    [Public Papers of the Presidents of the United States: William J. Clinton (1993, Book I)]
    [July 28, 1993]
    [Pages 1215-1223]
    [From the U.S. Government Publishing Office www.gpo.gov]

    Interview With the Texas Media
    July 28, 1993

        The President. It's nice to see you all here. And I know you've all
    received other briefings today. And so I think that probably the best
    thing to do would be to start, and I'll answer your questions.

    Texas Senatorial Election

        Q. [Inaudible]--we are aware of the fact that did carry the State in
    the election last year. And more recently Texas rejected the Democratic-
    appointed Senator in what some people, such as Senator Gramm,
    characterized as repudiation of you and your policies. So to paraphrase
    Admiral Stockdale, why are we here?
        The President. [Inaudible]--several others who wanted to support it
    and felt that there had never been an adequate defense made in Texas. I
    thought, given the fact that I had two Texas opponents, I did rather
    well there in the last election. And I don't, with all respect, I don't
    think the Senate race in Texas was a referendum on our program, because
    nobody defended it; nobody said what was in it.
        There have been four special elections in the Congress: three in the
    House, one in the Senate. The Democrats won all three in the House. But
    frankly, only one of those races was a referendum on the program,
    because it was the only place where the Democrat on his own initiative
    defended the program--without my even knowing it, put my picture in his
    brochures, ran television ads explaining to the people what was in the
    program. And he won the race by nine points in a district in which a lot
    of upper income people live who would have to pay the higher taxes.
        So you can't have a referendum on a program if the people don't know
    what's in it. If anything, if I've made any mistake in this, it is that
    this is the only issue in my lifetime where the people knew less about
    it as time went on. That is, on February the 18th when I spoke to the
    country, I actually went through chapter and verse factually all the
    things that were in this program and how they fit with what we wanted to
    do in health care, welfare reform, the crime bill, all the things that
    are coming afterward. But I said who was going to pay the taxes, what
    the spending cuts were going to be.
        After that, because there was no fight over the spending cuts,
    people were not told there were any, and the rhetoric against the
    program took over. So I think I owe it to the people of Texas to at
    least put my case out there. And I certainly owe it to the Members from
    Texas who supported the program because they think it's the right thing.

    Taxes

        Q. [Inaudible]--Corpus Christi. It's a community that's just now
    coming out of recession, and they're doing it, probably they're
    diversifying. What can you say to reassure folks who have been hearing
    about this gasoline tax, people who are in the tourism industry who
    depend on people driving to come see us and our attractions, people who
    in the refinery industry who are dependent on--and the people, the
    trucking industry, agricultural and so forth? What can you say to them
    that will put them at ease about what may be coming out of this
    conference committee?

    [[Page 1216]]

        The President. I don't think the conference committee is going to
    adopt anything in the range of a dime, nine cents, eight cents, anything
    like that. I think, first of all, gasoline is at its lowest real price
    adjusted for inflation in more than three decades. I think that any tax
    they put on it will be modest and will amount to no more than $50 a year
    for a family of four with an income of $50,000 a year, about $1 a week
    to help to pay down the deficit. All the money will be put in a trust
    fund and can only be spent to reduce the deficit.
        And I think that it is a bearable burden. It was not, as you know,
    my first choice. We had a compromise Btu plan that was never really
    considered that exempted agriculture, exempted all production, and
    broadened the base of the tax to even it out a little. But I think that
    this is something that we can clearly manage given the fact that
    gasoline is at it's lowest real price in 30 years.
        Q. [Inaudible]
        The President. Well, I told you what it will amount to. It can
    amount to about a dollar a week for a middle income family, a family
    with an income of $40,000 to $50,000 a year. I don't think that will be
    a significant burden.
        And in terms of the energy industry, we had people from three energy
    companies here today, ARCO, Sun Oil, and Citgo, as well as the CEO of
    Tenneco here supporting the plan because they believe that bringing the
    deficit down, keeping interest rates down, which the deficit reduction
    plan is doing, enabling people to refinance their homes and business
    loans, and stabilizing the economy will do far more good than this will
    do harm. And I believe that, too.

