QUESTION: Thank you, sir.

Did any good come out of President Carter's talks with Hamas? And did anyone in your administration ask him not to do it? And will it have any impact on your trip to the Middle East?

BUSH: I didn't talk to him. And I don't know -- I don't know what the conversations were.

And I don't see Hamas changing. It's up to Hamas to change. And, you know, you get these meetings with these people, and they say one thing and do another.

And this is the way it's been now for seven and a half years in this administration, watching Hamas be a destabilizing influence.

And, you know, I supported the elections, by the way. And curiously enough, they won the elections against Fatah because they ran on a non-corruption campaign. The sad situation is now they've been given power, they haven't delivered for the people in Gaza.

And my mission is to -- when I go to the Middle East, is to continue to work with both Israelis and President Abbas and his government on a variety of fronts: one, coming up with a vision, helping them find a common ground on the vision; but also working with the Israelis and to empower the Palestinians in the West Bank to be more in charge of security, less obstacles with which to deal with, to help the Palestinians with economic vitality and growth. There are some very interesting initiatives that are being developed there.

Still hopeful we'll get an agreement by the end of my presidency.

Condi's heading back out there. I've been in touch with President Abbas here in the Oval Office. And I talked to Prime Minister Olmert.

And the attitude's good. People do understand the importance of getting a state defined. But Hamas is -- when you're Israel and you've got people lobbing rockets into your country, you're going to take care of business.

But you've got to ask, why is Hamas lobbing rockets? And one reason why is because they're trying to destabilize and create chaos and confusion.

And to answer whether or not people's conversations with them are effective, all we've got to do is watch to see how Hamas behaves.

QUESTION: Thank you, Mr. President.

Congress is preparing to add a couple of things to your supplemental spending request for Iraq. And I'm wondering, some of these seem like things you could support: extending unemployment benefits and, particularly, additional help for Iraq and Afghanistan war veterans in terms of educational benefits.

Are these things you might agree to, even though you have set a $108-billion ceiling on the package?

BUSH: Richard, $108 billion is $108 billion. And I made my position very clear to Congress, and I will not accept a supplemental over $108 billion or a supplemental that micro-manages the war, ties the hands of our commanders.

We will work with Congress and -- on these veterans benefits. I'm a firm believer that we ought to treat our veterans with respect. The State of the Union, I talked about the idea of transferring -- you know, a soldier being able to transfer educational benefits to spouse or children. We've sent legislation to that effect up to Congress. We would like for them to move on it quickly.

But the $108 billion's $108 billion.

QUESTION: Thank you, Mr. President.

I wonder if there's a big, urgent problem facing the country coming down the road that you worry your successor will neglect or postpone. That is, when the politics are done after the war on terror, what do you think should be at the top of the list of the person who moves into that office?

BUSH: I don't think John McCain is going to neglect the war on terror, and I do think he'll be the president.

Here I am interjecting myself in the '08 campaign, just like I told you I wouldn't. That's unfair, isn't it?

He -- it's very important for the president to understand that America's still in danger of attack and that we're dealing with an ideological struggle that can only be solved with the spread of liberty.

And a concern of mine, as you've heard me say, is that the nation has had the tendency in the past to become isolationist and correspondingly protectionist. And I would hope whoever the president is -- and I do believe it'll be John -- will be willing to resist the impulse, the temptation to say, Well, it's not worth it anymore to confront an enemy. You know, it's not worth it to try to do the hard work of helping democracies thrive and succeed.

Because not only is it worth it, we will succeed in, you know, laying the foundation for peace if we have faith in the capacity of liberty to be transformative.

I'm also concerned about protectionism. This lad right here asked me about Congress' intransigence on Colombia. I think it reflects the fact that there is a strong protectionist sentiment in the United States. People -- good people believe it is not in our interest to be opening up markets.

You might remember the CAFTA trade vote, we won by one vote, and it was a tough vote to get.

And now the speaker pulled, you know, a unique maneuver to stop the Colombia from moving forward.

