    [Public Papers of the Presidents of the United States: William J. Clinton (1993, Book I)]
    [July 20, 1993]
    [Pages 1123-1129]
    [From the U.S. Government Publishing Office www.gpo.gov]

    Interview With the Wisconsin Media
    July 20, 1993

        The President. I'd like to make just a brief opening statement, and
    then I'll be happy to answer your questions. As you know, the designated
    committees from the Senate and the House are about to take up the
    conference process on the economic program I have presented to the
    Congress. I'd like to make a few comments about it and then answer your
    questions.
        I have just returned from a meeting of the world's seven large
    industrial nations in Tokyo. At that meeting, two significant decisions
    were made that could dramatically improve the economy of the United
    States in the years ahead and obviously will be very good for Wisconsin.
    The first decision was an agreement among the seven nations to lead an
    effort to dramatically reduce tariffs on manufactured goods across a
    whole range of services. It is estimated that if we can put this into a
    world trade agreement by the end of the year, it would add hundreds of
    thousands of jobs to the manufacturing economy in the United States over
    the next decade. The second agreement was an historic agreement with
    Japan in which, for the first time, the Japanese agreed to reduce their
    trade surplus with the United States and to be accountable in specific
    ways for reducing that trade surplus in specific areas. Again, that
    means more

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    jobs for Americans.
        Neither of these agreements would have been possible were it not for
    the progress we are making toward enacting the economic plan which
    reduces the deficit by $500 billion over the next 5 years. For 10 years
    American Presidents have gone to these meetings and been criticized
    because the United States would not assume any discipline over its
    budget. This is the first time leaders of other nations have
    complimented instead of criticized the United States. None of it would
    have happened had it not been for the Congress making progress on this
    plan.
        Now, there is a great deal of misinformation in the minds of many
    Americans about what is actually in this plan, thanks largely to the
    rhetorical attacks on the plan by its opponents, most of them in the
    other party. I'd just like to point out five critical facts about this
    plan which, to me, make it fair and good for the people of the United
    States and the people of Wisconsin.
        Number one, it has about $500 billion in deficit reduction locked in
    a trust fund so that over the next 5 years all the spending cuts and all
    the new taxes are saved for deficit reduction. It has a mechanism of
    enforcement so that if, because of economic developments, we miss the
    deficit reduction target in any given year, the President must come
    right back to the Congress and give adjusted suggestions for how to meet
    that target, and the Congress has to vote on them. The spending cuts
    have to equal or outweigh the tax increases. So that's the first thing,
    the $500 billion cut.
        Secondly, for the first time in more than a decade, the plan asks
    the wealthiest Americans to pay their fair share. Thanks to the changes
    which have been made in the last couple of weeks in the area of more
    spending cuts, I can now say to you that the plan which comes out will
    have at least 70 percent of the new taxes paid for by people with
    incomes above $200,000. That's about the top 1.2 percent of the American
    people.
        Thirdly, it is fair to working Americans, to the middle class. It
    asks people with incomes of between $30,000 and $180,000 in family
    incomes now to pay an energy tax which amounts to about $50 a year. That
    is about $1 a week for families of four with incomes in the $30,000 to
    $180,000 range. For working families with incomes below $30,000, there
    is no tax increase.
        Fourth, the plan really supports economic growth. And this is very
    important. And this will be a matter of contention between the Senate
    and the House because the House plan has more incentives for economic
    growth. But I think they are very important: a new business capital
    gains tax, an expensing provision for small businesses which will give--
    and I want to say this very clearly so everyone understands it--which
    will give over 90 percent of the small businesses in America a tax break
    under this bill, not a tax increase but a tax break if they invest more
    money in their business.
        And finally, the plan is fair to the elderly, to the middle class,
    to the working poor in contrast to the Republican alternatives which
    refuse to tax the wealthy but have less deficit reduction and take more
    out of the hides of people who are most vulnerable.
        So I hope we can get the facts out. I hope it will pass. I think it
    will make a big difference. I know it will make a difference in terms of
    seizing control of our economic destiny and promoting economic growth
    for the United States. And so I wanted to give you in Wisconsin and I'll
    be giving people from other States a chance to ask me questions directly
    about this and other issues of concern to the folks back home.