    Super Collider

        Q. I know you support the SSC, but about a week and a half ago, you
    strongly criticized Senator Gramm and Senator Hutchinson for calling for
    spending cuts while the House vote was going on. I think yesterday
    Senator Gramm sent you a letter urging you to pick up the pace of your
    support for the SSC. Can you get together with them and keep this
    project----
        The President. I'm a strong supporter of that project. And I worked
    it in the House. But, you know, the timing was amazing. I mean, I
    couldn't believe that they would walk out on the steps of the Capitol
    with Ross Perot and begged the Congress to cut spending more and rail
    against taxes and give people the impression that there was some huge
    middle class tax burden in this thing, which is false. After the Senate
    Finance Committee had met and the Republicans offered not one single
    specific spending cut in the Senate Finance Committee--not one, not one
    dollar--and then, they go out on the steps of the Capitol, while we're
    doing our best not to get beat too bad in the House, hoping we can do
    what we did last time, pass it in the Senate and save it in the
    conference.
        You know, this is tough. I mean, you've got all those Congressmen
    from California. They took 40-something percent of the base-closing cuts
    this time, a State with second highest unemployment rate in the country.
    They take 40-something percent. Their Congressmen line up and vote for
    this program to benefit Texans with lower interest rates and a more
    stable economy. You know, and they say, ``Here's a State with a space
    station. Here's a State with all the benefits from the super collider.''
    All they want to do is gain the political benefits of all this Federal
    spending and the political benefits of railing against the taxes and not
    have to take responsibility for proposing specific spending cuts. And
    it's just a little too much to swallow. You've got to put yourself in
    the position of people from other States. And so, they said, ``Let's
    just lob them one.'' And so we lost by this breathtaking margin, far
    worse than we lost last year.
        And then, of course, they want to disclaim any responsibility for
    that. I don't blame them, but I'm telling you--put yourself in the--
    suppose you were from Idaho or Utah, or someplace that had hardly any of
    this stuff. Nobody's writing you Federal checks every month. You don't
    have hundreds of scientists and engineers and high-tech employees. It's
    just difficult for these Members that I'm lobbying to take.
        We came very close to losing the space station in the House. And two
    supporters of mine who were in a group that had already come against the
    space station stood down there in the well and waited until the last
    votes, and they realized that it could not prevail unless they changed
    their votes, and so they went down and voted for it.
        And that's how we saved the space station in the House. So, all I'm
    saying is, I believe in the super collider, and I believe in the space
    station. I believe we have now saved the space station, and I feel very
    good about it. And now I can sort of gin up my efforts on the super

    [[Page 1217]]

    collider. We've got to pass it in the Senate to have any hope of getting
    it out of conference. All I can tell you is, you have to put yourself in
    the position of people from other States who have been asked to take the
    tough votes, take the hits, who've already voted for $250 billion of
    spending cuts, and then they're told by people who stand on the steps of
    the Capitol they hadn't cut spending. It just was difficult for them.
    And I thought it was kind of an interesting irony that at least they
    could have waited a day to do it, you know. They could have had the good
    grace to wait instead of just rubbing the Congress' face in their
    rhetoric.

