SUSIE GHARIB (PBS): Umm, why the hesitation about the "R" word? Isn't it time to call it what it is?
DUYBA: Well, because, uhh, you know, there's a, there's a definition for the "R" word, and we hadn't reached the definition, and secondly, uhh, I am confident in the long-term growth of the country. Uhh, umm, I — if, if you want me to say we're in a tough patch, having a tough time, it's — bad, eh, you know, it's a, ta — times are rough — I'll say all those three, because that's the truth. And the key the American people have got to know is, raather than, you know, fretting, we moved, and we moved a very robust, pro-growth pa, ahh, package, uhh, that, uhh, will — you know, will start movin' money into the economy quickly. Uhh, by the second week of May, people start getting their rebate checks, plus we sent a signal to businesses large and small that there'll be additional incentives this year for you to invest, which — uhh, I think will lead to jobs.

Secondly, we're strengthening the defenses at our most important and vulnerable locations. In other words, part of a strategy is ta — to try to figure out where the enemy may attack. You assess your weaknesses, and you build on those — and you, and you, strengthen your weaknesses. That's the — remember, we're, this is a war. This isn't a — you know, maybe a, you know, a ketta, a law enforcement adventure. We're at war with these people, and therefore, during a time of war, you've got to do everything you can to strengthen your defenses. And so we'll continue to enhance protection at our borders and coastlines and airports and bridges and nukyular power pants.

And so the first question that anybody running for President gets: Is this a war? Or is this like law enforcement? Is it a — does this require full use of U.S. assets in order to protect the American people? As you know, I made the decision that it does require those assets. Secondly, that these are two very important fronts, both of which are important to the future of the country. And therefore, we got to succeed in both. Thirdly, one front right now is going better than the other, and that's Iraq, where we're succeeding, and our troops are coming home based upon success. And Afghanistan is a tough fight. It's a tough fight because, one, this is a state that had been just ravaged by previous wars, and there wasn't a lot of central government outreach to the people. Secondly, there is a tough enemy, and they're brutal, and they kill at the drop of a hat in order to affect behavior.

My only point to you is, is that we're in constant contact with people on the ground to help make sure that we save lives. Now that the water is beginning to recede, the question is, how do we help with the recovery? ...Secondly, what's going to happen in the long term to the homes? And so Michael is going to set up a housing task force similar to the kind we set up in California for the wildfires, to work with state and local authorities to have an orderly strategy to help people get back in their homes. ...Secondly, we're worried about farmers and ranchers. The country that's being affected by these floods has got a lot of farm country, a lot of people raising livestock. And the Secretary of Agriculture has briefed me on the conditions — and we're still assessing how widespread the damage is on the farmlands — and assures me that his team is in place to help farmers and ranchers with the federal aid available. And finally, Director Nussle is here from the Budget Office. We've got what we called a Disaster Relief Fund.

We've had seven years working together, a chance to have some pretty candid exchanges. And secondly — and this is his [Russian President Putin's] last — this will be our last face-to-face meeting as a presidency, and I'll thank him.

REPORTER: Beyond your concern that you stated here, and your expectations for these stimulus checks, what kind of hope can you offer to people who are in dire straits?
DUBYA: Permanent tax — keep the tax cuts permanent, for starters. There's a lot of economic uncertainty. You just said that. You just said the price of gasoline may be up to 4-dollars-a-gallon — or some expert told you that — and that creates a lot of uncertainty if you're out there wondering whether or not — you know, what your life is going to be like and you're looking at 4-dollars-a-gallon, that's uncertain. And when you couple with the idea that taxes may be going up in a couple of years, that's double uncertainty. And therefore one way to deal with uncertainty is for Congress to make the tax cuts permanent. Secondly, it's — people got to understand that our energy policy needs to be focused on a lot of things — one, renewables, which is fine, which I strongly support, as you know. Two, conservation. But we need to be finding more oil and gas at home if we're worried about becoming dependent on oil overseas. And this — I view it as a transitory period to new technologies that will change the way we live, but we haven't built a refinery in a long time. We're expanding refineries, but we haven't built a refinery in a long time. I strongly suggested to the Congress that we build refineries on old military bases, but, no, it didn't pass. But if you've got less supply of something, as demand continues to stay steady or grow, your price is going to go up. Secondly, on oil, we — the more oil we find at home, the better off we're going to be in terms of the short-run.