    Midwest Disaster Assistance

        Q. Good afternoon, Mr. President. Thank you for being with us this
    afternoon. As you know, flooding continues to be a problem here in
    Wisconsin and throughout the Midwest. Tens of thousands of people have
    suffered some very real damages. And we're wondering what assurance you
    can give those people that they'll be receiving some real assistance
    from the Federal Government, and what form might that take, sir?
        The President. Well, it will take several forms. First let me say
    that, as you know I think, I have made three trips to the Midwest since
    the flooding began and last Saturday met for about 2\1/2\ hours with the
    Governors of eight of the nine affected States, including Governor
    Thompson.
        We have asked, last night actually, for another substantial increase
    in flood relief aid. The package that we're asking for the Congress to
    adopt is now up to about $2.9 billion. And let me just run through some
    of the kinds of relief available.
        For individuals who have been thrown out

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    of work and who don't have enough money to live on--and there are many
    hundreds of them that are flooded out that badly in the Midwest--FEMA
    takes disaster applications and can provide cash funds for living
    expenses as well as emergency unemployment, even for self-employed
    people and other contractors who are not eligible for unemployment
    normally.
        Secondly, for small businesses, they are available for small
    business disaster loans, and the SBA is working now with FEMA to handle
    a lot of those applications even over the phone. Of course, the
    agriculture programs are, I think, quite well-known by the farmers, and
    they understand them. There are some operational problems with those
    agriculture programs based on the way they were handled, I think, after
    Hurricane Andrew that we're trying to work out.
        And finally, there will be some direct aid to communities who have
    been hurt, who have lost public facilities and roads and bridges and
    things of that kind. The Federal programs cannot and are not designed to
    absolutely make whole every loss from every individual business or
    community. But they will make a big difference. And I think that the
    general consensus is that our administration has been more aggressive
    and more coordinated and more prompt in dealing with this than has been
    the experience in the past. And we're going to continue to try to do
    that.

    Defense Cuts

        Q. Mr. President, I attended a make-believe budget-cutting public
    hearing Monday night in Madison in which some 80 Madison area citizens
    were asked to write their own Federal budget. Some of the trimmers
    favored President Bush's defense cuts because they dealt with some
    specific high-profile weapons: a cap on B-2 bombers, cancellation of the
    Seawolf submarine, and a new air defense system--forego a new air
    system. While your defense budget requests go far beyond the $97 billion
    that Mr. Bush recommended, I wonder if you could spell out some of the
    specific cuts that you propose to make in the defense budget.
        The President. Yes, sir, I can. First of all, we kept the B-2
    bombers at the level recommended last year, so that is something we did.
    The Seawolf program is phased out, and other weapons systems are scaled
    down, including Star Wars, rather dramatically. Over and above that, we
    plan to reduce the aggregate size of the armed services by about 200,000
    more than in the last Bush budget, and we asked the employees of the
    Department of Defense, both military and civilian, to take the same
    reductions in pay that other Federal employees are going to take.
        Those are the three areas which we make up the basic difference
    between the budget we presented and the last budget presented by
    President Bush. Let me say, we do not reduce our presence in Asia at
    this time, and I do not think we should because of the ongoing
    controversy we're having over North Korea and whether they're going to
    withdraw from the regime which commits them never to develop nuclear
    weapons. Until that is resolved, I think we have to maintain a strong
    presence in Asia. But otherwise, we're having substantial cuts in troop
    levels in Europe and some in the United States.

    Welfare Reform

        Q. I'd like to ask you about welfare reform. When you were in
    Milwaukee on June 1st, you made a passing favorable reference to the
    notion of eliminating welfare benefits after 2 years, limiting the time
    on welfare to 2 years. It was something you had talked about in the
    campaign last fall. Now Governor Thompson of Wisconsin, a Republican as
    you know, has suggested a pilot program of that sort in Wisconsin, and
    he has asked for waivers from your Department of Health and Human
    Services. I have a twofold question: Are you in favor of the waiver to
    start the Wisconsin pilot program, and as a concept, do you really,
    Federally or in Wisconsin, intend to kick people off welfare after 2
    years, even if they are able-bodied and refuse to work? If you do that,
    what happens to them?
        The President. Let me answer the second question first. Yes, I want
    to end welfare as we know it, and if people are able-bodied, able to
    work and there's a job available for them, and they refuse to work, I
    think they should live with the consequences. I don't think many people
    will refuse to work. The evidence is that most people on welfare, once
    their children are taken care of, are eager to go to work if they have
    the skills necessary to succeed in the work force.
        I want to back up in a minute and tell you the sequence of events
    that we intend to follow here to put us in a position to end welfare as
    we know it. But let me answer your specific

