full access to the site.

As you point out, Russia did say today that it will use its influence over the separatists to get them to fully cooperate, and we intend to hold the Russians to that.

Q    And so investigators still don’t have access, though?

MR. EARNEST:  They don’t have —

Q    Are there still the intimidation tactics, the firing in the air and —

MR. EARNEST:  I think what we have seen is we have seen conditions on the ground improve.  And that’s illustrated by the fact that we’ve made progress on a couple of — those two matters that I addressed at the top.  I don’t think we’ve seen yet the level of cooperation with international investigators that we’d like to see to this point. 

This is a complicated issue and one we anticipate that — we anticipate it’s going to require some work to get the kind of cooperation that we would like to see.  But time is of the essence here.  And as the President said yesterday, it is the least that those separatists could do to cooperate with international investigators, give them the access that they need to that site so that they can conduct a transparent investigation and determine what exactly happened.

Jim.

Q    Anything new on the evidence in the plane crash investigation?  I know yesterday some senior administration officials were telling reporters on background that the black boxes were not perhaps as important as the wreckage itself.  And there are some reports about burn marks on some of the pieces of wreckage at the crash site.  Is that a promising sign?  Any new evidence to present that bolsters the U.S. case as to what happened?

MR. EARNEST:  Well, there has been a lot of evidence that’s already been presented that paints a pretty compelling picture.  If you’ll indulge me for a little bit here, I just want to review what that is.  We’ve been saying for months, and in some settings the Russians have acknowledged, that they’re actively supporting the rebels, the separatists in eastern Ukraine.  In fact, some of the separatist leaders are actually of Russian citizenship.

We’ve seen reports of heavy weapons moving across the Russian border into Ukraine.  In fact, that was the reason for the sanctions regime that this administration anthnounced last week, was the continued evidence of heavy weapons moving from Russia into Ukraine.  We’ve seen evidence that Russians are training separatists on how to use those weapons.  Those weapons include anti-aircraft weapons.  In fact, the separatists have bragged in the last several weeks of shooting down three different aircraft.  And there’s ample social media evidence to indicate that the separatists have access to the kind of SA-11 missile system that is capable of reaching aircraft that are flying at high altitudes. 

Now, the other thing that we know is that the Malaysia Airlines Flight 17 was downed by a missile that was fired from the ground.  That missile was fired from a separatist-controlled area.  And at the time, the Ukrainian military was not operating anti-aircraft weapons in that area at that time.  After the plane was downed, there were ample social media accounts to indicate that an SA-11 system that appeared to be missing one specific missile was being transported back across the border from Ukraine to Russia.  There were also social media accounts of separatists talking about shooting down an airplane.

So there is a lot of evidence that’s already been marshaled.

Q    Is it a circumstantial case at this point, to use a legal term?

MR. EARNEST:  Well, there will be a role for a more formal intelligence assessment to be presented.  I do expect that you’ll hear from intel officials later today who will have some more data to present and some more evidence to indicate — I guess, some more evidence to educate you about what we know so far about that situation, but I will leave specific intelligence assessments to them.  They’re the experts who can analyze this data and can be more effective in drawing a more conclusive case. But I will leave that to them.

Q    Apparently U.S. carriers are now making the decision to not fly over parts of Israel because of the violence down there. Does the administration, I guess, support that?  Was the administration pivotal in making that change and asking the carriers to do this?

MR. EARNEST:  Well, as it relates to the airspace in Gaza, it’s my understanding that the FAA has not issued any notices related to the ongoing violence in that region of the world.  I do think this does serve to illustrate, though, that it’s individual carriers who make the decision about their flight plans and whether or not to alter specific routes based on hostilities on the ground.

Q    Some people have raised the question about Malaysian Airlines and should they have been flying over that airspace in Ukraine.  Does the administration have a take on that as to whether that was —

MR. EARNEST:  Ultimately, it’s individual carriers — in this case, Malaysian Airlines — who is responsible for determining the appropriate flight path.

Q    Okay.  And one question on the trip this week that the President is taking out West to do some fundraising.  He, I guess, was going to go on the Jimmy Kimmel Show but then that, I guess, booking was canceled by the White House.  Was the White House concerned about the image that might be put out if the President was there on a late-night talk show with everything going on?