    Media Coverage

        Q. Why not talk about the economy if learning about the economy and
    learning about the problems with the economy and how deficit reduction
    can help the economy? Why not talk to the whole country about the
    economy, rather than each State individually?
        The President. Well, I intend to do that also. But one of the
    problems is that, as those of you who are in this town know, what really
    makes news is controversy. I mean, the President can't just go talk to
    the country whenever he pleases. Last time I talked to the country, this
    program had good support because I was able to give out all the
    information. Since then, it's just been rhetoric, 10-second sound bites,
    taxes, or ``it's spending, stupid,'' or something like that. And the
    whole facts don't get out.
        So one of the things I can do to reach the whole country is to spend
    more time with media from many States. We're doing this with a lot of
    States. I will, I hope, have the chance to address the country again.
    But I tried to do this in a national press conference, and only CNN and
    one network covered it. And by the way, the research showed that the
    people who saw it on the network that covered it had their attitudes
    markedly altered about the economic plan. So I'm doing the best I can to
    get information out.

    NAFTA

        Q. [Inaudible]--Corpus Christi. But we live in an area, because
    we're so close to the border that if things go sour in the U.S., we get
    hit; and if things happen in Mexico we feel it also. So we're looking at
    the North American Free Trade Agreement. Can you bring us up to date on
    that one?
        The President. Yes. We're making good progress on our efforts to
    achieve agreements relating to the environment and labor standards. The
    last reports I have are quite good. And I think that when those
    agreements are finalized and announced that we will really diminish at
    least the fervor of some of the opposition to NAFTA. We're also making
    good progress in getting a broad base of support for it. And I still
    believe we can go forward with it and pass it this year. There is an
    awful lot of opposition to it in the House and some in the Senate. You
    may have seen recently that some Congressmen were asking me virtually to
    delay consideration indefinitely. But we have to take it up this year.
    And I expect to do that.
        And I think the more we talk about it--I think the important thing
    with NAFTA is to try to--as I believe with a lot of these things, by the
    way. And because NAFTA will have bipartisan support and bipartisan
    opposition, we may be able, funny enough, to have a calmer conversation.
    We may be able to talk to each other as if we're all in the family.
        I mean, one of the things that I tell people about NAFTA, is I was
    Governor of a State where people shut their plants down and moved it to
    Mexico. I know a lot about that. But the point--if we have no NAFTA, as
    you well know, that will continue or could continue. NAFTA is not about
    stopping that or accelerating that. That is virtually irrelevant to what
    we're trying to achieve. And I think it's quite important.
        So we're making good progress. I expect to go forward. I have high
    hopes. We've got a lot of opposition, but I think if we can really be
    calm and talk each other through it, we can make it.

    Deputy Counsel Vincent Foster, Jr.

        Q. We've heard conflicting stories about--this is on another
    subject. On the telephone call that you made to Mr. Foster, we heard at
    one point it was made on Sunday, then we heard it was made on Monday.
    And we heard, oh, it was just a routine call, because you talk all the
    time. And then we heard it was to buck him up. Can you sort of set the
    record straight?
        The President. I called him Monday night because at the last
    minute--Hillary was gone, was still in Arkansas with our daughter. And I
    decided to watch a movie, and Webb Hubbell was still hanging around
    here. And I hadn't seen Vince in a while, and I called him. I didn't--

    [[Page 1218]]

    unlike some other people, who did know that he'd been quite distressed,
    I was not really aware of that. But I knew I hadn't seen him in a while,
    and I just kind of got lonesome. Webb Hubbell and I and one or two other
    people were going to watch a movie. So I just wanted to watch the movie.
    I called him and we talked for, I don't know, 20 minutes or so. We
    talked about what he'd done the weekend before, talked about some things
    he was concerned about on the job, but it was just the sort of thing
    we'd always talk about. He was real work-oriented. And we agreed to meet
    on Wednesday. And that was it.