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    question now on the Wisconsin program. I talked with Governor Thompson
    about this briefly, not when I saw him on Saturday but the last time I
    saw him when I was in Wisconsin. And I urged him to put the plan
    together and get it through and send it to us. And I assured him that we
    would give it quick consideration. I can't commit to support something
    the details of which I have not reviewed, but in general I've been very
    favorable to pilot projects in the welfare reform and in the health care
    reform area.
        Now, let me back up very briefly and tell you what I think we have
    to do to end welfare as we know it, if I might. Number one, you've got
    to make work pay. That's one of the most important parts of this
    economic program. Under our economic program, we use something called
    the earned-income tax credit which basically is a tax credit which can
    even lead to a refund to people. If they work 40 hours a week and have
    children in the home, we don't believe people should live in poverty.
    This is a dramatic improvement in promoting work over welfare. So if the
    budget passes, you'll have a principle that has to be established: If
    you work 40 hours a week, you have children in the home, you won't be in
    poverty. Number two, we have to toughen child support enforcement
    dramatically. Wisconsin has done a lot of good work on that, and we're
    going to build on that and the work of other States to do that. Number
    three, we have to pass a health reform plan that guarantees that the
    children in this country will have health care. A lot of people don't
    leave welfare for work because they think their kids will lose their
    health care coverage. Number four, we've got to make sure we educate and
    train workers. And then, five, if we're going to call an end to welfare
    after 2 years, we have to know that there will be work available. So if
    there is not a private sector job we're going to have to offer work as
    an alternative to welfare. Those things will be done in order, and as
    they are done, we literally will change the whole focus of this social
    program from welfare to work, from dependence to independence.

    NAFTA

        Q. Mr. President, the North American Free Trade Agreement is on the
    minds of every union member. And Milwaukee has lost thousands of good-
    paying jobs to Mexico. Recently, the manufacturing policy project, which
    was funded by U.S. businesses, did a study that said Wisconsin can
    expect to lose 178,000 more manufacturing jobs. How do you reconcile
    these facts with your support of NAFTA, and what happens to these
    people?
        The President. Well, first of all, I just don't agree that NAFTA is
    going to cost us a lot of jobs if we do it right. Secondly, if we don't
    conclude the trade agreement, anybody who wants to move their
    manufacturing facility to Mexico to get lower wages can do it now. There
    is absolutely no restriction at this moment on moving a plant to Mexico.
    The purpose of NAFTA is to lower Mexican and United States tariffs--the
    Mexican tariffs are even higher--so we can sell more products to Mexico
    from the United States.
        And let me just make two points, if I might. Point number one, 5
    years ago we had a $500 billion trade deficit with Mexico. Now we have a
    $6 billion trade surplus because we have lowered tariffs. So that even
    though we've lost jobs in America, we've gained more jobs than we've
    lost because our trade has gone from a deficit to a surplus position.
    Secondly, people are going to find out, who want to go to Mexico just
    for low wages, that good transportation, well-trained and skilled
    workers, and high productivity are more important. General Motors just
    the other day announced that they were going to close a plant in Mexico
    and move it back to the United States and put 1,000 Americans to work
    because they weren't having the success they needed in Mexico. When I
    was Governor of Arkansas, we had one or two small plants--I can't
    remember whether it was one or two--close down and do the same thing,
    because they'd had an unsuccessful move.
        Now, there are some problems with this trade agreement which I am
    trying to fix right now through negotiations to get the Mexican
    Government to agree to higher labor standards, tougher environmental
    standards, and to work with us on dealing with these common problems,
    and a consequence if the standards they agree to are not observed. But
    my own view is that America has to have more exports in order to create
    more manufacturing jobs.
        As I said, if we make this deal with the world trading powers to
    lower tariffs all across the world on manufacturing products, it will
    create U.S. manufacturing jobs. So my opinion is if we don't have NAFTA,
    people who want to

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    chase low-wage jobs, will still move their jobs to Mexico, just like
    they're doing today. If we do have it, we'll create more jobs than we'll
    lose. And for those who lose their jobs, let me say, I do have a plan. I
    have a plan to improve education and training and community economic
    development, and that's a big part of this program. That's part of what
    I've been criticized for. While I have cut spending dramatically in some
    areas, I recommend spending more in education and training, on defense
    conversion and new technologies so we can deal with people who lose
    their jobs.

