    [Public Papers of the Presidents of the United States: William J. Clinton (1993, Book I)]
    [May 10, 1993]
    [Pages 610-614]
    [From the U.S. Government Publishing Office www.gpo.gov]

    Question-and-Answer Session With the Cleveland City Club
    May 10, 1993

    Homosexuals in the Military

        Q. Mr. President, based on the congressional hearings so far, how do
    you expect to resolve the issue of gays in the military this July?
        The President. I can only tell you what I think should be done and
    what my guess is will be done. And I'm glad you asked this question.
        Let me say one thing by way of background. The difference between my
    position and that of many people in the military, including most folks
    in the military, is over a very narrow category of people, actually.
    That is, in the last few months, the armed services have, on their own
    initiative after meeting with me, stopped asking people when they join
    up whether they are homosexual or not. That is not being asked anymore.
    For many years that question was not asked. It only started being asked
    in the relatively recent past. That will solve most of the problems.
        I do not propose any changes in the code of military conduct. None.
    Zero. I do not believe that anything should be done in terms of behavior
    that would undermine unit cohesion or morale. Nothing.
        Here is what this whole debate is about. It is about whether someone
    should be able to acknowledge, if asked or otherwise, homosexuality and
    do nothing else, do nothing to violate the code of military conduct and
    not be kicked out of the service. And my position is yes. Others say no.
    Others say if you let someone acknowledge it, it amounts to legitimizing
    a lifestyle or putting it on a par with--I don't see it as that. I just
    believe that there ought to be a presumption that people ought to be
    able to serve their country unless they do something wrong. But you need
    to know, that is it is not such a big difference. That is what we're
    arguing about. We're arguing not about any kind of conduct but about
    whether people can acknowledge that. Like that young man who was the 6th
    Army soldier of the year and who's now about to be mustered out because
    he acknowledged being homosexual.
        It is not about asking the American people to approve a lifestyle,
    to embrace it, to elevate it, anything else. The question is if you
    accept as a fact, as we now know and as the Pentagon has said, there
    have been many, many thousands of homosexuals serve our country and
    serve it well with distinction, should we stop asking? They say yes, and
    I say yes. So we solved most of the issues. They say yes, and I say yes.
        Should we change the code of conduct? They say no, and I say no, not
    at all, not on the base, not any way, no changes in the code of conduct.
    So the issue is over this: What will happen in this narrow category of
    cases? And that is what is still to be resolved. I hope my position will
    prevail. Frankly, I think most people believe as a practical matter,
    most people who have studied it, that the position I have taken can be
    worked out and is fairest to the good men and women who serve in the
    service who have done well. I think they're frankly worried about having
    that position look like they are embracing a lifestyle or legitimizing a
    lifestyle they don't agree with. And I keep saying, ``That's not what I
    think we're about.'' What I think we're about is acknowledging people's
    right to do right and to be judged by what they do. And that's sort of
    my position.

    Economic Program

        Q. Mr. President, as a resident of Ohio, what action can I take,
    what can I do to express my outrage at Senator Dole and his cohorts who
    block a legitimate vote like the stimulus

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    package?
        The President.  Let me make a constructive suggestion. I appreciate
    your sentiments, obviously, but let me make a constructive suggestion.
    What I think we need to do is to go on now and pass this budget and then
    just see where we are.
        Let me back up and say what I think happened in that deal. I believe
    that I won the debate with the American people that we needed more
    investments to create some jobs now, because this economy is not
    producing a lot of jobs. On the other hand, the Republicans said,
    ``Well, that's fine, but we ought to pay for it.''
        Well, I had announced this stimulus program as a part of this 5-year
    deficit-reduction program. So it had already been incorporated by the
    financial markets and everybody else who evaluated this. It was paid for
    in the sense that it was part of the program. But to pass it in time to
    get the summer jobs and some other things out, we had to, in effect,
    take it out of sequence, if you see what I mean, to put it up now so we
    can get the money out to create the jobs in 1993 before Congress could
    have actually acted on the budget of which it was but a small part.
        So what I think, to be constructive, what I think you should do is
    to do whatever you can to encourage the big budget to pass, long-term
    deficit reduction, and investment increases. Then let's watch this
    unemployment rate. And once we have proved that we have the discipline
    in Washington to cut spending and reduce the deficit, if we don't
    generate new jobs, if the economy doesn't pick up in terms of
    employment, then I think we can come back and look at that.
        Now, that doesn't solve a couple of the severe problems, like the
    summer jobs. We're still trying to assess where we are on that. But the
    larger question of creating jobs is something that I think that we need
    to recognize is primarily going to be dealt with by the big budget, the
    big issue. But if we need to come back, then I'll need you and all your
    folks, because we need to get ahead of the curve on this one. Because we
    were not trying to increase the deficit, this was part of a big, 5-year
    plan where we had to take it out of sequence because of the summer jobs
    issue and because we wanted a lot of these jobs created in 1993.
        Thank you for asking.