    House Budget Language

        Q. There has been a difference between the House and Senate on
    capping entitlement programs. What is your position on that?
        The President. You mean because the House version has stronger
    language in it?
        Q. Right.
        The President. Well, I'm glad you asked that. Now, here's something
    you all can help on. The House version, first of all, has some
    disciplined language in there with dealing with the entitlements and
    also has some language which says that--well, first let me say, we adopt
    5-year budgets around here. I think you know--all of you, or the groups
    that you work for--it's very hard to adopt a 5-year budget with
    exactitude. I mean, nobody can see the 5 years with absolute precision.
        So what this House bill does that had never been done before is not
    only to put all this money in a trust fund so it can't be spent on
    anything else but to say if we miss the target in any year, in any of
    these areas--you know, the targets on discretionary spending,
    entitlements, or revenues--whatever reason, we don't make our deficit
    reduction target, under this bill, the President must propose a plan to
    correct it, to meet the target, and the Congress must vote on it. Now,
    the Congress, obviously, wouldn't have to do exactly what I wanted. They
    could amend it, you know, but at least there's a process there for
    addressing the fact that we're missing the deficit reduction target.
        I feel very strongly that that should be a part of the final
    package. You need to know what the problem is. Under the rather arcane
    rules of the Senate, this reconciliation, economic budget plan, is just
    about the only thing--I think the only thing that does not require--it's
    not subject to a filibuster. So if you get one more vote than half, you
    win, and it can't be filibustered, because the country has to have a
    budget.
        But if there is any subject in this reconciliation bill that does
    not directly relate to the budget itself, it can be challenged and then,
    in effect, you can require 60 votes to put it in there. This mechanism
    has been challenged by the Republicans in the Senate, even though I
    believe 100 percent of them are for it. I mean, I believe 100 percent of
    them honestly want to get the deficit down and believe that this
    discipline ought to be in there, and they're still fighting it because
    it's another way to derail what we're trying to do. So the way to get it
    in there is for at least four or five of them to let that go in the law
    because it's good Government. It doesn't have anything to do with party.

    Bosnia

        Q. Regarding the situation in Bosnia, now that you have met with
    Secretary Christopher, can you tell us a little bit about your options
    in the air strikes?
        The President. Well, we expect the U.N. forces there in Bosnia to
    communicate--the commander there to communicate to Boutros-Ghali what
    the situation is and what he wants, and then the Secretary-General of
    the U.N. will either make or will not make a request to NATO. And all
    this will unfold over the next few days during which time the Serbs,
    Bosnian Serbs, either will or won't stop shelling Sarajevo and will pull
    back. And we'll just have to wait and see what happens.
        But the United States is bound--we are committed to come to the aid
    of the United Nations forces as a part of NATO if they are attacked, and
    they have been. So we're just going to have to wait and see what
    happens.

    NAFTA

        Q. On NAFTA, are you telling all the Members of Congress what will
    happen to us if we have a disagreement with Mexico about rates and about
    products? And isn't it true that panels of young lawyers from Europe
    could come over here and decide questions of difference between us and
    Mexico about the operation of NAFTA?
        The President. You mean under the agreements now being negotiated?
        Q. ----and come back, and regardless of

    [[Page 1219]]

    what our laws were, they would be the ones to decide whether we were
    fair or not. And if they decide we were not fair, even if it was
    something that conflicted with our laws, they would prevail.
        The President. Well, I haven't agreed to any specific enforcement
    mechanism. But one of the things that has been of some controversy is
    the--obviously the Mexicans have not wanted to accede control of their
    national sovereignty to the United States and vice versa. So the
    Mexican, Canadian, and American negotiators have been struggling to find
    a way to adopt an agreement that had some teeth in it, that has some
    enforcement provision, at least if there were a pattern and practice of
    violation on their part or on ours. And I don't think they have
    finalized that. Until they do, I can't really say more.
        Q. [Inaudible]--the Republicans in the House are saying that our
    sovereignty would go and you all would have to, under the rules, that
    you would have to give in to this panel of lawyers from outside the
    country who would decide these matters.
        The President. Well, I can't comment on that because I don't know
    what they are finally going to agree to. But I think that the most
    important thing from my point of view is that we have some way of
    knowing that whatever we agree to is going to be observed by all
    countries and that it is not a violation of our sovereignty to be held
    to the agreements, to be held to keep our word. And we'll have to find
    some sort of mechanism to see that we do it and to see that the Mexicans
    do it. Nobody has discussed the option you just described to me, and I
    can't comment on it until I know whether it's a live option.

