    [Public Papers of the Presidents of the United States: William J. Clinton (1993, Book I)]
    [July 27, 1993]
    [Pages 1200-1206]
    [From the U.S. Government Publishing Office www.gpo.gov]

    Interview With the Georgia Media
    July 27, 1993

        The President. Well, first of all, I want to thank you for coming.
    Welcome. As you probably know, we've been doing a whole series of these
    press conferences, both when I'm out and when I'm here and also some of
    it electronically, but as much in person-to-person as possible. And I
    would like to give as much time as possible to answer your questions.
        But I think I should begin with a story that Charles Stenholm told
    this morning. He's the chairman of the Conservative Caucus in the House
    who, by the way, thinks we should make some changes in the program
    during the conference. But he acknowledged today that--he said every
    time someone calls me criticizing this program, they've normally had
    their heads filled full of misinformation by people who are criticizing
    them without telling everything. And every time I talk somebody through
    it, they wind up thinking it's not so bad.
        Last night Leon Panetta went to a Maryland district that's fairly
    representative of the United States with Congressman Cardin and went
    through the whole program. And afterward the Congressman asked the
    people, ``Do you want me to vote for this, or do you want me to delay it
    60 days more or just let it to go to pieces and see what happens?'' And
    three to one, they wanted him to support it.
        Then the Wall Street Journal last week finally began something that
    has not happened up here. This is not your issue but ours in Washington.
    They actually went around and started asking people who said they were
    with small business groups opposed to this plan if they knew what was in
    it, and it turned out they didn't. And over 90 percent of the small
    businesses in America will actually be eligible for a tax reduction
    under this program, because they have no tax increase on the income
    taxes, and we doubled the expensing provisions for small businesses.
        So the program--I just want to emphasize again--is the only program
    presented that provides $500 billion of deficit reduction, an equal
    balance between spending cuts and tax increases. For every $5 in
    spending cuts, there are $5 in tax increases; $4 of those come from
    people with incomes in the upper 5 percent of the income brackets; $1
    comes from the middle class. Working families with incomes of under
    $30,000--and there are a bunch of them in Georgia--are held harmless in
    this program. An average family of four with an income of $50,000, we're
    looking at a ceiling of about $50 a year, which is less than a buck a
    month to get the deficit down and provide some of the

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    economic incentives to grow some jobs, which I think is very, very
    important. So I think it's a balanced plan. I think it's a fair plan.
    And if you look at the alternative that was presented in the Senate,
    it's the only serious plan so far that's been up that really has big
    deficit reduction in a fair way.
        Questions? Go ahead.

