    [Public Papers of the Presidents of the United States: William J. Clinton (1993, Book I)]
    [July 30, 1993]
    [Pages 1238-1244]
    [From the U.S. Government Publishing Office www.gpo.gov]

    Interview With the Arizona Media
    July 30, 1993

        The President. Thank you for joining me by satellite. I'm glad to
    have the opportunity to speak with you and through you to the people of
    Arizona. I'd like to make a brief opening statement and then preserve as
    much time as possible for your questions.
        The Senate and the House conferees are nearing agreement on a budget
    program which preserves the essential principles that I began with in
    this whole endeavor back in February.
        First, it will reduce the deficit by about $500 billion with
    divisions equally between spending cuts and revenue increases.
        Secondly, it will restore fairness to the Tax Code by asking 70
    percent or more of the burden of the new revenues to be borne by people
    with incomes above $200,000, the top 1.2 percent of our country, the
    people who received most of the economic gains of the last 10 years and
    got a tax reduction during that period.
        Third, the burden on the middle class, people with incomes above
    $30,000 for family incomes, but less than $180,000, will be asked to pay
    a modest fuel tax, about 4.3 cents, which will be less than $50 a year
    on average for the average family.
        Fourth, for the first time ever, we will be able to say to working
    people with children that if they work 40 hours a week, if they play by
    the rules, they will not be taxed into poverty but lifted out of it
    because of a dramatic expansion in the earned-income tax credit. This is
    an essential downpayment on welfare reform, really rewards work and
    family, and it's very, very important.
        And finally, and perhaps most important of all, this plan brings
    down the deficit and keeps interest rates down and at the same time
    provides important new incentives for business investment and job growth
    and new incentive to invest in small businesses capitalized at $50
    million a year or less, very important to the high-tech community; a
    huge increase in the expensing provision for small businesses, meaning
    that 90 percent of the small businesses in America will actually be
    eligible for a tax reduction under this program if they reinvest in
    their businesses; third, an expansion of the research and development
    tax credit, very important to the growing economy; and fourth, something
    that will affect Arizona because you've got a lot of new people coming
    in there, some real incentives to revitalize homebuilding and real
    estate in ways that will generate a lot of a new jobs.
        So for all these reasons, I very much hope that this plan will pass.
    The more the American people know about it, the more they are likely to
    support it. Almost all of the opposition has been generated by false
    claims that this plan has no deficit reduction, no spending cuts, and
    too much of a tax burden on the middle class. All three of those things
    are wrong.
        And finally, let me say just one other point, because I've had this
    conversation with Senator DeConcini so often. There's a difference in
    this plan and the plan that passed in 1990, which didn't produce deficit
    reduction. First, we don't have unrealistic revenue forecasts. We have
    cold-blooded, hard facts in our projections that are agreed to by all
    the expert analysts. Secondly, all this money goes into a trust fund

    [[Page 1239]]

    and can only be spent for deficit reduction. Thirdly, under the House
    version of the bill, there is an actual enforcement mechanism so that if
    we miss our deficit reduction target in any of the next 5 years, the
    President would be legally bound to correct the miss on the target,
    because nobody can foresee the future with absolute precision, and the
    Congress legally bound to vote on it or vote on another proposal to do
    the same thing.
        So we have some protections here that have not been there before,
    that will bring this deficit down, revitalize our economy, and enable us
    to go on to the other crucial issues facing this country, including
    health care, welfare reform, the crime bill, the immigration issue, a
    lot of the other things we need to face. And I hope that your Members of
    Congress will support it. I thank Representative English for doing so
    the first time around. I'll be glad to answer your questions.