MR. EARNEST:  What I can say, Jim, is that we had been in touch with representatives of Mr. Kimmel’s show about the possibility of participating — about having the President participate in that program on this trip.  We ultimately elected not to have the President do that interview over the course of this trip, and that is at least in part related to the challenges of doing a comedy show in the midst of some of these other more serious matters that the President is dealing with in the international scene.

Q    This wasn’t a good idea.

MR. EARNEST:  Well, at this point, we just elected not to do it.

John.

Q    Thank you, Josh.

MR. EARNEST:  You’re welcome.

Q    Getting back yesterday to the U.S. being supportive of the European Union also joining in sanctions against Russia, you’re obviously aware of the difference between Britain and France on the sale of the Mistral helicopter carriers to Russia. Does the U.S. have a dog in the fight, and does it believe that France and all of the EU members have to be united in order for sanctions to work?

MR. EARNEST:  Well, John, we have said many times that we believe that sanctions would be most effective when they are closely coordinated with our international partners.  That’s why you’ve seen intensive discussions between the President and individual leaders, particularly in Western Europe, about the sanctions regime that should be put in place to further isolate Russia.

So this has been a months-long endeavor.  And there have been important steps that have been taken by the United States in coordinating with our partners to impose economic costs on Russia.  There is ample evidence to indicate that the Russian economy has suffered as a result of those economic costs.  As it relates specifically to the proposed military transaction between the French and the Russians, we have in the past — I think the President was traveling in Brussels in June and he articulated some concerns about the sale of that military equipment to the Russians.

Again, this is a little bit of a common-sense thing.  We’ve seen ample evidence that the Russians are flouting international norms, supporting efforts to violate the territorial integrity of independent sovereign nations.  It seems like a suboptimal time, if you will, to be transferring advanced military systems to them.

So we’ve made our concerns known, and we will continue to work in close coordination with the British, the French, the Germans and others as we coordinate the effort to further isolate the Russian regime.

Q    You made concerns known to President Hollande? 

MR. EARNEST:  Yes, I believe that the President had the opportunity to say this both privately and publicly.

Olivier.

Q    Josh, I know how much you love getting ahead of  announcements.  This intelligence presentation — to whom, what’s the setting, who are the officials?  And I definitely did not get that impression from either the briefing yesterday or the background briefing we had either that you guys felt any sort of pressure or had any intent to lay out more of an intelligence case than you already had.  Obviously, I misread that.  But did anything change in the last 24 hours that made this decision necessary?

MR. EARNEST:  No, I don’t think that anything changed the calculus on that matter.  In terms of the logistics, I’d refer you to the Office of the Director of National Intelligence, because I think they’ll have some more information about this later today. 

But, look, we want to be as forthcoming as we can, understanding that there are important intelligence equities to protect, about the evidence of what exactly happened.  This is something that we would envision would be integrated with an ongoing forensic investigation at the crash site. 

I don’t want to leave you or anyone with the impression that somehow whenever an intelligence assessment is arrived at by the U.S. intelligence community some way supersedes the ongoing work that’s being performed on the ground.  That work is important.  That work will also give us important information about what exactly transpired in this tragic circumstance.  But we are working with the international community to try to make sure that international investigators have access to the site so that they can conduct that investigation while, at the same time, we’re going to do our best to present the information that we have already obtained or assessed about what exactly happened last week.

Q    Are you in a position to say whether that intelligence assessment has been shared with, say, the Dutch and the Malaysians and the Ukrainians?

MR. EARNEST:  I’m not in a position to talk about how that intelligence has been handled, but you can try to Office of the DNI and maybe they will be able to share some additional light on that.

Major.

Q    A couple things, Josh.  There are reports that the EU is going to oppose a new round of sanctions against Russia after consultations today.  Do you have any confirmation of that or any reaction to that?

MR. EARNEST:  I’m not in a position to confirm that.  I know that these talks have been ongoing and are headed into the evening hours over in Europe.  We certainly would welcome additional steps from the international community, principally our allies in Western Europe, that would impose additional economic costs in Russia.  We, for rather obvious reasons, think that those additional costs are justified.