    Georgia Congressional Support

        Q. As you're meeting with us, obviously, some of this is directed at
    reaching our congressional delegation as well. We had conservative
    Democrats in the House, and obviously Senator Nunn in the Senate, who
    had voted against the plan. How are you approaching our delegation? Are
    you meeting with them personally? How are you lobbying them? Are you
    disappointed that you haven't had them with you? And do you think you
    can turn them around?
        The President. First of all, we got a good number of votes from
    Georgia for which I am very grateful. But let me tell you how I'm doing
    it generally. I'm trying to meet with the House Members in the big
    caucuses first: the Conservative Caucus; the Mainstream Forum, which is
    sort of the DLC group; the Black Caucus; the Hispanic Caucus; the
    Women's Caucus. I've met with all of them, except I'm meeting with the
    Mainstream Forum tonight, and then talking to individual Members about
    individual concerns.
        In the Senate we pretty well know the 10 or 15 Senators that could
    go either way and what the issues are for them, and so I'm trying to
    talk to each of them individually about their concerns. I met with four
    Senators over the weekend, and I have talked to a number of others over
    the phone.
        The concerns basically are twofold. They break down into two broad
    categories. Some are just worried about a political reaction. And many
    of them have said to me, ``Look, if our constituents knew what was in
    this, we know they would support it.''
        This is the only political issue in my lifetime where people have
    known less about it as it's gone on; that is, known less about the issue
    as time has gone on. The night I gave the State of the Union Address
    when there was a great deal of support for this was really the time when
    people had the largest number of facts. And then all the groups that
    ginned up opposition to it--it's like this spokesperson for a small
    business group last week ran a car washing service; turned out she got a
    tax reduction, not a tax increase out of this plan, and she didn't know
    it. And the people that had gotten her to stand up and speak against
    something she didn't know what was in.
        So for those folks we have really got work on just making sure that
    they understand, that we now have an aggressive effort to get the
    evidence out that this is fair, progressive, real deficit reduction and
    real job creation. It's going to keep interest rates down and get jobs
    up. I mean, that's just a--that's reality, and I think that's important.
        To the second argument is that the country wants us to make a
    decision and go on about other things. They don't want us to fool around
    for 60 more days without a budget. They want us to make a decision and
    then deal with health care, the crime bill, the welfare reform bill, all
    the other issues out there facing us.
        Now, there's another group of people who basically didn't like
    either the bill that passed the Senate or the bill that passed the House
    but are more than prepared to take the political heat associated with
    serious deficit reduction if they can get a bill that they agree with.
    Senator Nunn, for example, told me that there were basically two big
    issues for him. And he told me that he might have reluctantly voted for
    the House bill because the House bill addressed one issue, which is that
    we need some more incentives in the Tax Code for people to invest their
    money in job-creating activities. And in the House, you know, we had
    incentives for new and small business capital gains tax. You invest your
    money in a business capitalized at $15 million a year less; if you hold
    it for 5 years, you cut your tax rate in half on the gain.
        By raising personal income tax rates, we created a significant
    incentive to halve capital gains generally by investing in new
    businesses. We had some new incentives for new plant and equipment. We
    had new incentives to revive real estate and homebuilding. We had
    incentives to do more research and development.
        When the Senate passed its bill to move from the Btu tax down to the
    fuel tax at 4.3 percent, one of the ways they did it was just to
    eliminate all that stuff, as well as the empowerment zones to try to get
    free enterprise into the depressed urban and rural areas. They cut that
    way, way back, so--no, they eliminated it in the Senate bill.
        So, I believe that that concern will be ad-

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    dressed in the conference report. That is, I think the final bill will,
    through a combination of other spending cuts and maybe some just minor
    modifications to the revenue package, put a lot of those job incentives
    back in there.
        The other issue that Senator Nunn raises is one with which I am very
    sympathetic but one that I am absolutely convinced we cannot deal with
    right now but that we have to deal with. And that is that there needs to
    be some limits, some discipline on the growth of entitlement spending.
    Let me just give you an example. The budget that was passed last year
    before I became President had an estimated 12 percent a year increase in
    health care costs, Medicare and Medicaid, 12 percent a year. Now, the
    rolls were growing some, but most of it was just inflation, paying more
    for the same health care.
        We cut that back to 9 percent a year and saved $55 billion or so off
    the previous budget, a big shave. But still if you look at this budget
    now, you've got defense going down, many domestic programs going down,
    and an overall freeze on domestic spending. That is, for all the
    increases we have in Head Start and worker training and new technologies
    and defense conversions, we have offsetting decreases in something else.
    And the only thing that's really increasing in this budget are the
    retirement programs, Social Security cost-of-living increases, which are
    at least covered by the Social Security tax, and other cost-of-living
    increases on retirement programs and health care. That's what's going
    up.
        So Senator Nunn and others believe, and I do, that you have to find
    a way to control health care costs. Otherwise, you're going to give the
    whole budget over to health care. You wind up cutting defense too much,
    and you don't have enough money left to spend where you ought to spend
    it, which is in revitalizing this economy. The problem is that if you
    put a cap on health care costs in this budget without reforming health
    care, which is the next big issue I want Congress to take up, if you did
    that, then all that would happen is you'd impose a hidden tax on every
    American with health insurance. Because what happens is if you just quit
    paying doctors and hospitals at the Federal level, then they just send a
    bill to your employers and to you if you pay part of your health
    insurance.
        And that's why I don't think we can pass this cap now. I think we
    can pass the controls on health care costs by the Government if we
    reform health care. So anyway, that's a long answer. But you're
    interested in the Georgia politicians. I'm dealing with the political
    concerns and the substantive concerns as they come up.