    Deficit Reduction

        Q. Mr. President, thank you very much for being with us by satellite
    this afternoon. And as we begin in the interest of fairness and full
    disclosure to the viewing audience and to the people listening on the
    radio, I think it's important to point out that the White House has
    imposed a ground rule here today that there will be no followup
    questions from reporters.
        That being said, Mr. President, it's clear that most Americans do
    want to see a deficit reduction here. The plan which is likely to come
    out of the Senate Conference Committee, maybe even yet today, is
    somewhat short of your $500-billion-dollar-over-5-year target. Arizona
    Senator Dennis DeConcini, whom you talked about just a moment ago, says
    that he can't vote for it when it comes up for a full Senate vote
    because there are, quote, no assurances that new taxes will be used for
    deficit reduction--[inaudible]--retire the debt. Those words were spoken
    by him this morning.
        Now, I understand what you just said, but obviously, he doesn't
    believe it's going to reduce the deficit far enough. What's your
    response to that?
        The President. I have a twofold response. First of all, they are
    arguing about the details. They are talking about a deficit reduction
    package somewhere in the range of $490 billion to $496 billion or $497
    billion; anything in that range would be 98 percent of where we are.
        Secondly, the taxes will not legally be able to be spent on anything
    other than deficit reduction. They will be put into a trust fund which
    must be spent on deficit reduction. They can't legally be spent on
    anything else.
        Now, Senator DeConcini wants a strong budget control mechanism to go
    into the plan. But as he pointed out to me, I supported his amendment,
    too, which is very much like the one we passed in the House. The only
    reason that the DeConcini amendment did not pass in the Senate is that
    all the Republicans voted against it because they don't want us to have
    good budgetary control. I don't know why; you'll have to ask them. But
    I'm going to have the strongest possible controls to guarantee that all
    the tax money goes to deficit reduction. If you put it into a trust fund
    and if we have to make annual corrections if we miss the targets, that's
    about as well as we can do, I think.

    Senior Citizens' Investments

        Q. Mr. President, the readers of my newspaper are nearly all senior
    citizens. They've seen the returns on their nest eggs decline
    considerably in recent years. Will your economic plan strengthen their
    investments, and if so, how?
        The President. I think it will strengthen their investments by
    promoting economic growth. A lot of senior citizens who have their
    investments in primarily interest-earning accounts have had earnings
    drop as interest rates have gone down. But that's one of the reasons
    that you've had in Arizona, for example, a big increase in homebuilding
    and more people working in construction.
        But I think what you will see over the long run is a very strong
    stock market, highly reliable bonds, and interest rates that will be
    lower as long as we can keep inflation low, but that will grow with the
    economy. And I think over the long run, what the senior citizens need is
    stable economic growth. They may have to balance their investment
    portfolios more between equities and plain bonds that depend on long-
    term interest rates. But I think all of us are helped over the long run
    if we can keep long-term interest rates down.

    Economic Program

        Q. Mr. President, why did you decide to do this in Arizona this
    afternoon? Is it because your tax plan is in trouble here? Is it because
    this morning Dennis DeConcini said again he

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    wouldn't vote for it and because the Republicans are busy running a
    bunch of radio ads encouraging Karan English to vote against it?
        The President. Well, it's because I think that I ought to answer
    these questions directly and because, frankly, the Republicans have
    willfully misrepresented the truth and the facts about this all over the
    country and especially in Arizona. I have been doing this, however, in
    many other States. You've actually--you helped to support the Republican
    rhetorical campaign by just what you said.
        This is not a tax plan. This is an economic plan. Fifty percent of
    the deficit reduction is in spending cuts. We're cutting the Federal
    work force by 150,000. We're cutting everything from agriculture and
    veterans benefits to all kinds of other programs, all across the board.
    We have asked the wealthiest 1.2 percent of the American people who got
    big tax cuts during trickle-down economics to pay over 70 percent of the
    tax burden. We've held families with incomes under $30,000 a year
    harmless. We have actually rewarded the working poor of whom there are
    many in Arizona with a change in the Tax Code so that they'll be lifted
    out of, not kept in, poverty by taxes. And we've got big incentives for
    small business investment.
        I will say this again: The Wall Street Journal has now run three
    articles in the last 2 weeks pointing out how a lot of these lobbying
    groups have willfully misrepresented the facts of this program to the
    small business community. Over 90 percent of the small businesses in the
    United States of America will be eligible for a tax reduction under this
    program if they reinvest in their businesses.
        And I think when people know the facts--Senator DeConcini pointed
    out to me in my conversation with him 2 days ago--he said it's really
    too bad that people don't know the facts. He said, ``This program had
    real support on February the 18th when you spoke to the Nation and went
    through the facts, point by point by point.'' And now the program is
    even better for average Americans than it was then. We've improved it.
    But all they've been told by the Republicans is, no deficit reduction,
    all taxes.
        Let me just point out one other thing for all the Republican ads
    that are being run. When this budget came up in the Senate Finance
    Committee and the Republicans, with all their talk about needing more
    budget cuts, were given their chance, the Republicans did not offer one
    nickel in budget cuts over the ones that I had already offered, not one
    red cent.
        When Senator Dole presented his plan in the United States Senate it
    was a joke, from people who thought we ought to have $500 billion of
    deficit reduction. He had $100 billion less than I did, and $66 billion
    of his spending cuts were, quote, unspecified, meaning, ``Trust me, I'll
    figure that out later. I don't want to make anybody else mad.''
        Now, if you look at my spending cuts, they're specific. There are
    200 of them. We've got a plan. All I want the people of Arizona to know
    is the truth. When they get the facts, they can make their own
    conclusions.