    Economic Program

        Q. Back to your economic plan. The conservative Democrats on both
    Houses are the ones who are really key to you. One of those
    conservatives is a key player, Charlie Stenholm, who was visiting with
    you last night. He came out saying that he still is unalterably opposed
    to the gasoline tax. What can you tell those conservative Congressmen,
    many of whom come from Texas, what basically can you give them to get
    their vote?
        The President. Well, let me tell you what they say. I mean, it's
    interesting what a lot of them say who aren't for the gasoline tax. They
    think that it raises so little money that it's not worth the political
    heat. A lot of them are basically tired of the partisan beating up
    they've gotten for trying to do something responsible about the deficit.
    They are frustrated that all of their attempts to put in more spending
    discipline--and Charlie Stenholm has done, I think, a brilliant job of
    that--has not generated any willingness on the part of Republicans to
    support any kind of reasonable budget package.
        And so they're saying that this is a pure matter of public
    perception: ``Why for a relatively small amount of money should we have
    any gas tax at all since it is a modest one and give the Republicans
    something else to beat us over the head? Why don't we just keep the
    upper income taxes and the spending cuts and go on?'' Here's the answer
    to that, and it's the question I pose to them. In other words, there's
    no--it's just not like the Btu tax. You can't make a claim that it's
    promoting great energy conservation or it's good for the environment or
    anything. It's just a very modest attempt to raise some funds to pay
    down the deficit and monies which someday might go into road building
    after the end of the deficit reduction period but not any time in the
    foreseeable future.
        The answer is this: If we have to pass this bill with only
    Democrats, there are other conservative and moderate Democrats who don't
    object to the gas tax but would object if we took out the economic
    growth incentives. And let me just mention some of them. And there are
    others who would object if we didn't reduce the deficit by $500 billion
    or some figure very close to it. So then the issue is, if you take out
    the gas tax, what do you replace it with? If you just say, ``Well, we'll
    just reduce the deficit by that much less,'' then you have all these
    people who say, ``Well, you lose me because we're not reducing the
    deficit enough.'' Or do you say, ``We'll take out the gas tax and we
    won't have any economic growth incentives.'' Now, let me mention some of
    them to just give you an example. Over 90 percent of the subchapter S,
    the small businesses in this country, will be eligible for a tax cut
    under this program because we double the expensing provisions. So any
    small business with adjusted gross income of under $140,000, which is 94
    percent of them, will be eligible for a tax cut under this program. They
    generate a lot of the jobs in America. That's a job program.
        We've got a provision in here to provide cap-

    [[Page 1220]]