I would say it's like — as I explained to this fellow here — that one of the lessons of the genocide in Rwanda was to take some of the early warnings signs seriously. Secondly, a clear lesson I learned in the museum was that outside forces that tend to divide people up inside their country are unbelievably counterproductive. In other words, people came from other countries — I guess you'd call them colonialists — and they pitted one group of people against another. And an early warning sign was — and it's hard to have seen it, I readily admit, but I'm talking earlier than 1994, and earlier than the '90s — was the fact that it become a habit to divide people based upon — you know, in this case, whether they were Tutsi or Hutu, which eventually led to exploitation. Secondly, I would tell my successor that the United States can play a very constructive role.

One of the interesting tactical decisions that Russia has made that the United States supports is the notion that Iran has a sovereign right to have a civilian nukyular power program. What they don't have is our confidence that they should be able to enrich uranium so that those plants would work. Why? Because they had a covert weapons program that they did not declare and have yet to declare. Secondly, we understand that if they were to develop that weapons program it would be a real danger. And so the Russians said, well, would you support us on this notion — that because they're untrustworthy when it comes to the fuel cycle, we will provide the fuel and we will collect the spent fuel? And I have, publicly. I'll say it again — and we discussed this part of our strategy. Secondly, I explained to him the content of the NIE, what it meant and how our working together has been effective. And thirdly, we talked about ongoing efforts to come up with another U.N. Security Council resolution if the Iranian regime doesn't suspend.

REPORTER: Mr. President, tomorrow, August 31st, Malaysia celebrates its 50th —
DUBYA: Fiftieth. Make sure my congratulatory remarks get in your article. Headline, Bush congratulates Malaysia. Do you think that's what it will say?
REPORTER: Something like that.
DUBYA: Upbeat, optimistic George Bush —
REPORTER: War on terrorism.
DUBYA: Yes, sure.
REPORTER: It also marks the 50th [year of] relations between the U.S. and Malaysia —
DUBYA: Yes.
REPORTER: So what are your outlook and hopes for U.S.-Malaysia relations, and especially with Malaysia being the 10th largest trading partner?
DUBYA: First of all, I do believe we ought to have — take this notion of trade and have meaningful discussions with a potential free trade agreement with Malaysia. Secondly, I respect Prime Minister Badawi, admire his leadership. When his wife died I tried to call him early just to let him know I cared about him.
REPORTER: He has remarried.
DUBYA: Has he? Good. I'll congratulate him. Thanks for giving me that heads-up. Don't put that in the article that you had to tell me that. You can put it in there if you want. I'll be glad to — I'm going to congratulate him. That's neat.
[NATIONAL SECURITY COUNCIL AIDE] DENNIS WILDER: You did, sir.
DUBYA: What?
WILDER: You did congratulate him.
DUBYA: Exactly. I'm going to congratulate him again. I'll double the congratulations. That's right, I did write him a note. I forgot. Did I call him or write him a note?
WILDER: You wrote him a note.
DUBYA: That's right, yes. Sent him a couple flowers. Anyway, Malaysia is an interesting example of how a free society can deal with movements that could conceivably change and alter the nature of the free society.

Let me comment on the civilian casualties, if I might. First, I fully understand the angst, the agony and the sorrow that Afghan citizens feel when an innocent life is lost. I know that must cause grief in villages and heartbreak in homes. Secondly, I can assure the Afghan people, like I assured the President, that we do everything we can to protect the innocent; that our military operations are mindful that innocent life might be exposed to danger, and we adjust accordingly. Thirdly, it is the Taliban who surround themselves with innocent life as human shields. The Taliban are the cold-blooded killers. The Taliban are the murderers. The Taliban have no regard for human life. And therefore, we've spent some time talking about — as the President rightly expressed his concerns about civilian casualty. And I assured him that we share those concerns. Secondly, it's up to Iran to prove to the world that they're a stabilizing force as opposed to a destabilizing force. After all, this is a government that has proclaimed its desire to build a nuclear weapon. This is a government that is in defiance of international accord, a government that seems to be willing to thumb its nose at the international community and, at the same time, a government that denies its people a rightful place in the world and denies its people the ability to realize their full potential.