    Small Business

        Q. Mr. President, in the past week we've heard from several small
    business groups who say increasing taxes on the most successful small
    businesses, which according to figures are 4 percent, would hurt those
    who are providing all of the new jobs, especially here in Arizona. I
    want to know your response to that.
        The President. My response is that there are 700,000 small
    businesses that are organized and pay taxes under the Tax Code as
    individual taxpayers. Of that, 94 percent of them will have no income
    tax increase but will be eligible for a very big increase in their
    expensing provisions, which means they'll be eligible for a tax cut.
        I think for the top 6 percent to say they should have no
    responsibility in paying down the deficit is wrong. And for them to say
    they're the only ones creating new jobs is wrong. All of them, anybody
    that's that big has the option of converting to the regular corporate
    status, and regular corporations don't pay a tax increase in this until
    they have taxable income in excess of $10 million. But people who get
    the benefits that come from being taxed as individual taxpayers should
    be taxed as individual taxpayers. They also have options to reinvest in
    their businesses and get tax benefits down the road, I might add.

    Economic Program

        Q. Mr. President, in the past few weeks we've had interviews with Al
    Gore, with Bruce Babbitt, with David Wilhelm. All were sent out to
    Arizona or called on the telephone to talk about this program. And now
    today we're getting to speak with you. You seem to be expending a
    tremendous amount of political capital over this

    [[Page 1241]]

    program. I know you don't like to think about this, but I wonder, if the
    worst happens and this package loses, how big of a setback will it be
    for your administration?
        The President. It will be a big setback for America. Let me remind
    you--this is an interesting thing--that we had 67 business executives
    here in the White House a couple of days ago endorsing this plan. About
    half of them were Republicans. We had the heads of four energy companies
    here. Lod Cook, who was one of President Bush's cochairs in 1992, was
    here endorsing our economic program.
        This is not a partisan issue. Alan Greenspan, a Republican who is
    head of the Federal Reserve Board, has repeatedly said if we don't pass
    this deficit reduction plan, it means higher interest rates, a weaker
    economy, more uncertainty for America. What I'm trying to do is to cut
    through the incredible partisan fog that our adversaries have created
    and look at the facts. Republican business people who have looked at the
    facts are overwhelmingly supportive of this program. The Republican head
    of the Federal Reserve Board is supportive of this program.
        When I represented the United States in Tokyo recently and got an
    agreement from other countries to lower tariffs on our manufactured
    products which, if we can get everyone in the General Agreement on Trade
    to sign off on by the end of the year, will put hundreds of thousands of
    manufacturing jobs into America. I got that agreement because we were
    bringing down our deficit. It was the first time in 10 years the leaders
    of the other industrialized countries had not attacked America in their
    statement, instead, they complimented us.
        This has nothing to do with party or with me personally. Look, I
    want to get on to other things. I'll tell you what will happen if we
    don't do that. We'll spend 60 days or 90 days fooling around with this.
    You'll get less deficit reduction. You'll get higher interest rates. And
    the United States Congress will not go on to deal with health care,
    which every American has a stake in seeing resolved so that we can
    stabilize and make secure health care for all Americans and bring costs
    within inflation. We won't go on to welfare reform. We won't go on to
    the crime bill. We'll just sit here and flail around, and it'll be bad
    for America. I'll get up and go to work the next day, try to get the
    Congress to do its part. But I don't think that's going to happen. I
    don't think the United States Congress is going to let interest rates go
    up because of the fog of misinformation that's put out here. I think
    they're going to trust their people, go home and tell them the truth.
    And I'll tell you something else: I think the Republicans will begin to
    vote with us on other issues. You can already see it now on national
    service. We're going to pass the national service program I campaigned
    so hard on next week with broad, bipartisan support because people are
    tired of all this partisanship.
        Q. I'd like to go back to the question we talked about a moment ago,
    and that is why we're doing this. Half of our congressional delegation
    clearly will not vote for the plan, and three of the Democrats either
    will not or may not. I think we would all learn a little bit from the
    kind of personal interaction you're having with DeConcini, Coppersmith,
    and English to try to get them to be on your side.
        The President. Well, I've asked them all to vote for the program,
    and I've told them that I would do what I could to get the facts out.
    But let me say this: There are two categories of people who are holding
    out now and trying to make up their mind how to vote. There's one group
    of people who desperately believed that this program ought to pass, but
    they're simply afraid that they'll never be able to convince their own
    voters, because of all the sort of rhetoric that's come out of the
    Republicans, that it's good for them. That is, I don't know how many
    Members of Congress have said to me, ``This is a good deal for the
    people of my district. If they knew the facts, they would like the
    program. I don't know if I'll ever be able to get them the facts because
    of the dominance of the sort of `tax, tax, tax' attack on it.'' So I
    think for those folks, I have to get out there and give them the facts.
    That's what I'm trying to do here today with you.
        There are others who have certain specific objections that I have
    tried to meet. One of them is the objection that Senator DeConcini
    always raises, that we can't go back to 1990. If we have a deficit
    reduction package, the taxes have to go to reduce the debt, and we have
    to have an enforcement mechanism. And we have done that, and we will do
    that.
        Let me assure you: I'm doing this with a lot of other States, too,
    for the same reasons. I want to try to at least explain to people
    directly what the issues are and what the facts