    National Service Program

        Q. What is your prognosis for the success of your proposed aid for
    college students who do public service?
        The President. Oh, I think it's got very great prospects of success.
    We've had wonderful bipartisan support; for several Republican
    Congressmen in the House of Representatives already asked to be
    cosponsors. We have at least two supporters, Republican supporters, in
    the Senate. And as far as I know, virtually every Democrat is for it.
        We've worked very hard to try to work out all of the objections, and
    I think it will be very helpful. We're going to move as quickly as
    possible. The national service part I think will fly through. The
    question of cutting down on the cost of the loan program will be more
    difficult, because many of the bankers and others who like the system as
    it is will oppose it. But it's unconscionable for us to lose $3 billion
    a year on loan defaults and $1 billion on transaction fees which could
    be put into direct loans which could then be collected. So there will be
    a lot of dispute about the loan issue. But I think the national service
    part of it will go through. It wouldn't hurt for you to express your
    support, though, to your Member of Congress.
        Thank you.

    Environmental Initiatives

        Q. Mr. President, what legislations do you hope to pass in order to
    help protect the environment while cutting the national deficit?
        The President. There are several things that we want to do. As you
    know, the Vice President and I have both worked very hard on this issue
    since we took office. I want to sign the biodiversity treaty, and I
    expect to do it, committing the United States to help preserve wildlife
    species. We want to be part of an international effort to preserve
    wildlife and plant life in the United States and in the rainforest,
    especially, around the world. We want to reduce the emissions of
    greenhouse gases in this country to 1990 levels over this coming decade,
    which I think we can do.
        And we want to invest some of the money that is coming from defense
    cutbacks into environmental technologies and environmental cleanup here
    at home, so that those technologies can produce American jobs, many of
    which can also lead in exporting. The biggest new commercial market in
    the world in the next 10 years

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    will be the market for various environmental technologies and services.
    It is a huge gold mine out there waiting to be tapped. When the
    countries met in Rio last year, regrettably the Germans and the Japanese
    were much ahead of the United States in total in environmental
    technology companies and services. But we have a lot of very successful
    ones here in the United States, and I hope we can galvanize more of
    them. If we do this right, cleaning up the environment won't cost us
    jobs, it'll save us jobs. It'll have a big positive impact.
        He asked a good question. Give him a hand. Isn't he good. [Applause]
    Thank you.

    Health Care Reform

        Q. Mr. President, perhaps this is a bit premature. But does your
    health care program incorporate a focus on wellness as well as merely
    curing illnesses? And what I mean by wellness is universal immunization,
    health examinations, and so forth. Or, perhaps Mrs. Clinton might answer
    that a little bit better. [Laughter]
        The President. Well, let me say that it will, and that if it were
    just up to the two of us, it would focus on wellness much more. You may
    know that, for example, there are a lot of countries, in France for
    example, where even working-class families get a family allowance when a
    woman is pregnant. You can only draw the family allowance if the mother
    can prove that she has followed a certain regime of maternal health
    designed to produce a healthy baby.
        I saw the other day in the paper that some Republican Congressman
    had suggested that we ought to do the same thing with immunizations, for
    people on public assistance having to immunize their kids. I thought
    that was a good idea. I think that we should have a big wellness
    prevention component of this. That's another point I wish I had made in
    my remarks. But we are exploring what our options are there.
        There will be every effort made to have a strong education and
    prevention and wellness component of this health care effort. And I
    might add that if we can have more clinics in chronically underserved
    areas and more health educators there, I think we can do that. That's
    one way you can save a ton of money in the system, and I think you must
    know that or you would not have asked the question.
        Thank you.

    Taxes

        Q. Mr. President, your administration has proposed two new taxes:
    first, a value-added tax in which goods would be taxed at each stage of
    production; secondly, an energy Btu tax in which coal, gas, oil, and
    other forms of energy would be taxed at each stage of use. Are not these
    taxes inflationary in that they compound at each stage? And secondly,
    they push up the consumer price index to which wages, prices, and Social
    Security and other entitlements are indexed to the consumer price index.
        The President. Well, first, let me say I have proposed a Btu tax,
    and I'd like to come back to that. I have not proposed a VAT tax. I have
    not. There have been a lot of rumors about it.
        It's interesting that you should know with whom a VAT tax is
    popular. Hillary's health care group, the First Lady's health care
    group, was asked to consider a VAT tax by an unusual coalition of big
    business and labor interests. Why? Because other countries have a VAT
    tax. Most other countries have a VAT tax of some kind, and we don't. And
    a value-added tax is one of the few ways that you can--somebody who
    advocated it now wants to get off of it. [Laughter] Anyway, a value-
    added tax is one of the few ways that you can avoid taxing your own
    exports and tax someone else's imports. That is, it is placed on things
    sold in your country. So when our competitors in Europe, for example,
    have a value-added tax, when they produce things for sale in the United
    States, it's not subject to the tax. When we sell our stuff over there,
    it's already carried the full burden of our taxes, and it gets hit with
    the VAT.
        So there are a lot of business and labor interests who believe that,
    conceptually, even if we lower some other tax, we should embrace the VAT
    tax because it helps us in international trade. I had never thought of
    it as an answer to the health care problem, because I thought it would
    aggravate the maldistribution of paying for the problem. It would
    allocate the burden of paying for the problem in ways that I didn't
    think were particularly fair. But that's what it is.
        Now, on the Btu tax, let me say that America taxes energy less than
    any other country. There were a lot of suggestions for how we might
    raise funds to reduce the deficit. The energy tax clearly is the thing
    which, for all kinds of

