    [Public Papers of the Presidents of the United States: William J. Clinton (1993, Book I)]
    [July 29, 1993]
    [Pages 1227-1233]
    [From the U.S. Government Publishing Office www.gpo.gov]

    Interview With the Nevada Media
    July 29, 1993

        The President. It's nice to hear your voice. I want to thank all of
    you for participating in this radio press conference or town hall
    meeting or whatever we want to call it. I'm glad to have the chance to
    talk with you.
        Let me just say very briefly by way of summary, the Senate and the
    House are meeting today, trying to agree on a final version of the
    economic program which could then be presented for a vote next week.
    Obviously, I'm try-

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    ing to secure passage of the program. I believe it is very important. I
    want to emphasize, if I might, some of the major features.
        First, this is the largest program for deficit reduction in the
    history of the country, $500 billion. Of every $10 of deficit reduction,
    half of it is in spending cuts, very significant ones in nondefense as
    well as in defense, including 150,000-person reduction in the Federal
    work force and big cuts across the board in many other programs.
        Second thing I want to say is that of the $5 in new revenues, about
    80 percent of them come from the top 5 percent of the American work
    force. There are no income tax increases on couples with incomes below
    $180,000 a year.
        Third thing I want to say is that in addition to reducing the
    deficit and imposing a fair tax burden, this program does an awful lot
    to promote job growth. It holds families with incomes of under $30,000 a
    year harmless. It doubles the expensing provision of small business and
    makes over 90 percent of the small businesses in America eligible for a
    tax reduction if they invest more in their businesses. It has a very
    innovative capital gains tax for investment in small new companies that
    are capitalized at $50 million a year or less, which should benefit a
    fast-growing State like Nevada. It has any number of other very
    important things that could help the technology jobs in your State,
    including an extension of the research and development tax credit, as
    well as real initiatives to revive homebuilding and real estate which is
    why the National Home Builders and the National Realtors, two groups not
    normally associated with Democratic Party initiatives, have endorsed
    this program.
        Yesterday we had almost 70 business executives from all over the
    country, including 4 big energy company executives, about half of them
    Republican and of course the other half Democratic, endorsing the
    program and saying it was important because we had a 20-year low in
    interest rates, and we had to restore certainty to the economy, keep
    these interest rates down because we're bringing the deficit down, and
    get on with other business. We've got a health care issue to deal with,
    a crime bill to deal with, welfare reform to deal with, all these things
    that have to be done but can't be done until we first pass the economic
    plan.
        With that, I'll be glad to take as many questions as we can.

    Economic Program

        Q. Thank you, Mr. President, for allowing us this opportunity. Why
    have you had such a tough time selling your economic plan to not only
    Congress but to the American public?
        The President. I think until the last couple of weeks, the
    opposition did a better job than we did because they had a simpler job
    of selling it. We had some overtures to the Republicans, and especially
    in the Senate, before I even unveiled this program about whether there
    was a possibility of a real bipartisan effort to deal with this deficit.
    And we were basically told that if we were going to have any taxes on
    upper income people, they weren't interested. And they basically wanted
    to take it all out of Medicare and other things that we think there's a
    limit to how much you can cut. And we've cut Medicare as much or more
    than they have in the past but not as much as they wanted.
        So when you've got a program of spending cuts, tax increases that
    are overwhelmingly on the wealthy with an enormous number of economic
    incentives to grow, you'd think it would be quite popular. In fact, it
    is when people know the details of it. But what happened is, you had
    everybody from the Republican Senators to a lot of the House Members to
    Rush Limbaugh just trying to convince the American people that there
    were no spending cuts, no deficit reduction, and no taxes on anybody but
    the middle class. None of that was true. But it's a lot easier to bad-
    mouth something like that and just scream ``taxes'' than it is to deal
    with the specifics.
        Let me just give you one example. Just in the last couple of weeks,
    it's been very impressive to me that the Wall Street Journal, a
    newspaper that's not editorially on my side often, that their news
    columns have repeatedly shown how most small businesses benefit from
    this program, but most of them didn't know. Their communications job,
    those that are against us, was simpler than ours, and we've only begun
    to do what we should in the last couple of weeks.
        But the more people know about this, the more likely they are to
    support it. The details of the plan are friendly to support; it's all
    this rhetoric that's hurt us so bad.