Q    Is there a triggering mechanism if the EU goes ahead and does another round and the United States might then follow suit, or is the United States government content with where it is in its own sanctions application against Russia?

MR. EARNEST:  Well, “content” is not the word that I would use.  I think that we’re continuing to review the sanctions regime that’s in place, and we are going to continue to work with the international community to coordinate efforts to impose costs on Russia.  And our willingness to consider adding additional costs is something that continues to be a live option.

Q    You mentioned that there’s no practical effect of this federal appeals court ruling today.  Is there not a practical effect in that it creates an atmosphere of uncertainty?

MR. EARNEST:  That’s what I was trying to clear up.

Q    Well, for those who are in the health care industry itself who are trying to comply, implement, follow, and are trying to understand if they’re going to have patients who have subsidies or don’t, doesn’t that uncertainty itself have a practical effect as the law is implemented?

MR. EARNEST:  I don’t think it does for two reasons.  One is we feel very strong about the sound legal reasoning of the argument that the administration is making.  The second is there’s a clear, common-sense case to be made there, which is that the intent of Congress was to ensure that every eligible American who applied for tax credits to make their health insurance more affordable would have access to those tax credits whether or not the marketplace was operated by federal officials or state officials.  The intent here is pretty clear, and we feel confident about our case.

Q    Just to be safe, is the administration considering any legislative fix, if necessary, to clear up any ambiguity the court noted in the legislative language?

MR. EARNEST:  The President has said countless times that he’s willing to work with Democrats and Republicans in Congress to make improvements to the law.  But the prospects for that — considering that Republicans have voted more than 50 times to repeal the entire law, the prospects for the kind of legislative fix that might actually improve the law seem rather unlikely.

Q    We’ve asked you about the structured dialogue.  It sounds to me that there will now be a formal channel of communications that did not exist before between this administration and the Merkel administration on these issues of intelligence and anything else that might crop up.  But since the precipitating factor was intelligence, is that a fair understanding of this somewhat opaque language actually means?

MR. EARNEST:  I don’t know that I would necessarily describe it as a new channel, primarily because conversations between Lisa Monaco, for example, and her counterpart in Germany are not unprecedented.  There was a robust intelligence-sharing relationship that has existed between the United States and Germany for quite some time that even predated —

Q    You don’t send the Chief of Staff and the Chief Counterterrorism Advisor of the President to Berlin when everything is normal.

MR. EARNEST:  Well, I do think that the —

Q    You would agree with that?

MR. EARNEST:  Well, I would agree with your observation that published reports indicate that there were a number of things that needed to be discussed in those private channels between U.S. officials and our German counterparts.  We value the close and ongoing security cooperation and intelligence relationship that we have with the Germans.  As I mentioned before, that is a relationship that significantly benefits the American people.  It’s also a relationship that benefits the German people.  So it’s in the interest of both sides to ensure that those channels remain open.  They do.  That security cooperation relationship continues to function at a high level.

That said, if it is necessary for us to establish this structured dialogue to resolve some of the concerns that have been aired publicly, we’re willing to do that, and that is a testament to our desire to resolve these differences of opinion in a way that both satisfies the Germans, but also in a way that protects the private nature of the topic being discussed. 

Q    On the President’s trip this week, apart from the Kimmel show, could you address what many Americans believe is either the trivial or unnecessarily distracting obligation of Presidents, including this one, to raise money in the course of conducting important matters of state?

MR. EARNEST:  I think the critical standard that everyone — that I would suggest that people apply — I think people can apply whatever standard they’d like, but my suggested standard would be whether or not those political activities interfere with the President’s constitution responsibilities as the Commander-in-Chief of the United States of America.

I think what was demonstrated on Thursday, at least in the context of last Thursday’s schedule, that even in the midst of some urgent international matters, the President was able to attend to American interests around the globe while conducting the political functions that go along with the job. 