    Senator Sam Nunn

        Q. Can I follow up? Why could you not convince Nunn of that, given
    the fact that here's a guy who supported you in the campaign and sold
    you, in effect, to Georgia voters in campaign ads? And it would seem
    like, this being as important to you as it is, that you would be able to
    persuade him to accept the logic of that and wait for health care reform
    down the road.
        The President. I'm not sure he won't. I mean, he told me clearly
    that he found that he thought the Senate was wrong to take out all the
    job incentives, and of course, I did, too. But my argument to him was
    don't let the thing get defeated. Let's send it to Congress and see if
    we can put them back in. But you know, he and Senator Domenici worked
    for years on this program of strength in America. I think he's got a lot
    vested in it. He's got some very strong convictions about it. But all of
    us, including the President, in order to get anything done in a tough
    time, we've got to be willing to compromise some. And I hope we will get
    his support at the end.
        But I just wanted to tell you what I think the roots of it are. I
    think they're--and that I'm very sympathetic with a lot of what he was
    saying. And I think in the end we'll get where he wants to go.
        Let me just mention one other thing I have to tell you. If you get
    the budget out of the way and you start health care reform, which is the
    only way to ever get the deficit down to zero, by the way--I'm not
    satisfied with going down to $200 billion a year and then going back up
    again in 5 years; we've got to do something about health care to move it
    to zero. Then the other big issue that's coming up this fall that I
    think is terribly important is the Vice President's report on
    reinventing the Government. That's been a big issue that Senator Nunn
    and I worked on through the Democratic Leadership Council. He is going
    to offer some very controversial but very important suggestions to cut
    the overhead costs of the Federal Government and make it more efficient,
    make it more

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    user-friendly to the taxpayers, and free up some money which can itself
    be used to reduce the deficit or to invest in our future. So all these
    things have to be seen together.
        And the argument I have to make to Senator Nunn--and I'm trying to
    make to some others, and a lot of the moderate Republicans who basically
    think they ought to support me if they could get out from under the
    partisan deal--is that you cannot solve every problem with the Federal
    budget with this act. We cannot solve all the problems. But if you put
    the budget and economic program with the Gore reinventing Government
    initiatives, with health care reform, you can bring this deficit down to
    zero, and you can really revitalize the economy, and you can do it in a
    way that's fair to all the American people. But you can't do it in one
    bill. And I guess that's the--a lot of the people who are holding out
    are saying, ``Well, we want it to be perfect.'' Well, it can't be
    perfect. It's just got to be a big advance. It's given us the
    dramatically lower interest rates, and it's a good thing.
        Q. Can you tell us a little about your relationship to Senator Nunn?
    I'm belaboring the point a little bit, but we have watched this over the
    last 6 months. How often do you talk with him? How is your personal
    relationship, despite all of the thing with gays in the military----
        The President. Probably--I don't know--anyway, often. I talk to him
    often on the phone. And I see him with some frequency, and I hope to see
    him again pretty soon to discuss this. But you know, it's not unusual
    for me every week, a time or two, to pick up the phone and call him on
    something.
        Q. Are you frustrated with him?
        The President. No. No, I mean, I think--you know, I don't agree with
    the decision he made on the budget bill. But I agree with the reasons he
    had for not liking the way it came out. I didn't like the way it came
    out. But I think we should have kicked it into the conference--the
    Senate did the right thing--so we could keep the process going. Because
    the Republicans have not offered any credible alternatives, so there's
    no basis for us to build a bipartisan coalition. I hope we never have
    another bill without a bipartisan coalition, because I'm not comfortable
    with that. But in general I think it's going pretty well. I mean, the
    other issues--you know, he never made any pretense. He never agreed with
    me on the gays in the military issue. He made it clear in the campaign.
    He made it clear during the transition. He made it clear after the
    election. And we wound up--he wound up in a place where I don't think he
    expected to wind up either. I mean, I think we moved this thing quite a
    long way.
        As a practical matter, if you read this policy, it differs from what
    I said in the campaign in only one respect: You still can't openly
    declare your homosexuality without some fear of being severed from the
    service. If you do that, the burden is then on you to demonstrate you
    are not going to violate the Code of Conduct. But I never said one word,
    not a word, about changing anything about the Code of Conduct. And yet
    the military leaders themselves decided to go further than they had ever
    gone in protecting the privacy and association rights of all members of
    the military in ways that Colin Powell summed up as a policy of ``live
    and let live.'' That goes well beyond anything I even talked about in
    the campaign. Senator Nunn endorsed that. The Joint Chiefs endorsed
    that. The House leadership yesterday endorsed that. So I'm very
    encouraged about where we are on it.