    Taxes

        Q. Mr. President, I am here, and on behalf of our audience in
    northern Nevada, I would

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    like to thank you for this opportunity. We've had quite a lot of
    interest at our station today particularly in the subject of the cost of
    your economic program to our people here in northern Nevada. Mr.
    President, the deficit is something that most people cannot reach out
    and touch or feel, and yet taxes, whether we're talking income taxes, a
    gas tax, a value-added tax, those are very real to our people here in
    northern Nevada. Is there too much emphasis in your program on reducing
    the deficit through taxes and not enough on cutting the burden to the
    American people?
        The President. Well, let's talk about that. I think from the day I
    made it clear that we were going to bring down the deficit and then the
    Chairman of the Federal Reserve Board, a Republican, Alan Greenspan,
    came out and supported it, long-term interest rates began to drop. When
    the House passed my bill, they dropped some more. When the Senate passed
    my bill, they dropped some more.
        So here's why average people should be for bringing the deficit
    down. Number one, that's the way to keep long-term interest rates down.
    That means you can refinance your home or your business loan or take out
    a car loan, a consumer loan, or a college loan at lower interest rates.
    Millions and millions of Americans have refinanced their homes just in
    the last 5 or 6 months with these lower interest rates that are a direct
    result of our serious attempt to bring the deficit down. And if we pass
    the program, the interest rates will stay down until the economy really,
    really starts to boom again. That's good news.
        Here's another reason ordinary people should be for bringing the
    deficit down. We are spending more and more of taxpayers' money just to
    pay interest on the debt. In 1980 our debt was $1 trillion. By 1992 our
    debt was $4 trillion. Today every Nevadan puts 15 cents of every tax
    dollar to the Federal Government just to pay interest on the debt. That
    means middle class people are paying interest payments to upper income
    bond holders who hold that money, instead of using the money to educate
    their children or to build roads or otherwise develop the economy of
    Nevada.
        The third thing I would say is that this deficit has clearly made
    our economy weaker. It is one reason we cannot grow jobs and increase
    incomes. Now, Nevada has been the fastest growing State in the country
    for new jobs for the last 6 or 7 years. But even that cannot go on
    forever.
        Finally, let me say, let's talk about what this burden really is.
    Keep in mind that half of this deficit reduction is coming from spending
    cuts. Of the taxes which will be paid, basically, for a family of four
    with an income of $50,000 or $60,000 or what we're talking about today,
    the costs will be no more--and this is the outside--than $50 a year, or
    less than a dollar a week. For a family with income of under $30,000,
    they'll be held harmless. And the income tax increases only trigger on
    people whose taxes were lowered in the 1980's while middle class taxes
    went up, families in the upper 6 percent of the income earners. So I
    think it is a fair and balanced program.
        Q. Thank you, Mr. President.
        Q. Good afternoon, thank you.
        The President. Thanks.

    Senator Richard Bryan

        Q. Are you speaking to residents of the Silver State today mainly at
    an attempt to change Senator Richard Bryan's opposition to your deficit
    reduction plan?
        The President. Yes, but not only that, also to point out why Senator
    Reid and Congressman Bilbray voted for it. They've all been good friends
    of mine. And Senator Bryan has some very legitimate concerns which I've
    tried to address, and I think when this conference report comes out,
    that is, the final form comes out, the bill will be more to his liking.
        One of the things that Senator Bryan, himself, thought the Btu tax
    was a little better than the gas tax. He also felt very strongly that we
    ought to have more economic growth incentives in this bill than the
    Senate originally provided. And we're putting some of those growth
    incentives that I proposed in the beginning back in there: the new
    business capital gains tax, the incentives to rebuild the homebuilding
    industry in America, the incentives for industry to invest in new plant
    and equipment, doubling the expensing provision for small business, more
    incentives for research and development, the things that will cause
    business and individuals to invest to grow jobs. Dick Bryan said he
    thought that too much of that had been taken out when the Senate bill
    passed, and I agree with him. And I hope when we get this final bill out
    there he'll see it as a pro-jobs bill that will be good for Nevada, and
    then he'll feel

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    that he can vote for it.