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    are so they can make up their own minds. And I believe that, as
    President, I should be directly accountable not only to the people but
    also to press out in the country and not just depend upon whatever the
    nightly controversy is that dominates the evening news and the political
    press corps here to get the information out, to you. I think I owe you
    more than that, and I'm just trying to do my job.

    Manufacturing

        Q.  Mr. President, much of the economic projections we hear about
    have to do with growth in the services industry. And yet many of the
    economists tell us that America only moves its engine forward when
    industry prospers, when manufacturing is doing its thing. What plans do
    you have for rejuvenating and improving the manufacturing engine of the
    United States?
        The President. Good question. Let me mention, if I might, three
    things. First, let me compliment you on the question. I do think that
    services are important, but no great nation can give up its
    manufacturing base. I'm working on three things.
        First of all, in this economic program, there are plain incentives
    for manufacturers, tax incentives, to invest in new plant and equipment
    to be more competitive, or to start new businesses, especially in the
    high-tech area.
        Secondly, in the budget we are actually spending more on a couple of
    things. One of the most important things is more money on defense
    conversion to try to take advantage of the incredible skills of these
    companies that have lost their defense contracts but have the capacity
    to produce for the high-tech, nondefense economy of the world.
        The third thing we're trying to do is to find more markets for our
    manufactured products. The most important thing I did at Tokyo was to
    get these other countries to agree to drop their tariffs, in many cases
    eliminate their tariffs on everything from pharmaceuticals to
    electronics so that Americans can sell more abroad. And I might say that
    there is virtually no disagreement on this. Everybody agrees that if the
    big seven nations can get what we agreed to into a world trade agreement
    by the end of the year, it will bring hundreds of thousands of
    manufacturing jobs back to the United States. So those are the three
    things we're really trying to hammer.

    Economic Program

        Q.  Mr. President, given the job that the opponents of this economic
    package have done in selling it here in Arizona and elsewhere as a tax-
    and-spend plan, and we have two freshman Democrats who are sort of
    laying their careers on the line if they vote for this, what
    specifically can they tell their constituents, not in general terms but
    in very specific terms, what can they tell their constituents is in this
    package for them?
        The President. First of all, they can tell their constituents that
    almost every small business in their district will be eligible for a tax
    reduction if they invest more in their business.
        Secondly, they can tell their constituents that California is a
    growing State with a vibrant population where a lot of new businesses
    will be started. And this plan has dramatically increased incentives for
    getting capital for new businesses.
        Thirdly, they can tell their constituents who are working hard for
    limited wages that this plan holds them harmless if they're families
    with incomes of less than $30,000 a year, and actually if they're at a
    low income and still working full time, they'll get a tax break out of
    this. Those are personal, immediate benefits.
        And finally they can say that all of them will benefit from low
    interest rates. How many Arizonans have refinanced their homes since
    we've been able to bring interest rates down by taking on this deficit?
    How many more will be able to do it in the next few years or get a lower
    business loan or a lower car loan or a consumer loan or a college loan?
    These are personal, immediate, tangible benefits.
        The other thing they can say is that when they do pay taxes to the
    Federal Government, we won't have to spend so much of it paying interest
    on the debt. We can spend more of it investing in the future of Arizona
    and America. These are things that I hope your freshman Congressmen can
    say.
        But let me say that the opponents have a lot easier case. If you
    don't care what the facts are and you just want to say ``tax and
    spend,'' it's an easy task. But let me just point out, it was under
    Republican Presidents that the debt of this country went from $1
    trillion to $4 trillion. And you can look at the evidence. The Congress
    actually appropriated slightly less money than those Presidents asked
    them to spend over the last 12 years.