    Economic Program

        Q. I've asked this question of a couple of your people, and I'd
    really like to hear your response on it as well. You last week released
    the jobs State by State that you think the plan will generate. Now, this
    morning in a session, Roger Altman's staff basically said, ``Gee, we
    probably shouldn't have been so specific. We should have rounded these
    numbers a little bit. We're not going to create 238,416, or whatever,
    for the State of Georgia.''
        The President. It might be more; it might be less. I think everybody
    knows projections are approximations.
        Q. But the choice was to release very specific numbers and now to
    round them. And now the administration is getting some criticism for
    that. Do you not think it may have been a mistake to have tried to put
    such specific numbers together in an attempt to sell this plan?
        The President. Well, it may have been, but let me tell you why we
    did it. What we're trying to do is to avoid--frankly, the main reason we
    did it was to avoid overpromising, because I don't believe that this
    plan alone can restore America's health. I just think it is the
    critical, it is the critical first step. Without it I think you have
    total uncertainty; you have chaos; you

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    have interest rates going back up again, and you have a Government that
    can't get anything done.
        With it you begin the march to progress. I think to get total
    economic health you have to do something about the health care crisis,
    do something about the way the Government does its business, deal with
    the welfare reform issue. And then there has to be a whole set of other
    economic strategies to help people convert from a defense to a domestic
    economy, continue the education and training of the work force, open new
    markets, all those other things.
        So I think what they were trying to do was to say yes, it will do
    something, but we don't want to overpromise. Here's a model we ran
    through, and this is where we got. It may or may not have been a
    mistake, but we were trying to give people a sense of what our own
    research had produced.

    Media Coverage

        Q. Could I ask a followup please? One of the reasons for days like
    today is that people acknowledge that you have been misunderstood to
    some extent in terms of this plan. As you well know, there's been a
    fairly constant sense among some people in the administration, and
    sometimes you're one of them, that you've been misunderstood a lot on
    issues like gays in the military and what you first meant and what you
    really meant and on the economic plan, that sort of thing. Why, now that
    you've been here for a while, do you feel there is something systemic
    that's wrong with the way the media covers the White House? Why have you
    been so misunderstood by the people who cover this administration?
        The President. Oh, I don't know. I think that for one thing if you
    throw something really controversial out there, and are new and
    different, it is very difficult for anything but the controversy to get
    constant coverage. And I don't say this so much about you but I mean,
    just in all the stories that compete for time on the national news. For
    example, let's suppose you're--and this is not a criticism more than an
    observation--suppose you are the producer of ABC News or wherever.
    You've got to put the flood on, right? The Israelis bomb the Bekaa
    Valley or attack the--you've got to put that on. So instead of, I mean,
    you can't go back through every night all the essence of the economic
    plan. And if our adversaries decide just to scream, ``taxes,'' it's just
    easier to cover that story and to get it in the timeslots you can cover
    it.
        I think that a big part of it is when there is just a huge volume of
    news and you've got somebody like me who's very much into trying to
    solve problems and get them out of the way, whether it's the test ban
    issue or the POW issue or the Northwest United States forest issue, I
    just try to take all these things and move through them. If you get
    something really controversial like gays in the military, it's not as if
    I had a chance to sit in the home in a fireside chat with the American
    people and walk them through my position and then walk them through why
    we came up with this compromise and why I think it is the principled,
    right thing to do.
        And on the economic plan, I think it's just clear, I think--let me
    just give you--Bernie Sanders from Vermont is an independent from
    Vermont, the only independent in the Congress. He called me the other
    day and he said, ``I have done you a terrible disservice.'' I said,
    ``What do you mean? You voted for me on everything.'' He said, ``That's
    what I'm telling you.'' He said, ``If the progressives in the Congress
    had burned you in effigy for all these spending cuts, then America would
    know you had made spending cuts. But because the entire Democratic Party
    and I rolled on the spending cuts, it was never newsworthy.'' They
    weren't newsworthy. The newsworthy thing was the fight over the taxes,
    so that even when the Republicans--they were so smart about it--when the
    Republicans in the Senate Finance Committee offered all kinds of things
    to water down the tax program, but they did not offer one, not one red
    cent in spending cuts, because they didn't want to take any tough
    decisions. They knew we already made a lot of spending cuts, and they
    just wanted a lot of attacks on the taxes.
        So I think, frankly, anytime you do hard things and you try to
    change, you have to expect to be misunderstood. But when you've got more
    than one thing out there at once, you have to really work on talking it
    through, which is why I think I should have been doing this from
    February the 18th until today, not just for the last month or so.
        Q. But is any of this your fault, sir?
        The President. Sure it is. Sure it is. I mean, I'm sure it is. I've
    got to learn--you know it is. But I'll tell you this, I've got an
    administra-