    ital gains treatment--big break in people who invest for 5 years in
    companies that capitalize at $50 million a year or less. We took out the
    surcharge on capital gains to give people incentives to invest so they
    can earn investment income at lower rates than the personal rates. We
    have increased the research and development tax credit. We've increased
    the incentives for investing in getting real estate and homebuilding
    going again. That's one reason the national realtors and the
    homebuilders have endorsed this plan, two predominately Republican
    groups.
        If you take all that out, you know, to keep the deficit number up,
    to get rid of the gas tax, then you lose a whole different group of
    Democrats. Then there are those who say, ``Well, we don't need the
    earned-income tax credit. Get rid of that and get rid of the gas tax.''
    The problem is if you do that, you lose people who represent huge
    numbers of working poor. Eighteen percent of the work force in this
    country now, including a whole lot of folks in Texas, work 40 hours a
    week and still live below the poverty line. That's a stunning statistic.
        Perhaps the most important social policy, if you will, that I would
    think virtually all Americans could agree on that this plan furthers is
    that this says, if you're one of those folks and you have children in
    your home, and you work 40 hours a week, the tax system will lift you
    above poverty so that nobody who works with children will be in poverty
    if this plan passes, once we get it fully phased in.
        So if you take that out, then you lose all those Democrats that
    represent that. So the real problem is it's really an arithmetic
    problem. If you want the pro-growth, pro-jobs incentives and you want to
    support work instead of welfare and you want to stay at $500 billion of
    deficit reduction or awfully close, how do you do it without this modest
    fuel tax?
        The only other option that was given is further cuts in Medicare,
    which in my opinion, again, would lose you a lot of Democrats, both
    people who are concerned about middle class elderly people on Medicare
    and people who are concerned about doctors, hospitals, home health
    providers, and others who are under reimbursed now and who just have to
    shift their costs onto the private sector.
        So if someone could solve that problem--I wouldn't say that problem
    couldn't be solved--but I think it is highly unlikely that a resolution
    of that--I'm sympathetic with Charlie Stenholm. He has been very
    courageous. He has been very helpful. He has done as much as any Member
    of the Congress in either party to really control the deficit. And
    nobody has a better record than he does in trying to control spending
    and control the deficit. And he's made a very compelling case, but I
    don't know how to solve it.
        Q. Given the fact that if your plan passes--it will probably do so
    without a single Republican vote--do you think it would be fair for the
    American people to give your administration all the credit or all the
    blame with the economic condition of the country over the next 3\1/2\
    years?
        The President. No, but it'll probably happen anyway. [Laughter] That
    is, it will be fair to give the administration and those who voted for
    it the credit or the blame for whatever impact this has. And I think it
    will be basically positive. We know it will keep interest rates down. I
    mean, you've got Alan Greenspan, who's the Republican head of the
    Federal Reserve Bank, who has constantly told the Congress they need to
    do a deficit reduction package in this range, and they need to do it
    immediately to keep interest rates down and to help the economy to
    recover.
        But let me make two points. Just a substantive point--I don't want
    to talk about politics but just the substance of it. Number one, the
    country has been in an economic difficulty on and off for 20 years. The
    high water mark of American economic dominance was about 20 years ago.
    Since then the pressures of a global economy, which have punished the
    relatively undereducated, the relatively rural, the people that didn't
    fit very well in the global economy, have been building up and basically
    real wages of working people have been stagnant or declining, and the
    work week has been increasing for 20 years.
        For 12 years we have followed a path that worked in the short run
    but caused us great grief in the long time. That is, supply-side
    economics, which basically says we're going to cut taxes and increase
    spending, took us from a $1 trillion to a $4 trillion deficit--debt, a
    huge deficit. In the short run, we came out of the recession of '81-'82
    after we cut taxes and increased spending and kind of kept the lid on
    inflation. But in the long run we have dug ourselves into a hole now
    where we--for example,

    [[Page 1221]]

    we actually--almost anybody--Charlie Stenholm said the other day, ``We
    need to be spending more money helping places like California and
    Connecticut and some other places to convert from a defense to a
    domestic economy. But we don't have the money. We need to do whatever we
    can to train our non-college educated workers better. We don't have the
    money. We've got a lot of things we need to do. We can't and we're
    paralyzed''. So I would say to you that we didn't get into this mess
    overnight. We're not going to get out of it overnight.
        The second thing I want to say is, we need to bring the deficit down
    to zero. To do that, we have to pass health care reform. Then to make
    people more productive we need to pass our education bill and the
    welfare reform bill, and we need to pass a lot of other things. There's
    lots of work we need to do here to open new markets--you asked the NAFTA
    question--to get this economy turned around. But I expect to be held
    accountable. I just would tell you, this bill is important. Without it,
    we can't go forward. But it is not the end-all and the be-all.