We anticipate that that will be the case this week.  That’s why there have been no changes to the schedule announced thus far.  But if we make some changes to the schedule, they will reflect the need for the President to be focused on — they will reflect the need for the President to rearrange that schedule to assure that he can fulfill his functions as Commander-in-Chief.  Right now, we don’t anticipate that a change in schedule will be necessary.

Q    Before I let you go, on behalf of the Correspondents Association, I just want to lodge a formal complaint about the Apollo 11 event today.  The astronauts, who are among the most visible, televised, national heroes this country has ever known, that entire program is financed by the American taxpayers — stills — a presentation of that limits television coverage of that event.  We believe that that is a classic definition of something that should have the broadest press coverage imaginable and we are therefore lodging a complaint against your decision to keep us out.

MR. EARNEST:  Understood.  I appreciate that.  These are legitimate American heroes — on that, you and I can agree.

Carol.

Q    Is there any concern in the White House that if the EU or the U.S. were to move forward on sanctions against Russia at this particular time that that would somehow complicate the effort to get President Putin to intervene with the separatists to get access to the crash site?

MR. EARNEST:  I think the hope right now, as the EU considers additional steps, in concert with the United States, to impose additional costs on Russia would actually be to compel President Putin to live up to his assertion that he will intervene with separatists to allow access to that site.  That would be part of that goal. 

I think there is a broader goal in mind beyond just that immediate priority, which is we do need to see Russia demonstrate some respect for Ukraine’s territorial integrity.  We do need Russia to stop supplying these heavy weapons to Russian-backed separatists.  We saw the tragic consequences of that ongoing effort to provide weapons last week and, put simply, we need Russia to acknowledge their commitment to basic international norms and to the idea that it is entirely possible, even normal, for the nation of Ukraine to have a strong, cooperative, even close relationship with their neighbor, Russia, while at the same time having productive economic ties with the West. 

Those two things are not mutually exclusive.  And if that is what the Ukrainian people desire — and there are strong indications that that is what they would like to see for their country — it is not appropriate for anybody, including the Russians, to interfere with the Ukrainians to make that kind of decision about the direction of their own country.

Q    Are there any plans for President Obama to personally make the case to Putin?

MR. EARNEST:  I don’t have any phone calls to read out at this point, but we’ll certainly keep you appraised of any —

Q    — any you anticipate?  I mean, all the other leaders have spoken with him since this happened.

MR. EARNEST:  I’m not aware right now of any scheduled telephone calls between President Putin and President Obama, but if that changes we’ll let you know.

Ed.

Q    Josh, on health care, I understand what you’re saying about the legal aspects, and it seems like conservatives are even acknowledging that the Affordable Care Act is likely to survive this.  But will you acknowledge that it could be a bit messier if 36 states don’t have these subsidies?

MR. EARNEST:  No.  What I believe and what this administration believes is that the legal basis for our case is strong and we have effective advocates at the Department of Justice who will be making that case before the D.C. circuit.  It is pretty clear even to those of us that don’t have a fancy legal degree that the intent of Congress was to ensure that every eligible American would have access to tax credits that would lower their health care costs.

Q    But legal experts are also citing various Supreme Court decisions, one written by Justice Scalia on the right, one written by Justice Kagan, who was nominated by this President, that take dim views of the idea of the government and government bureaucrats rewriting laws that don’t turn out as they expected. So given that’s out there as well, why are you so confident that your legal basis is sound?

MR. EARNEST:  Well, the other legal expert that I would cite is the district judge who ruled in this case who would anticipate that the government would implement the law in line with Congress’s intent.  And this judge — who ruled in this case at the district level, admittedly — did say that there is simply no evidence in the statute itself or the legislative history of any intent by Congress to support the claims that are made by the plaintiff.

So I guess to put it more simply, it’s the view of this administration, as agreed by this judge, that the way that we have implemented the Affordable Care Act to maximize the benefits for people all across the country — millions of Americans are benefitting from this right now — that that is cleanly in line with the easily understood intent of the United States Congress.

Q    I want to quickly voice my support for what Major was saying about access, but I will not belabor the point.  I do want to follow up on —

MR. EARNEST:  Duly noted.