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    tion that's tried to face the problems of this country. Everybody up
    here is trying to do right by America. We get up every day and go to
    work, and we have taken on things that have been ignored for a long
    time. And I do not believe, frankly, that the evaluation of the
    administration by the press or the people has fairly compared us with
    what got done in previous administrations. I mean, I could have been, I
    guess, immensely popular if all I'd done is make speeches for the last 6
    months and not try to do anything.

    Taxes

        Q. Mr. President, this goes to what you've already been saying about
    American taxpayers. There are many people who have the perception that
    you are a taxaholic, that you didn't get the message that many people in
    this country want you to cut spending first, get rid of the bloat in the
    Federal Government and then talk about tax hikes.
        The President. But we are cutting spending. And if all you had was
    spending cuts, you would have a deficit reduction package in the
    neighborhood of $250 billion to $260 billion which no one--which the
    financial markets would not take seriously and interest rates would be 2
    percent higher and all these people refinancing their home and saving a
    ton of money on it wouldn't be saving it.
        In other words, let me give it to you in another way. We are cutting
    spending. We're going to cut more spending. But you'd be amazed how many
    of those same people, when you say, ``Okay, all the growth is in
    Medicare and Medicaid. You want me to cut Medicare?''--they say, ``No,
    don't do that.'' I mean, there are people who believe that all the
    Federal budget goes to welfare and foreign aid--which is something we
    cut, by the way, foreign aid--which is a tiny percentage of the total
    overall budget of the Federal Government.
        We are--this administration, not the two previous ones--that's
    really got the serious attempt going to reduce the Federal bureaucracy
    and to change the way the Federal Government relates to people. That's
    what the Vice President is working on, and we'll have our report out
    next month. But we don't have time to fool around.
        Let me just make one final point about this. David Stockman, who was
    Ronald Reagan's Budget Director when the '81 tax cuts were enacted, gave
    an interview last month in which he said it was folly to believe we
    could balance the budget on spending cuts alone, because in 1981
    President Reagan intended to cut taxes 3 percent of national income. And
    by the time he and the Congress got through with their bidding war, they
    had cut them 6 percent of national income, so much that some companies
    couldn't even handle all their tax cuts. They were selling them to
    others. And he said, ``That has to be reversed.'' That's what I'm trying
    to do.
        And you know, let me just point out for all those people who think
    I'm a taxaholic, for 12 years I was Governor of a State that was always
    in every year in the bottom five of the States in the country in the
    percentage of income going to State and local taxes, in every year. We
    had the toughest balanced budget law in the country, and the only time
    we raised money was when a majority of the people of my State supported
    it, and the money went to schools or roads. We didn't do anything but
    education and jobs with new taxes. In the late eighties, the percentage
    of our income going to taxes in Arkansas was the same as it was in the
    late seventies when I became Governor.
        But when you get up here, you see the problems we've got and you see
    how long they've been ignored. And keep in mind, families with incomes
    under $30,000 are going to be held harmless. Families with incomes
    between $30,000 and $140,000 are going to be asked to pay very modest
    amounts. The average payment for a family of four with a $50,000 income
    is $50 a year. To get this deficit under control, I think it's worth it.
    If the people don't think so, they can tell their Congressman. But the
    idea that there are no spending cuts in this thing is simply not true.
    The spending cuts have not been controversial, so they have not been
    reported, so people don't think they exist. But they do exist.