And it -- it's a sign of -- that the country is losing its confidence to a certain extent -- a protectionist policy is better than, you know, confidently trading and treating on fairness in the marketplace.

And so, my worry -- not worry, my hope is that whoever the president is understands that America is a force for good in the world, that we're -- that in the spread of liberty we're adhering to a universal value. It's not an American value, it's a universal value the notion of liberty.

You've heard me say it a lot. I do believe it's a gift from the Almighty to every man, woman and child. If you believe in that and act on that, you're really acting on a platform of peace, because ultimately liberty yields the peace you want. It's transformative and powerful.

And I believe that people will be making a mistake if they say, you know, We can't compete economically and therefore let's throw up walls. And yet the tendencies here in America are pretty strong right now.

There's a lot of concern around the world, by the way, about America's retreat. They're wondering whether or not America's going to remain a leader. They're wondering whether or not -- you know, for example, will capital be welcome back into our country.

And so, it's the isms that bother me: isolationism and protectionism.

QUESTION: Thank you, Mr. President.

BUSH: Yeah, looking good in yellow.

QUESTION: Thank you.

BUSH: How's the baby?

QUESTION: She's good.

BUSH: Good, yes.

QUESTION: Thank you.

You're trying to get me off, but it's OK.

BUSH: No. Is it true you named her Georgia?

QUESTION: No. Is that OK with you?

BUSH: It's your baby.

QUESTION: Anyway, moving on to the subject of the day, I talked to James Clyburn before this press conference. He said, As a man thinketh, so are we. And Americans believe we are in a recession.

What will it take for you to say those words, that we are in a recession?

And also on Zimbabwe, what's the next step, and does South Africa play a part in that?

BUSH: Yes, thank you.

I've answered the question on the words and terminologies.

I will tell you that these are very difficult economic times. Very difficult. And we'll let the economists define it for what it is.

I would hope that those who worry about recession, slowdown, whatever you want to call it, make the tax cuts permanent as a way of helping to address this issue. Because if you're somebody out there trying to plan your future and you're worried about the future and you think your taxes are going to go up, it's going to cause different behavioral patterns.

Secondly, I do want to thank the members of Congress. And the man you talked to is a leader and did a very good job of helping shepherd through this, you know, billions of dollar package that is now beginning to hit America's pocketbooks, and we'll see how that goes.

I hope it's as stimulative as we think it will be.

But you can tell the good man you talked to -- he's a good guy -- that I fully understand that people are concerned, and they're concerned about high gasoline prices, they're worried about high food prices, they're worried about staying in their homes.

The new issue, of course, is student loans. The House of Representatives passed a bill that -- sponsored by Mr. Miller -- George Miller -- that is -- we think can do the job. I hope the Senate moves a version of it very quickly so that we can help address this issue.

I mean, one of the things that government can do is either create more anxiety or less. And if you think your taxes are going to go up, that's going to make you anxious.

If you think the government's going to step in with a good policy that'll help your child get a student loan, that'll make you less anxious.

One of the things we've done on homeownership is the Hope Now alliance, which, hopefully, makes people less anxious. Hopefully, it helps -- kind of brought some -- a sense of not only concern but action into the marketplace.

And I was told this morning that Hope Now has affected about 1.4 million homeowners and helped a lot of them refinance, get refinancing, or helped a lot of them get, you know, different interest payment schedules, all aiming to creditworthy people to be able to stay in their homes during this difficult period.

Zimbabwe. First of all, the will of the people need to be respected in Zimbabwe. And it is clear that they voted for change, as they should have, because the -- Mr. Mugabe has failed the country. This country that used to be an exporter of food is now -- got terrible human conditions there.

Secondly, the violence and the intimidation is simply unacceptable. The government is intent upon and is intimidating the people there.

We support the U.N. Security Council discussions that are going on. But the truth of the matter is, April, and you mentioned this, it's really incumbent upon the nations in the neighborhood to step up and lead and recognize that the will of the people must be respected and recognize that that will came about because they're tired of failed leadership.

I thank you all for your interest. Enjoyed it.