Q    Thank you.  I want to follow, though, on his substantive question about the President’s schedule this week.  You gave kind of a clinical response that the functions of being Commander-in-Chief can be dealt with.  And I understand the presidency follows you whether you’re going to — this President goes to Martha’s Vineyard or the last President went to Crawford, Texas.  You can deal — you can have secure phone calls, et cetera.  What about the President’s time?  What about the fact that there’s five work days this week and three of them he’s fundraising?

MR. EARNEST:  Well, I will hazard a guess that a significant portion of the President’s time each of those days will be dedicated to participating in the presidential daily briefing, getting updates from his national security team about the situation on the ground, making phone calls to world leaders, consulting with his national security officials who are traveling across the world — whether it’s his Chief of Staff traveling to Germany, or his Secretary of State who is currently in Cairo right now. 

The fact of the matter is, the President, like most professionals, has the capability to deal with more than one priority at a time, and particularly, somebody who has the trappings of the presidency alongside him.  He’s got his own airplane.  He’s got dedicated phone lines.  He has senior advisors who will be accompanying him every step of the way to make sure that he has access to the information and technology necessary to represent American interests in the midst of these challenging international times.

Q    Right, and again, I understand he has all the trappings, but there’s no concern about the image that — yes, he can have these calls, but his schedule is basically dominated by fundraising this week. 

MR. EARNEST:  Maybe the public schedule that you see, but what you —

Q    What other meetings is he having that we’re not seeing?

MR. EARNEST:  What will be clear to you as the President goes through the next several days is that he will be paying all of the necessary attention to make sure that American interests are represented in each of these circumstances.  Again, he can do that through phone calls.  He can do that through conversations with staff either in Washington, around the globe, or traveling with him along the West Coast.  That will be the urgent priority.

And I guess this is the other important point.  If it becomes clear that there is something that the President is not able to do from the road that is critical to advancing American interests, we will alter the schedule to ensure that the President can fulfill those responsibilities.

Peter.

Q    Can I ask a question following up on the Apollo 11 anniversary, 45th anniversary this week?  We heard from a former NASA administrator this week who said given the fact that we now — the U.S. relies on Russian rockets to take our astronauts to the International Space Station, he said, we are in a “hostage situation.  Russia can decide that no more U.S. astronauts will launch to the ISS.  And that’s not a position that I want our nation to be in.”  Is that a position that our nation should be in?  And are there concerns given the new hostilities between the U.S. and Russia?

MR. EARNEST:  Well, Peter, as we’ve talked a number of times, the relationship between the United States and Russia is multifaceted.  We certainly do cooperate closely with the Russians when it comes to our space program.  But we’re also closely cooperating with the Russians when it comes to dealing with Iran in the context of the P5-plus-1 talks to resolve the international community’s concerns about the Iranian nuclear program.  We also are coordinating at a different level as it relates to the situation in Gaza and the Middle East. 

We have an important relationship with Russia.  The other example — I left out the best example.  We worked very closely with Russia to eliminate the declared chemical weapons stockpile from Syria just in the last month or so.  Currently those chemical weapons are being destroyed aboard a U.S. ship out at sea.  We have acted with the international community, including the Russians, who played an important role, to make sure that those chemical weapons couldn’t be used by the Assad regime and couldn’t be used by terrorists who were able to get their hands on those chemical weapons.  That made the world a safer place, and that is the direct result of close cooperation between the U.S. government and the Russian government.

What continues to be true, however, is that Russia does have important responsibilities as it relates to Ukraine to make sure that they’re adhering to broadly accepted international norms about the right of sovereign countries to make their own decisions about the future of their country.

Q    So simply put, you disagree with the assessment that we are in a “hostage situation” in terms of our ability to travel in space right now?

MR. EARNEST:  I think what I would say is that we have clear differences of opinion with the Russians about the way that they’ve handled — the way that they’ve conducted themselves when it comes to Ukraine.  But it doesn’t prevent us from accomplishing other priorities in cooperation with the Russians.