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    reasons, had the biggest impact on the financial markets.
        I was reluctant--there were people who said, ``Well, you ought to
    have a carbon tax. That's the most polluting.'' I thought that was
    unfair to the coal-producing States. Then there were people who said,
    ``Well, we have real low gas taxes.'' We do, but States also set gas
    taxes. ``We have real low gas taxes. You ought to have a gas tax.'' I
    thought that was unfair to the rural areas, particularly west of the
    Mississippi where they have much higher per-vehicle usage.
        The reason we decided to go with the Btu tax is that you can put it
    uniformly on all sources of energy so that it doesn't fall with
    incredible disproportion on any given sector. Now, the problem is that
    for the sectors that are especially energy-intensive, it hurts them more
    than a gas tax. And it hurts people who don't pay anything for their
    energy now. So farmers, for example, that had a fuel tax exemption are
    dealing with this burden. And you know, we've tried to come to grips
    with that. I don't think there is a perfect solution. But I like the Btu
    tax, because it promotes energy conservation, it's good for the
    environment, and it's fairer, I think, to every region than any other
    energy alternative that we could devise.
        Let me follow up on that. We tried to increase the earned-income tax
    credit--that is, the proposal--so that for people with earnings of
    $29,000 a year or less, $30,000 a year or less with families, the impact
    of the Btu tax would be offset by the increase they'd get in the tax cut
    under the earned-income tax credit.

    Economic Program

        Q. Good afternoon, Mr. President.
        The President. Good afternoon.
        Q. What I'd like to know is, first of all, your economic plan is
    twofold. It is to cut spending and, secondly, to encourage more
    Government spending in the private sector. Well, obviously there's a lot
    of support for the first part, cutting spending. What I'd like to know
    is, there seems to be a lack of enthusiasm for the second part. One is:
    How do you plan to get that through? Basically, how do you plan to
    garner more support for it? And, once you get your economic package
    through, how much input are just ordinary people going to have to this?
    And when will we feel it at our level?
        The President. Well, depending on whether you borrowed any money
    since November, you've already felt it. From the minute Secretary-
    designate of the Treasury said after the election, Lloyd Bentsen said we
    were going to attack the deficit and how we were going to do it and what
    was going to be in it, we began to have pretty steep drops in interest
    rates. So if you're paying any kind of interest payments, you've already
    felt it.
        The reason I was for the job stimulus program--to go back to the
    jobs program that the gentleman asked me in the back--is that I wanted
    to be able to lower the unemployment rate by another half a percentage
    point this year through an investment program, because all over the
    world, I will say again, all over the world--Europe's got a higher
    unemployment rate than we do. Japan has a much lower unemployment rate
    than we do because it's got a more closed economy, but they also are not
    creating jobs, and many of their firms are laying off for the first time
    in modern history. So I wanted to do that.
        So you will--let me just tick them off--you should be able--if we
    pass the budget, I think we will secure a healthier financial
    environment for the next year, and I think that will help everyone. If
    we can pass health care, I think, by next year people will begin to feel
    the impact of greater health security. If we can pass it--it's a big job
    and it's going to take a lot of work.
        The student loan program, if it passes, it will affect people
    immediately. People will be eligible who are now in college for it, as
    well as those who would wish to go, the same thing with the
    apprenticeship program. The welfare reform program should begin to have
    effect next year. Those are just some of the things that I think will
    actually touch people's lives and make a big difference.
        I think the trick on--to go back to the question the other gentleman
    asked--to getting people to support the targeted spending for education,
    training, and technology is to make sure that you lock the spending cuts
    in first before you do the taxes, and that overall, that the spending
    increases are small compared to the spending cuts, which they are, in
    our plan. So I think to me, that's the trick, and that's what I'm trying
    to achieve, and I hope you'll be with

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    me when we do it.
        Thank you.

    Note: The question-and-answer session began at 1:50 p.m. in the Statler
    Tower Building.