TAPPER: Given that the payroll tax goes to the Social Security trust fund, are you not concerned at all, A, that this will have an effect, possibly, on solvency of the Social Security trust fund? And also, B, why do this every year if what you’re calling for, the president’s calling for, the tax increase, will just be delayed until January 2013? Why not just do a whole structural change so you don’t have to have this same conversation every year?

ALAN KRUEGER, CHAIRMAN, COUNCIL OF ECONOMIC ADVISERS: Well, on your first question, I don’t think this jeopardizes the Social Security trust fund or the solvency of Social Security. The trust fund is made whole by general revenues. The Social Security chief actuary has stated that this does not affect the solvency of Social Security.

Moreover, the president proposed a way to pay for the extension and expansion of the payroll tax cut as well as the other components of the American Jobs Act. So over the 10-year period, the budget would be held neutral with respect to these cuts.

On the second question, looking at the pace of the recovery, looking at the threats that we face today, I think it’s critical that we extend the payroll tax cut and expand it. Down the road we expect that the economy will be stronger and that a natural process of recovery takes over, the –

TAPPER: By 2013, you expect?

KRUEGER: Let me just say that the, you know, recovery has been more sluggish than one might expect coming out of a recession because of the nature of the problems that created the crisis, because consumers built up so much debt that they’re working their way down because of problems in the housing market. We’re seeing the economy heal. It’s just not healing fast enough. So these measures would help to sustain the recovery, and down the road, such measures wouldn’t be necessary.

TAPPER: Could I just do a quick follow-up? I’m sorry. It seems the language that many in the White House and the administration are using about whether or not the payroll tax cut extension would be paid for is shifting a little bit in terms of how important it is that the pay- for is actually passed in combination with the extension. Would the president sign legislation that extended the payroll tax cut if it weren’t paid for?

KRUEGER: The president proposed a way to do this and a way to pay for it. The Senate Democrats came up with an alternative way to pay for it, which the president has said that he could support. I think both of those approaches are sensible approaches. And I think what we need to do is look for a way to extend the proposal – extend the tax cut, which makes economic sense.

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TAPPER: I’ve heard from a lot of Democrats in the last few weeks who are concerned about President Obama possibly granting an exemption to Catholic churches, hospitals and universities from the requirement that all insurance plans cover contraception. I’m wondering if you can shed any light on this decision. I know the president has not yet made a decision, but I think these Democrats, a lot of them in the abortion rights community, are concerned that this is even being discussed. Could you explain why the president is considering an exemption and what’s going into his decision-making?

CARNEY: Well, part of the process, Jake, as you know, was seeking and receiving public input before the guidelines that were announced by the secretary of Health and Human Services would go into effect. That process did result in public input, and as well as resulted in numerous comments from various folks who have concerns with this — about this issue.

The president has — this decision has not yet been made. You can be sure that we want — we want to strike the right balance between expanding coverage of preventive services and respecting religious beliefs. And that’s the balance that will be sought as this decision is made.

-Jake Tapper