Q    There’s been a lot of international outrage associated with the giant disparity in terms of the number of casualties on the Israeli side versus the Palestinian side, given the crisis taking place in that country — the number approaching 600 or more on the Palestinian side; number just shy of 30, I think, largely Israeli soldiers, on the Israeli side.  The U.S. announced that it would provide more than $40 million in humanitarian aid to the Palestinians.  The U.S. provides I think it’s above $3 billion in aid annually to Israel.  Is there any concern in the disparity in the aid that the U.S. provides, especially given the fact that supporting Israel’s military efforts and at the same time supporting efforts to help those victims on the other side?  We’re on both sides of this.

MR. EARNEST:  Well, Peter, I think many people will agree that every single life that has been lost in this conflict, when it comes to innocent civilians, both Israeli and Palestinian, is a tragedy.  And our hearts go out to the families, the Israeli families and the Palestinian families, who have lost innocent loved ones in this terrible conflict. 

That’s why you have seen the Secretary of State travel to the region to try to get both sides to agree to the terms of a cease-fire that had previously been in place.  It’s why you’ve heard the President get on the phone with world leaders, including the Israeli Prime Minister, to try to bring this violence to an end.  It’s also why you’ve seen the commitment of U.S. resources to organizations on the Palestinian side to try to meet the basic humanitarian needs —

Q    But is $40-plus million enough to meet the humanitarian needs of the Palestinians?

MR. EARNEST:  It certainly is a start, and it will certainly make a difference.  But what will make the most difference is both sides coming together and agreeing to that cease-fire.  And this has to start with Hamas ending the barrage of rockets that they’re firing aimed squarely at Israeli civilians. 

I’ll also point out that those Israeli civilians are protected by an Iron Dome system that was developed and implemented in cooperation with U.S. officials to protect the lives of Israeli civilians.  So you are right to assess that there are a number of different ways where the United States has intervened to try to protect the lives and welfare of innocent civilians on both sides of this conflict, and trying to get both sides to agree to a cease-fire to reinstate the terms of the November 2012 cease-fire is a continuation of that effort.

Q    Finally, we’ve litigated largely the situation of the optics associated with fundraising on the West Coast this week, but the President does arrive in Washington State today for a pair of fundraisers.  It’s also a state that right now is dealing with the worst wildfire in that state’s history — 150-plus homes have been lost.  Has the President been involved in any conversations with the Governor of that state, Jay Inslee?  Does he have any intentions to make a last-minute trip out there to visit with some of those people who lost everything in the destruction?

MR. EARNEST:  I don’t have any updates to the President’s schedule to announce, but the President this morning did receive a briefing from his homeland security team about the latest on the wildfire situation that’s raging in Washington State and in some places in Western Canada as well.  When the President arrives in Washington, he will get an in-person briefing from the Governor about the response to those wildfires and to get an assessment about how local communities in Washington State are being affected by the wildfires.

I also want to point out that included in the supplemental appropriations request that this administration forwarded to Congress two or three weeks ago were additional sums of money dedicated to responding to wildfires throughout the American West.  Unfortunately, we have seen congressional Republicans indicate a willingness to obstruct that funding.  That is disappointing.  But we’re going to continue to keep pushing on Congress to make sure we have the resources that we can bring to bear to meet the needs of those communities that are affected by wildfires.

Roger.

Q    Thank you.  Back to Ukraine.  How much does the administration believe what happened with the separatists in Ukraine and the Malaysian plane is a reflection of Russia, and how much a reflection of the risks of untrained rebels having access to weapons?

MR. EARNEST:  Well, as I pointed out, Roger, there are some basic facts that we know about the situation on the ground in Ukraine.  We know that for months now heavy weapons have been moving across the border from Russia into Ukraine.  We know that the Russians have been training Russian-backed separatists in the use of those weapons, including anti-aircraft weapons.  We know that the separatists have claimed credit for shooting down three different aircraft in the last several weeks.  And we’ve seen the same social media reports that you have seen that indicate separatists did at one point on Thursday have possession of an SA-11 system that is capable of reaching aircraft that are flying at high altitudes.

We also know that it was a missile that was fired from the ground that downed the doomed Malaysian jetliner.  We know that that missile was fired from separatist-controlled territory.  And we know that the Ukrainian military was not operating anti-aircraft weapons in that area at that time.