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        And a lot of the people that are raising all this cain now helped us
    to get in the fix we're in. I was a Governor during that period, and you
    look at my record. My State was always in the bottom five States in the
    country in the percentage of income going to State and local taxes. We
    never had to raise any money to pay off a debt. I don't like this. I
    hate the idea of raising taxes to reduce the deficit. But no one
    seriously believes that we can do what we need to do unless we reverse
    some of the things that happened during the trickle-down years of the
    eighties. I'm doing the best I can to take the tough decisions now to
    free up our economy as we move toward the 21st century. And I hope that
    Republicans, independents, and Democrats in Arizona who can think about
    that in terms of the future will be supportive.

    Health Care

        Q. Good afternoon, Mr. President. This question maybe is not related
    to the budget plan, but it's so important to the Hispanic community.
    Three days ago, you asked the Congress for $172 million in order to
    reinforce the immigration law and reduce the number of people that is
    coming illegally to this country. The majority of these people, Mr.
    President, are not criminals but working people. They are paying taxes.
    And they need medical care. My question, Mr. President, is, in your
    health care reform, is going to protect community health centers who
    right now treat illegal aliens here in Arizona? They are the only one.
    Are you going to protect these centers?
        The President. The final shape of the health care reform has not
    been decided. But I believe that the likelihood is that American
    citizens will be individually covered but that public health centers
    will also be funded and that people who come into their doors will be
    eligible for care. That's what I think will happen. I think that is the
    likelihood.
        I don't think you can see that sort of entitlement, the health care
    card that Americans might get otherwise, will go to illegal aliens. I
    think that is probably not going to happen. But I do think we will
    continue to fund public health facilities, and I think we must. I think
    that there are a lot of American citizens who would otherwise have no
    access to health care if we did not do so, particularly in urban areas
    that are quite poor or rural areas without access to other health care.

    Consumer Confidence

        Q. Mr. President, I guess I want to go back to something you said
    just a moment ago. You said no one believes that we can change things
    unless we reverse the policies of the eighties, to paraphrase what you
    said. But there's something I don't understand, and that is why most
    Americans or many Americans at least don't seem to agree that the
    consumer outlook, the economic outlook, is good. The consumer confidence
    level has dropped to its lowest point in 10 months this July. And more
    importantly as they look out over the next 6 months, consumers,
    according to most of the surveys, aren't very optimistic about the
    economy and things improving even with your economic plan.
        The President. I think there are--[inaudible]--reasons for that.
    First of all, keep in mind, America's economic difficulties that most
    Americans face--that is, most people are working harder for lower wages
    and not keeping up with inflation, while health care and education and
    housing costs have outstripped inflation--those trends have been in the
    making for 20 years and are a function of our inability to adjust as
    well as we should have over those 20 years to the new challenges of the
    global economy. Secondly, there was a great deal of optimism right after
    I was elected, but you can't expect results overnight. These forces have
    been in play for years and years. You can't turn them around overnight.
    Thirdly, most of these people have been given an enormous amount of
    misinformation about what is actually in the economic plan. And finally
    as I tried to say in response to a lot of the very good questions which
    have been asked, this economic plan alone is not the answer. It is an
    essential first step. We still have to have a more aggressive trade
    policy to sell our products. We've still got to reinvest in the skills
    of our people. We've still got to have a good defense conversion policy.
    We've cut all these defense workers out without reinvesting in their
    potential to contribute to the economy.
        So there are many other things we have to do. But once we do this, I
    think you'll see an upturn in confidence: We can move on the health
    care; we can move on the other job-creating policies; we can move on to
    welfare reform. And those things together will make a real difference in
    the economy and a real difference in the outlook for most Americans.
        But most folks in this country have had a

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    pretty tough time for 20 years now. And I want to turn it around, but it
    is not going to happen overnight. And we have to have the courage and
    the fortitude and the constancy to take on a whole lot of issues and not
    expect a silver bullet or an easy answer.
        Q. Mr. President, I wish we had more time, but thank you very much
    for being with us.
        The President. Thank you, sir--[inaudible]--and thank you, ladies
    and gentlemen.

    Note: The interview began at 4:44 p.m. The President spoke via satellite
    from Room 459 of the Old Executive Office Building. In his remarks, he
    referred to Lodwrick M. Cook, chairman and chief executive officer,
    ARCO, and David Wilhelm, chairman of the National Democratic Committee.