    Economic Program

        Q. Mr. President, thanks for making yourself available. As to why
    we're here, though, today, how worried are you about losing support in
    the Wisconsin congressional delegation for the deficit reduction package
    you're talking about? Is it Senator Kohl in the Senate, Representative
    Barca? Who are you trying to get us to jawbone, so to speak?
        The President. Well, you don't have to jawbone anybody. I want the
    people of Wisconsin to know directly from me what I think is good about
    this program and why I think it's important. And I think it's support
    that I owe to any Member of Congress that I would ask to vote for this.
        But let me just say, Senator Feingold has made it clear to me that
    he supports our objectives and in general that he is very supportive of
    the program. Senator Kohl has said he is generally supportive of the
    program, but is worried about the fuel tax at any level. And my view is
    that when you tell working families with incomes between $30,000 and
    $180,000 that you're asking them to pay $50 a year, but that 70 percent
    of this program will be paid for by people with incomes above $200,000
    and that over half the money will come from spending cuts, that folks
    will think it's fair and will want to make a contribution to bringing
    this terrible deficit down.

    Welfare Reform

        Q. Mr. President, if I could, I'd like to return just a moment to a
    question that was asked earlier and drive a little closer to the answer,
    perhaps.
        I had lunch today with a man from Milwaukee you've just hired to
    come into Washington to work with Donna Shalala. He has a lifetime of
    experience in community service work, and he said that he is concerned
    that in the process of welfare reform what's going to happen is 500,000
    or so people are going to drop off the bottom of the page because they
    are not going to have jobs no matter what happens at the end of 2 years,
    they are just going to be out there. And I suggested to him, well, maybe
    they'll turn to crime or maybe they'll just quietly starve to death. And
    he said, ``Well, I'll tell you they won't quietly starve to death.'' So
    just to reiterate a question asked earlier, what happens to those people
    who don't have jobs? You have said--if there aren't jobs for them, well,
    what happens to them then?
        The President. I think we have to provide community service type
    jobs if there are no private sector jobs available in order to justify
    cutting off the benefits. I don't think you can do it in any other way.
    You can't tell people they have to work if there are no jobs. Once they
    get into the work force, then if they lose their jobs and get them back,
    they'll be like other people, they'll have access to unemployment. But
    for people who have not been in the work force, I think there has to be
    some sort of access to community service jobs if the private sector jobs
    aren't there.

    Economic Program

        Q. Mr. President, many of our readers are the people you are
    addressing, the middle class. But a good number of them are what many
    people call upper middle class, and it's a group that is--it's just not
    fashionable right now in Washington, or maybe among this group here, to
    speak in any way in favor of them. But they tell us in letters to the
    editor, in stories to reporters, that they are very concerned about,
    well, taxes.
        Their point is this: They've put in the hours to get where they are
    now. They've worked the 70, 80, sometimes 90 hours a week. You
    understand those hours, sir. Why should they be singled out? And I don't
    know the ceiling you're putting on, your definition of upper middle
    class or wealthy. We're speaking about people who make maybe $90,000 to
    $100,000 combined, have a house, have a family, paying off the
    mortgages, paying off the cars and the bills and the property taxes
    which in this area are going up. Why should they be singled out after
    putting in those many hours for so many years to see it taken away so
    easily?

    [[Page 1128]]