So we have expressed our concern about these circumstances, specifically Russia’s willingness to provide heavy weapons to the separatists, on many, many occasions.  In fact, we explained that one of the reasons that the President had decided to put in place tougher sanctions against Russia last Wednesday, the day before the jetliner was downed, was because Russia continued to provide these heavy weapons to Russian-backed separatists.  That clearly has had dangerous consequences for the people of Ukraine.  Unfortunately, it has had tragic consequences for innocent civilians from countries around the world now. 

So we’re going to continue to compel the Russians to shut down the border and to stop providing heavy weapons and materiel to Russian-backed separatists in Ukraine.

Q    Is there any training going on that intel shows?

MR. EARNEST:  We have seen some evidence that the Russians actually are training Russian-backed separatists to use some of this equipment.

Q    Still training?

MR. EARNEST:  Well, I don’t have an up-to-date, up-to-the-minute assessment to provide you, but we know that that has happened with some frequency in the past.

Jon.

Q    Josh, back to the D.C. circuit court opinion.  I understand you believe you’ll win on appeal, but if this opinion is upheld, does it effectively gut Obamacare by eliminating up to 5 million subsidies?

MR. EARNEST:  Well, Jon, as you point out, there are millions of Americans across the country who do benefit in a very important way from the Affordable Care Act.  Millions of Americans are eligible for tax credits that make their health insurance more affordable for them.  That is one of the hallmark achievements of the Affordable Care Act, and it is clear that the intent of Congress was to make sure that every eligible American had access to those tax credits, whether or not the marketplace was operated by federal officials or by local state officials.  So we feel very confident in the legal case that we’ll make before the court, and the Department of Justice will be responsible for pressing that argument and we feel confident in the argument they’ll be making.

Q    Okay, but that didn’t answer my question.  I said if this decision is upheld — and you were just slapped down by a circuit court — if this decision is upheld, does it effectively gut Obamacare?  It means, for instance, that you can — the President can no longer say that people can have access to health care for the price of a cell phone bill.  I mean, this would wipe away 4.7 million right now — 4.7 million people’s subsidies.

MR. EARNEST:  Well, you and I agree with the fact that there are millions of Americans that currently benefit from this provision of the law.  And we are confident that that law has the kind of legal basis to withstand legal scrutiny.

Q    If it is upheld, does it gut Obamacare?  It’s a simple question.

MR. EARNEST:  Well, I know it’s a hypothetical question, though, and one I’m not in a position to entertain.  We feel confident in our legal case.  We’ve already won two cases at the district court level.  We’re going to the — the Justice Department will be pressing this case before the entire D.C. circuit, and we feel confident about the case that they’ll be making.

Q    The law very clearly states that the subsidies are available to those who enroll through state exchanges.  Does the letter of the law matter to the White House on this?  That is the letter of the law — it says state exchanges.

MR. EARNEST:  Again, I don’t have the fancy legal degree that I referred to earlier, but I do think that what the courts are charged with doing is evaluating the intent of Congress.  And the intent of Congress in this case I think is not just clear, it’s transparent.  Congress intended for every eligible American to have access to these tax credits that lower their health care costs, whether or not the marketplace was run by federal officials or state officials.

Q    Okay.  And I’d like to come back to Major’s point about the Apollo 11 representatives that were here at the White House today.  Why the intense secrecy around this event?  Why not allow television cameras into that?

MR. EARNEST:  It’s merely a scheduling matter, Jon.  There’s a number of things on the President’s schedule.  We’ve had the trip to the Dutch Embassy today.  The President is making remarks over in the EEOB with the Vice President to talk about job training.  And the President needs to get on a plane at one o’clock this afternoon.  So the President has a very busy schedule and we weren’t able to accommodate television cameras this time.

Q    Just for the record, the last pool spray took 38 seconds.

MR. EARNEST:  Understood.

Q    I mean, the President’s schedule — couldn’t he have been maybe five minutes later for the fundraiser out in Seattle? You really couldn’t accommodate a few minutes for open coverage of this?

MR. EARNEST:  Not this time, Jon.