    Job Creation

        Q. We seemed to be losing jobs nationally faster than they can be
    generated: last week Procter & Gamble, this week IBM, not to mention the
    jobs that have been lost through the cutback in the Sears catalog
    stores. How do you propose to reverse that process, and is there
    something specific that the private sector can do to help?
        The President. Yes, there are some specific things that the private
    sector can do, and let me make two comments, if I might, to the
    statement you made by way of introduction. Number one, every rich
    country in the world is now having trouble creating jobs, even when
    they're having economic growth. We've seen that in Germany. We've seen
    it in France. We've seen it in Japan. That's cold comfort for America,
    but our unemployment rate is actually lower than all those countries
    now, as tough as it is here.
        Number two, in our country and in all other advanced countries, big,
    big companies like IBM, Procter & Gamble, Sears are going through a
    process of restructuring where they're eliminating middle layers of
    management, getting rid of unprofitable businesses, and cutting down so
    they can be more flexible and so they can compete. That is very tough,
    and it's tough for our economy.
        So how are we going to generate more jobs? These are the things that
    have to be done. First of all, what can the private sector do? They can
    invest more, create more jobs here, and sell more products and services
    at home and abroad.
        What is the Government going to do to help them do that? The first
    thing I want to do is get the deficit down so we can keep interest rates
    down. The second thing I want to do is to change the Tax Code so that we
    favor investment for jobs, that we give people ways to lower their tax
    burden by investing to create jobs. The third thing I'm trying my heart
    out to do is to open new markets for our American products and services
    around the world. If we do those three things and we provide a better
    system for educating and training the work force, control health care
    costs, which is a big problem for a lot of these big companies--a lot of
    them are going into real trouble because they can't control health care
    costs--and then have a better system for developing our people's ability
    to work, reducing the welfare rolls, increasing the work rolls, training
    people better, those are the kinds of things that will change the future
    of this country. And that's what my economic plan is designed to do. The
    deficit reduction program and the jobs incentives, that's only the first
    step. We've still got to do these other things as well.

    Economic Program

        Q. Of all the things in the budget and the deficit reduction
    package, several of the things which seem to hurt Nevada the most--we're
    basically a service economy; we depend on tourists arriving here. We're
    not a manufacturing State; we're not really an agricultural State; we
    don't export a lot of things anywhere. And yet, the proposal for a
    nickel more a gallon on gas--the Btu tax may or may not be dead--all of
    those things would tend to drive down tourism, the very thing that
    Nevada thrives on. What is there in your program, since we're already
    the second fastest growing State job-wise and we have among the highest
    in new construction and what have you in our State--what is there
    specifically in your plan that will actually be of benefit and not of
    cost to the people of Nevada?
        The President. Well, first, let me make a comment about--there will
    not be a Btu tax. If it is an energy tax, it will only be the fuel tax.
    I think it will pass at a low enough level so that it will not burden
    travel any. Keep in mind that gasoline in America is the cheapest of any
    country in the world, and gasoline is now at its lowest price in 30
    years in America when you make adjustments for inflation. So we've got
    very low fuel costs, and we're proposing a very modest gas tax, not a
    big one.
        Secondly, there are a lot of things that are good for Nevada, are
    the incentives to revitalize the homebuilding and real estate--
    homebuilding's slow everywhere, just about--the incentives for all small
    businesses to invest more, to increase their profitability and their
    employment, which is a dramatic thing. We've qualified over 90 percent
    of the small businesses in this country for a tax break. And then the
    incentives for new high-tech industry and research and development and
    investment in new companies, that's very important, because among other
    things, we're trying to find alternative developments uses for the
    nuclear test site while we've

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    got this moratorium on nuclear testing. You've got a big sort of
    technology-based infrastructure up there because of the past nuclear
    tests, and the Governor's economic development task force is working
    with us now to determine whether there are alternative uses and projects
    and spinoffs. And this would help a great deal because it would make
    this kind of investment more attractive to more capital by giving tax
    incentives to attract it.
        So all those things are important. And in the end, I'll say every
    State in the country will have a more attractive, effective economy if
    the deficit stays down and we can keep interest rates down. Low interest
    rates for a sustained period of time will make available more money to
    more business people and lower cost in every State in America, and
    that's very, very important. That's a big issue in every State.
        We can take a few more questions if you like. Let me go back to the
    top.