    Cuba and Vietnam

        Q. One of the cornerstones of your whole program is to stimulate
    business growth. I'm just curious, do you believe that lifting the trade
    embargo against Vietnam at this time would benefit the economy? And a
    part two to that question: Do you believe that lifting the embargo
    against Cuba and allowing American businesses to trade in both Vietnam
    and Cuba would be good for the economy of this country?
        The President. I believe if the embargo were lifted, some businesses
    would clearly benefit. I think it would be a marginal benefit to the
    economy in the short run because the economies of both those countries
    are so small compared to ours. I don't think it would have a major
    impact. But I don't support it for different reasons. I think the
    embargo against Cuba should stand until there is a real movement toward
    freedom and democracy. I think the embargo against Vietnam should not be
    lifted until we have even more assurances that they are doing everything
    they can to help us with the POW/MIA issue.
        As you doubtless know, or you wouldn't have asked the question, I
    did remove the objections of the United States to letting Vietnam
    participate in International Monetary Fund financing, which will help
    them to improve, because they have taken a lot of steps since I've been
    President and since before I became President, starting right before I
    became President, to open up the country, to help us try to find the
    answers about our POW and MIA personnel. But I'm not confident that
    everything that should be done, has been done. And until I am, I can't
    support lifting that embargo.
        Q. I've talked to a couple of business people who say that telephone
    lines are burning up at the Commerce Department--[inaudible]--business
    people all over the country. I was in Vietnam and I met American
    business people who were there able to initial business contracts but
    couldn't sign them. I would just like to know, how much pressure are you
    getting from American businesses to lift the embargo?
        The President. Not much. Some. A lot of the business people want to
    do it, but I would hope that the business community would also
    understand that we have a lot of families out there, a lot of relatives,
    a lot of friends, and a lot of supporters of the people who have served
    who have never been accounted for. And that while we have gotten an
    awful lot of information in the last few months, even that has raised
    questions in some people's minds as why are we just now getting it, you
    know, and all of that.
        I think we are now getting real access to the country. We are making
    real progress. I just wrote a letter to the President in Vietnam, in
    response to a letter he wrote me, encouraging him to continue on this
    path. I know a lot of American businesses want to do business there, but
    that cannot be the sole criteria of what we do. And our first concern
    has to be for the POW's and the MIA's. We are moving in the right
    direction. Let's just hope it continues so we can continue to make
    progress.

    Taxes

        Q. The American people are now being taxed in local and State and
    national levels up to 50 percent of what they are making. And we look
    back at the serfs in Europe, and they only had to give up 30 percent of
    their income, and we looked at them as slaves. Why are we any better
    than the serfs? And why have you been so loyal to promises to the
    homosexual community, but not quite so loyal with your tax cut promises
    to the middle class of America?
        The President. First of all, what you've said

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    is not accurate. All major Western countries have higher tax rates than
    we do. You know, it does not serve the public debate to tell people that
    Germany has had a higher growth rate than America because they have
    lower taxes. It's simply not true. It is absolutely untrue. National tax
    rates in Japan are much higher than they are here. And aggregate
    corporate rates in Japan at all levels of government will be higher than
    they are here even if my plan passes. And if you look at the percentage
    of income going to taxes in America, with the exception of some very
    high taxed urban areas, where the cost of living is very high, we
    compare very favorably, if this plan passes in toto, with the tax rates
    in all the countries with which we are competing. The problem with it is
    that we're not spending money on the right things. We're spending too
    much on interest on the debt. We're spending too much on health care.
    We're spending too little on things that create jobs and growth and
    opportunity. Nevertheless, I did not raise taxes happily here.
        I was Governor of a State that was always, always, every year I was
    Governor, was in the bottom five States in America in the percentage of
    people's income going to taxes. Always. And after I had been Governor 10
    years, the same percentage of income was going to taxes that was going
    10 years before. I never raised taxes to balance the books. The only
    times we ever raised taxes in Arkansas was for schools and roads and had
    the support of big majorities of the American people.
        I don't like this. I made it very clear why I decided to ask for a
    modest contribution from middle class families with incomes over
    $30,000, but under $140,000; no income tax increases until families who
    were basically families, if you had two earners above $180,000. And the
    reason is that after the election, the Government--the previous
    Government, not mine--estimated the deficit over the next 5 years to be
    about $150 billion bigger than they said it was before the election.
        So I had to face a decision. Was I going to try to do more on
    deficit reduction and try to deal with this and get these interest rates
    down, based on changed circumstances, minimizing the tax burden all I
    could and still asking the top--really over two-thirds of this burden
    will come from the top one percent of taxpayers, who got two-thirds of
    the benefits the last 12 years. Or was I going instead to do what was
    more politically popular and consistent with what I honestly believed in
    the campaign but not what I thought was best for Americans. And I
    decided the best thing to do would be to try to take account of the fact
    that the deficit was $150 billion bigger than we thought and to try to
    respond to it. The American people will have to decide whether they
    think that's right or wrong.
        Now, I have done my best to make the tax system fairer. I have done
    something for working families under $30,000 a year. They've all been
    held harmless. We've done something significant for the working poor.
    And I have 4 more years to try to deal with further inequalities in the
    tax system, which I plan to do. But I think this deficit has to be
    attacked first, and I think I did the right thing.