Q    I mean, let me ask you, because I find that explanation, frankly, a little hard to believe, given that this is such a small amount of time to come in and have a little bit of —

MR. EARNEST:  Well, I’ll just say that in the past that there have been some television journalists who have complained about the small amount of time that was granted to some —

Q    Yes, and I think I’ve probably been one of those — complaining when 38 seconds maybe could be a couple of minutes.

MR. EARNEST:  Understood.

Q    But is it because some of those Apollo astronauts, including Neil Armstrong, shortly before he died, going to Congress, was very critical of this President for the way he has handled the space program.  I mean, the words of Neil Armstrong, who was a very private person, as you know, before Congress saying that the President’s canceling of the Constellation Program was “lamentably embarrassing and unacceptable.”  Is that why the President did not want to see television cameras into this photo op?

MR. EARNEST:  Absolutely not.  The President invited the crew members of Apollo 11 to the White House to honor their contribution to space exploration and to innovation in the field of science.  It’s a genuine honor for the President to have them here today, and he’s proud about the fact that they chose to come.

I will also say that we are proud of the policy that this President has put in place to take our space program to the next level and we’re very optimistic about the future of the American space program.

Q    You mentioned the supplemental before on the border crisis and wildfires.  Today the Speaker said that he believes that the supplemental is not going to pass unless changes are made to the 2008 law and that the President needs to push Democrats on the Hill to do that.  So I wanted to know what your response is to the Speaker.  But also is there anything that you can tell us about how the President is speaking to Democrats on the Hill about that issue?

MR. EARNEST:  Well, I can tell you that White House officials have been in regular touch with Democrats and Republicans about the importance of Congress acting to approve the supplemental appropriations request that this administration has sought.  The bottom line here is the federal government needs additional resources to make sure we are appropriately managing the urgent humanitarian situation at the border.

What we’re seeking specifically is funding for additional immigration judges, ICE prosecutors and asylum officials who can more efficiently and effectively process the claims that are made by those who have been apprehended at the border.  That enforcement of the law is something that we have prioritized and something that we need additional resources to do efficiently.

Q    But has the President spoken to the Democratic leaders on the Hill about it in recent days?

MR. EARNEST:  I don’t have any specific telephone conversations from the President to read out, but I can tell you that a number of White House officials have been in touch with their counterparts on Capitol Hill about this matter.

Q    Just real quick, a second — I think that some people in the White House have shot this down yesterday — just to get it out there.  Has the President or anyone on his behalf bought a house in California or planning to buy a house in California?

MR. EARNEST:  I’ve seen those reports, too.  Those reports are not accurate.

So, Mark, I’ll give you the last one.  I understand the President is about to speak.

Q    All right.  Josh, can you tell whether President Obama enjoys doing fundraisers, or does he regard them as a distasteful chore?

MR. EARNEST:  Mark, I can tell you that the President enjoys traveling all across the country and meeting Americans from all walks of life and talking to them about the country that they love and that he loves.  The President will have the opportunity to meet over the course of this trip to the West Coast, if the schedule holds, a variety of individuals and the President is looking forward to the opportunity that he’ll have to visit with them.

In terms of fundraising, it’s a responsibility that Presidents in both parties for generations have been responsible for.  And the President, like his predecessors, is interested in supporting members of his party who are on the ballot in 2014 and that’s part of what he’ll be doing over the course of this week.

Thanks, everybody.

Q    Josh, it’s 100 days for the Nigerian girls since they went missing.  Any comment?

MR. EARNEST:  Not from here, but we may be able to follow up on that.

END  
12:08 P.M. EDT

Presidential Nomination Sent to the Senate

The White House
Office of the Press Secretary

For Immediate Release
July 23, 2014

NOMINATION SENT TO THE SENATE ON JULY 22, 2014:
Jonodev Osceola Chaudhuri, of Arizona, to be Chairman of the National Indian Gaming Commission for the term of thre…

Data Cockpit Voice Recorder MH17 Downloaded

THE HAGUE, The Netherlands, July 24, 2014 /PRNewswire/ — On Tuesday 22 July 2014 at 22:00 in Kiev, Ukraine, the flight data and cockpit voice recorders  (the ‘black boxes’) from the Malaysian Airlines flight 17 were taken into custody by the…