    Federal Lands

        Q. Yes, sir. Mr. President. Do you see there being increases in
    grazing fees for public lands, and also on mining royalties?
        The President. I think the Congress will pass some increase on
    mining royalties with a bipartisan consensus that has some support from
    the West this year. I think they will be pretty modest and the subject
    of a lot of discussion. But it appears to me that they're going to pass
    a bill to do that.
        With regard to the grazing issue, Secretary Babbitt has visited
    Nevada as part of his western swing to talk to people about that. What
    we had hoped to do is to turn that whole issue into an environmental
    one, that is, to give ranchers incentives to continually restore the
    ranchland as a way of avoiding higher fees and also to make sure that
    any fees that were imposed were not economically crippling to the people
    involved.
        As you may know, if you've been reading the press back East, that we
    took a lot of criticism, Secretary Babbitt and I did, from a lot of
    legislators from places other than the West who wanted to mandate by law
    much, much higher grazing fees. And we took the position that the
    Secretary ought to go out West, ought to sit and visit with the ranchers
    and cattlemen and talk to them about what we could do to make sure we're
    being environmentally responsible with this Federal land and how we can
    use the grazing fee structure in a way that would encourage that. So
    that's where that issue is now.

    Energy Tax

        Q. A fuel tax increase will not only be felt at the gas pumps, sir,
    but in people's pocketbooks as well, in regard to the price of goods and
    services at the consumer level. Now, the Fed has indicated that interest
    rates will be raised if inflation starts to rise. How do you justify a
    double whammy or a double blow like that? How can that be good for the
    economy, sir?
        The President. Well, the Fed has basically indicated that they're
    going to raise interest rates if this deficit reduction package doesn't
    pass. Alan Greenspan has repeatedly told the Congress that the size of
    the Federal deficit and the accumulated Federal debt from the last 12
    years was the biggest threat to the health of the American economy. And
    he was up there just last week saying that if this plan is derailed and
    we don't, in fact, come up with a plan for just about $500 billion of
    deficit reduction, that in his view interest rates are going to go up,
    and that will cripple the economy.
        As I said, everybody we have talked to has suggested that this level
    of fuel tax increase will be very modest and have virtually no impact on
    the economies of the various States in the country. Virtually all States
    in America have raised fuel taxes more than this for their road programs
    over the last 10 years without adverse economic impact.
        Q. Early on in the proposition on the Btu tax, you mentioned that
    one of the reasons for such a tax was to provide an incentive for
    alternate energy sources. Now, Nevada has tremendous geothermal energy
    resources here that are being developed on a somewhat small scale.
    Without that Btu tax and that incentive, what kind of an incentive are
    you going to provide down the road for developing alternative energy
    such as geothermal?
        The President. We're going to have to come up with another approach.
    The reason I liked the Btu tax is that it promoted the development of
    American clean energy: natural gas, geothermal, methane, ethanol, solar
    energy, all kinds of things which would have led to big investments in
    the West particularly to try to develop the technologies. But there was
    so much misinformation and such an effective spe-

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    cial interest campaign carried out against the Btu tax that it was
    killed. We just had no way to save it.
        I will say this in response to the gas tax question: The fuel tax
    now being considered is a smaller amount per gallon than the Btu tax
    was. But Nevada would have gotten the benefit of having a greater
    economic incentive to develop geothermal and alternative sources of
    energy. I haven't given up on that, but I can't do everything in this
    bill. In order to get on to energy policy, control of health care costs,
    which is a huge economic issue for America, welfare reform, all these
    other issues, we've got to pass the economic plan first.