        The President. First of all, if it's a family with a joint income of
    $100,000, they won't have an income tax increase. Under this plan they
    would pay the fuel tax, which will be about $50 a year for normal fuel
    usage for a family of four. The income taxes trigger in at adjusted
    gross income of roughly $180,000 per couple and about $40,000 less than
    that for individual. Taxable income is somewhat lower, but even taxable
    income for individuals is above $100,000 and about $140,000 per couple.
    But in terms of salary, net income, the way people think of their
    incomes, it's about $180,000 when the taxes trigger in.
        Why should they pay? A lot of those people work hard and got
    themselves to a point of success. We do not seek to punish success, we
    just seek to balance the scales. If you go back through the 1980's you
    will see that what happened in the eighties was that middle class
    incomes--that is, people with incomes from, let's say, $20,000 to
    $90,000 or $70,000--basically were stagnant, but their taxes were raised
    at the national, State, and local level. Upper income people, who got
    most of the gains of the 1980's, actually had their taxes lowered by the
    National Government.
        So I'm not trying to punish anybody, even people with incomes above
    $200,000 who will pay 70 percent of the cost of this program and
    virtually 100 percent of the income taxes. I'm not trying to punish
    them, I'm just trying to balance the scales to get a little back to
    where we were a few years ago when we were generating plenty of jobs and
    growing. No one seriously disputes the fact that a major cause of the
    Federal deficit being as big as it is, is that there was a huge cut in
    income taxes on upper income people, which has to be addressed if we're
    going to get this deficit down. Even then, I think those folks are
    entitled to know that there will be spending cuts at least equal to if
    not greater than the tax increases.
        Let me make one last point. Since we started working to bring the
    deficit down, long-term interest rates have dropped. Alan Greenspan, the
    Republican Chairman of the Federal Reserve Board, has acknowledged that
    the primary reason that long-term interest rates have dropped is the
    administration's serious attempt to cut the deficit. And many of these
    same people have refinanced their homes or their business loans or taken
    advantage of low-interest rates in ways that will give them more gains
    from lower interest rates than they will pay in higher taxes. And that's
    a very important point, I think, that has to be driven home.

    Presidential Leadership

        Q. Mr. President, rightly or wrongly, public opinion polls have
    suggested that a number of people see you as not being a strong leader.
    They also see your position on gays in the military as having been a bit
    of a compromise. Would you expect to continue to compromise on important
    issues in the future, or do you see yourself as becoming a stronger
    leader on those key issues?
        The President. Let me tell you, I regret those opinion polls. I
    think they have something to do, frankly, with the way you folks discuss
    these issues. Now, let me just run through this. I am the first
    President in a decade who has had his budget considered seriously by
    Congress. After Ronald Reagan's first budget, every budget that he and
    George Bush presented was laughed off as a political document. Seventy-
    five percent of the Republicans in the House of Representatives--the
    Republicans in the House of Representatives--voted against the last Bush
    budget. This one is being taken seriously. I am the first President in a
    decade that was complimented, not criticized, at the recent meeting of
    the world's great industrial countries, because we're doing something
    serious about our economy. I immediately organized the G-7 nations to
    support Boris Yeltsin when he was in the ropes last spring. That's not a
    sign of weakness. And we had a major role in the preservation of
    democracy in Russia. We passed the family leave bill, the motor voter
    bill through Congress quickly. We have three major pieces of political
    reform moving through Congress, already passed one House: campaign
    finance reform, lobby reform, and the line-item veto. I don't think that
    is a sign of weakness.
        When you live in a democratic society and you're elected President,
    you are not a dictator. The resolution we had on the gays in the
    military, which was worked out by Les Aspin from Wisconsin, was a slight
    compromise from my position in this way: If it were up to me alone, I
    would say that a person could acknowledge being gay openly, clearly, but
    say that he or she was completely conforming to the Military Code of
    Conduct and be able to serve. In this policy, if a person does that,
    that raises the presumption that the person intends to do

    [[Page 1129]]

    something that the Code of Conduct forbids. But then the service man or
    woman is given the opportunity to demonstrate that he or she will abide
    by the code. That's the rule. The second thing this policy does, which
    goes well beyond anything I discussed in the campaign, is to provide
    very explicit, explicit, protections for privacy and associational
    rights by service members without regard to their sexual orientation,
    going well beyond anything I ever discussed in the election.
        I am the first President who ever took on this issue. Is that a sign
    of weakness? It may be a sign of madness, sir, but it is not a sign of
    weakness. And I think that we need to get our heads on straight about
    what is strong and what is weak. When a President takes on tough issues,
    takes tough stands, tries to get things done in a democracy, you may not
    get 100 percent. Was I wrong to take 85? What would have happened if I
    had just put my campaign pledge into play? What would have happened? You
    know and I know and Les Aspin will tell you, the United States Congress
    would immediately have reversed it. So I would have the great good
    fortune of being able to say I'm ``Simon Pure,'' and the people in the
    military who are serving well and honorably who happen to be homosexual
    would not be one step further ahead than they were when I got elected.
    They're much better off today because we took an honorable compromise.
        That's what democracy is about. Read the United States Constitution.
    It's about honorable compromise. And that is not weakness if you're
    making progress.
        Q. Mr. President, thank you for answering questions from reporters
    from Wisconsin.
        The President. Thank you.

    Note: The President spoke at 5:05 p.m. via satellite from Room 459 of
    the Old Executive Office Building.