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



Interview With the Arizona Media
July 30, 1993

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

[[Page 1239]]

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

Deficit Reduction

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

Senior Citizens' Investments

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

Economic Program

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

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

Small Business

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

Economic Program

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

[[Page 1241]]

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

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

Manufacturing

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

Economic Program

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

[[Page 1243]]

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

Health Care

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

Consumer Confidence

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

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

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