    Legislative Action

        Q. Mr. President, what are the consequences of your not getting this
    budget plan passed as you want it by the August recess?
        The President. Well, the consequences of not passing a budget plan--
    it won't be exactly as everybody wants it. That's what a democracy is
    about. People get together and work through. But if they don't pass the
    budget plan by the August recess, what will happen is we'll flail

    [[Page 1206]]

    around here for a couple of months. You'll see interest rates start to
    go up again. Uncertainty will get worse, and you'll wind up with less
    deficit reduction. Politics will take over, and you'll wind up with less
    deficit reduction. So the thing we need to do is to make a decision and
    get on with it. I mean, we've been fooling around with this for long
    enough.
        I realize that we're keeping a pace that's faster than normal for
    Washington; but for America, they want something done. It's time to do
    something. It means that if you fool around with it, it means we don't
    deal with health care; we don't deal with welfare reform; we don't deal
    with the crime bill; we don't deal with all these other issues that are
    out there crying for attention in America. Eight months is long enough
    to make a decision about a budget and an economic plan. It's just long
    enough.
        Q. Are you worried you're not going to be able to get it?
        The President. Well, I think in the end they will do it because I
    think that all the Republican Members have gone on strike basically.
    We've reached out to them. We've tried to negotiate with them. And they
    have basically said, you know, they don't want to talk unless we're
    willing to do things that aren't real, adopt these amorphous caps and
    slash Medicare even for middle class people, and I'm not willing to do
    that.
        Q. Did you talk to Senator Coverdell?
        The President. Yeah, I've met with the whole Republican caucus. And
    I meet with the Republican leadership, with the Democrats every other
    week.
        Q. What have you learned about your ability to rally your own
    troops? You talked about under Republican resistance, but some of the
    strongest resistance has come within the party.
        The President. Well, I think you should not assume--the Democratic
    Party, first of all, is much more diverse than the Republican Party but,
    secondly, has been much more unified with me than the Republicans were
    with President Bush.
        That's another thing. Look at the historical perspective. Here's a
    little question: There was a Republican House budget plan and my plan
    voted on back to back in the House. There are more Democrats than
    Republicans, right? Now, the Republican plan was no tax increases, the
    Kasich plan. He lost more Republicans for his plan than I lost Democrats
    for mine because it was so unfair to the elderly, the poor, the middle
    class. That was the other plan in the House. Last year, 1992, when the
    Bush budget came up in the House of Representatives, 75 percent of the
    Republicans, not the Democrats, the Republicans, voted against it. Why?
    Because it was a political document. I mean, I have given them a real
    budget, and it's tough.
        Let me just say one thing in closing. The reporter for the
    Philadelphia Inquirer, the political reporter, went out and did
    something that we should have arranged. I wish I had thought about it,
    but he did it about 2 weeks ago. He interviewed all these budget experts
    who work for private companies but whose job it is to know about the
    Federal budget. And he wrote an article which said that the consensus
    was that my claims were accurate and that Senator Dole's attacks were
    not. And the budget expert for Price Waterhouse, not an employee of my
    administration, said that the budget we had presented was the most
    honest budget in more than a decade and the only thing that was wrong
    with it was that it would produce more deficit reduction than I was
    claiming. And we can get you a copy of the article. It was very
    impressive.
        But I think the Democrats, when you think about the withering attack
    that they have been under, constant misinformation, and almost no way to
    get the facts out except through their newsletters--and we have begun to
    run ads for some of them now, those that have been subject to ad
    attacks--I think there's been a remarkable cohesion in a very diverse
    party because there is now a consensus that the time has come to do
    something about the deficit and to try to grow some jobs. And that's
    what we're trying to do. And I think they'll do it before August 5th.
    I'll be very surprised if they really want to go to an August recess,
    have all this unresolved, and come back here and fool around in
    September and October and not deal with the other problems of America. I
    think it will be a mistake, and I don't think they'll do it.
        Thanks.

    Note: The interview began at 3:59 p.m. on the South Lawn at the White
    House.