    Federal Employees

        Q. We hear again and again how we all must make sacrifices to bring
    the deficit under control. What about the salaries and benefits that
    Federal employees earn? Will they too be asked to sacrifice?
        The President. Absolutely. First of all, let me repeat again, I
    recommended, number one, that we reduce the Federal work force by now a
    figure that is now 150,000, and I think it will be bigger before we
    finish, that is, I have another report coming out on this next month;
    number two, that we freeze the pay of Federal employees of next year,
    and for the next 5 years we not give them the cost-of-living increases
    that they got all during the eighties, that we give them less than the
    total cost-of-living increase.
        I think you can make a compelling argument that Federal employees
    are making from a percentage point of view, the biggest contribution to
    deficit reduction of any single group in America. And by and large,
    interestingly enough, they've been pretty supportive of this. They've
    recognized it that they have jobs with the Federal Government, that
    we've got to downsize the Government, and that they need to show some
    restraint, if other Americans are going to be asked to pay $50 a year in
    a fuel tax, that they need to show some restraint on their pay. But if
    you look at the automatic cost-of-living increases they've been getting
    for the last 12 years, it will cost them a lot more than $50 a year,
    this program will, before we're done, and they'll pay a much bigger
    share. But I think that's right; the Government should make a bigger
    sacrifice than the taxpayers. I believe that they should, and I believe
    they are.

    Line-Item Veto

        Q. Our Senator Harry Reid recently had a small success in getting
    the 100-year-old Tea Tasting Board abolished and the funds for that. He
    proposes sunset legislation that would cut off funding for all programs
    after 10 years without a review, and President Bush and several others
    have proposed the line-item veto, something that the State Governors,
    many State Governors have. Why haven't we heard anything about that? It
    would seem to me and to many that it would be a way to cut a lot of pork
    out of the various national budgets.
        The President. I'm strongly in favor of it, and we have actually
    passed it through one House of the Congress already. A strict line-item
    veto would probably require a constitutional amendment. We had to modify
    it some to meet the requirements of the Federal Constitution, but we've
    passed a strong bill out of the House. It's in the Senate now. I think
    both Senator Reid and Senator Bryan support it, and I very much hope
    that we can pass it. If I had the line-item veto, I assure you that I
    would, myself, be able to deal with things like the Tea Tasting Board
    and some of the other subsidies.
        You know, Senator Bryan has proposed eliminating the mohair subsidy,
    which goes back to the Korean war, which was a pretty gutsy thing for
    him to do, but it passed the Senate last week. So both Harry Reid and
    Dick Bryan have been working on this cost-cutting in the Senate. I want
    the line-item veto very badly. I pushed it as hard as I could. We got it
    through the House, and I think that the Senate will pass it, but
    everything is on hold while they deal with the budget. But you're
    absolutely right, it ought to be passed.
        As far as the sunset review goes, we had such a law in my State, and
    we tried to use it. My own experience would indicate that the Government
    could eliminate an agency a year and never miss it. That's basically
    what we'd try to do. Every time our legislature met every 2 years, we'd
    just try to eliminate a government agency. We did it, oh, three or four
    or five times, and I never heard any complaint from the taxpayers if it
    was something we didn't need anymore.
        So I think there is more specific cutting that we can do, but I
    would remind you that next month the Vice President is going to reveal
    his report on reinventing Government, and we'll have a lot more
    recommendations for further

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    cuts in there.
        Let me take one last question--oh, they say I have to quit. I'm
    sorry. I'm having a good time, and I wish I could talk to you some more,
    but I've got to go to another meeting.
        Let me say how much I appreciate your giving me this opportunity to
    speak directly to the people of Nevada, and how much I hope that they
    will encourage their Senators and Congressman Bilbray to support this
    plan. It's clearly good for America. There is an enormous bipartisan
    support from people who know how badly this huge deficit has hurt our
    country and how much we need some more incentives in the Tax Code for
    people to invest where the new jobs are being created, in small
    businesses.
        We have done our best to ease the impact of this on middle class
    families and on any given State. Like Nevada, I live in a State with a
    high amount of gasoline usage. But the price of gasoline now, plus the
    relatively modest amount of the fuel tax, it seems to me is a small
    price to pay to get this Federal deficit under control and keep these
    interest rates down.
        So I hope you will support the plan. And we need it. And most
    importantly, I hope you will support the fact that your Senators and
    your Congressmen are up here in Washington really trying to honestly cut
    this budget and make some tough decisions, and I think they deserve
    support in that effort.
        Thank you very, very much.

    Note: The interview began at 4:43 p.m. The President spoke via satellite
    from the Roosevelt Room at the White House. A tape was not available for
    verification of the content of this interview.