TAPPER: A year ago the president said that he thought Wall Street bankers would forego Christmas bonuses. Largely, they did not. In January, he called those bonuses "shameful." In March, he met with a bunch of bankers, some of the same ones, and they came out and said some of the same things: "We were glad to have this discussion. We're going to look at some of the things the president said." Since then, the president has made it very clear that he's not happy with the way things are going, that the loans are not happening. You just said, "We're going to take the bankers at their word." Why would you take them at their word?
GIBBS: Well, I can only take it, what they said. What the president's going to do is continue to ensure that we're making progress. I — I think the president would say if you look at what is happening with — again, I don't want to speak broadly for every banker. But I think if you look at — I think the president would say that when an institution decides to forego a cash bonus in lieu of increased long-term equity in the company that doesn't vest for a four-year period of time, that that was precisely the type of solution that he was talking about earlier this year; that if we take the short-term — the short-term cash out of this system that can be much more closely rigged toward risk and instead say, "Your compensation should be — should be attached to the long-term health and growth of your company, which is good for you and taxpayers," that that represents the type of progress that the president would like to see.
Again, I think the bankers all acknowledged that they have work to do on this issue. The president reiterated that and discussed again that it wasn't — as I said earlier, it wasn't just the — it's not just the structure. It is also the amount. I think they all — they all should be cognizant of that.
TAPPER: At what point should the American people hold the president responsible for the fact that the banks are not doing what the president is telling them to do?
GIBBS: Well again, I want to be clear that the president — the president doesn't want to run a bank. The president believes that the American people took some extraordinary steps to ensure their financial stability and ultimately the larger economy's financial stability.
The president will simply — will hear what he — will listen to what he hears in these meetings. And he said at the beginning he wanted to listen more than he wanted to talk. And I think that was largely the case. He opened the meeting up with about a 15-minutes that I walked you through.
I think we'll continue to evaluate the progress that we make, whether it is taking a second look at these loans, whether it's making a specific recommendation to increase by $5 billion loans to small and medium-sized business, to take compensation issues seriously.
And, quite frankly, most — maybe most importantly, the House passed on Friday a very important financial reform bill out of the House, which now goes to the Senate. The president and his team strongly believe that there are aspects that are crucial to ensuring the type of fiasco that we had happen in September of 2008 never happens again. If — if, as the president heard around that table today, they're broadly supportive of financial reform, I think the president was pretty clear with them that that needs to be communicated from their lobbyists to the broader Senate so that we can get something done and to ensure that that never happens again.
TAPPER: Let's take that housing program that the president unveiled in Mesa, Arizona, in February. He said it was going to help — there's one specific section of it, not the Fannie, Freddie part of it — was going to help 3 million to 4 million homes, and help these mortgage holders renegotiate or refinance. About 760,000 Americans have applied and the banks have given — like, 31,000, roughly, Americans are enrolled in it (on a permanent basis). Thirty-one thousand when the president had his goal of 3 million to 4 million. Now, we talked to some of the bankers out there and…
GIBBS: Let me get some updated statistics. I'm not entirely sure that those are — that's the number of people taking place in modifications.
TAPPER: Well, I'm right. So in any case, moving on, the bankers — I got them (the numbers) from (deputy White House press secretary Jen) Psaki, so…
TAPPER: The bankers said that the problem with the program is the paperwork. There's too much paperwork.
GIBBS: And I — I — that — look, that came up in the meeting. That's why I said that there was an acknowledgement that we would — that president and his team would look at the paperwork requirements in streamlining these — these type of things. They mentioned specifically both housing modifications and SBA loans. The president — look, the president took notes throughout the meeting. And I can assure you that he'll discuss with his team — in the event that the housing modification program is being held back because of onerous paperwork requirements that we'll streamline those paperwork requirements.
TAPPER: Do you think that's what it is and not the fact that the banks don't want to loan?
GIBBS: Well, again, I don't want to speak broadly for all the banks. I know the president's position is it is far more preferable to keep somebody in a house and to figure out the best way for them to ultimately meet through a modification their mortgage and their loan requirements that — that is far preferable in any economic situation. Quite frankly, it's more beneficial for banks to have somebody paying that loan than to have a house that they can't put anybody in. Again, we will work with anybody in terms of streamlining the number — the paperwork requirements if there are those that believe that's the onerous — the onerous part of this program. Again, the president was very clear. And that's — again, housing was one of the main things that he wanted to discuss. Obviously, there are some banks in there that don't do mortgages, but certainly there were some in there that do.
TAPPER: I guess I just wonder if there are — if there are citizens watching this, and they see the president for the last year say he's going to give stern talk, going to give tough talk to bankers; meanwhile, taxpayers are giving them hundreds of billions of dollars and nothing changes. This — the housing modification program is only helping 31,000 Americans, not the 3 to 4 million. What do you say to Americans who say this just seems like Kabuki theater? This is just –
GIBBS: Well, I would say that the — that the president didn't have this meeting on accident. The president is as frustrated as the American people are. Think you heard — I don't know if you guys use video from other networks; I think the tone and the tenor of his remarks in the interview that we taped last week and that was broadcast yesterday night — last evening — was pretty clear. I don't think the president minced words. I think the president is serious and frustrated on behalf of the American people that — as we have all said, that taxpayers ensured the financial stability of many of the people that were in that room and that we should expect that those banks do the same in being part of a positive economic recovery that helps people stay in their homes, which loosens credit for medium and small businesses, which addresses egregious executive-comp issues. And again, maybe the most pressing legislative issue doesn't stand in the way of very important financial regulatory reform. Again, they all said that. The president was clear. If that's what you believe, it should be communicated from those that represent your interest on Capitol Hill.