    Space Station and Super Collider

        Q. From a scientific standpoint, do you think the collider and space
    station are of equal merit? And would you be prepared to veto an energy
    and water preservation bill if it's not included in the collider
    funding?
        The President. Well, I don't know if I would be prepared to veto it.
    Nobody has ever asked me that, and I don't know what the consequences of
    that would be. I think that they are different, entirely different. The
    space station is important technologically, and it's important for our
    country's continued leadership in space, which is very important. It
    also has enormous international implications in terms of potential
    partnerships with Russia and with a lot of other countries.
        If we back off of this space station, other countries will move into
    the breach, they will push us out of an area that we plainly dominate
    the international economy in. They will make those partnerships, and we
    will be left, I think, without the leadership that we need and deserve
    and without the potential to create enormous economic opportunity, as
    well as political cooperation in the years ahead.
        It's interesting, and I'm glad you mentioned it. One of the things
    that is very important and quite apart from the technology is that the
    promise of cooperation between the United States and Russia, and perhaps
    with other countries just emerging, is one of the main carrots we have
    if you will--not a stick but a carrot--to discourage countries from
    doing irresponsible things with nuclear weapons, with other weap-

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    ons of mass destruction, discourage them from selling them to other
    people. So I think that's very, very important.
        Now the super collider is different. The space station is a
    technological wonder that maintains our leadership in an area we have
    already fleshed out. The super collider is science. It's research.
    Therefore, it is, by definition, less certain. But this country has
    gotten a long way throughout its history by taking a chance on things
    that might not be certain that promised enormous potential benefits. So
    the possible benefits of the super collider, the possible implications
    of it, in any number of areas of technology in the future, are
    absolutely staggering.
        Sure, it might not work. It's like any investment of this kind. But
    that's what science is. This is scientific research. This is an attempt
    to break down barriers of knowledge, to see the world in a whole
    different way, to unlock all kinds of secrets. And we have made a major
    investment in this. We also, by the way, can get some other countries to
    invest in it, but not if they have to sit around every year waiting to
    see if we're going to chuck it. I mean, one of the biggest problems
    we've had in getting these other countries who said they'd invest in it,
    is they don't know from one year to the next whether we're going to keep
    it. And one of the things that I hope we can do this year, if we can get
    it passed in the Senate, get it in the conference, is to get a
    commitment for a multiyear continuation of it.
        Now, it is more difficult to save than the space station simply
    because it's science instead of technology, if you see what I mean. It
    is by definition more theoretical. But I still think it's quite
    important, and I am hoping we can save it.
        Thank you.

    Note: The interview began at 5 p.m. in the State Dining Room at the
    White House.