[Public Papers of the Presidents of the United States: William J. Clinton (1993, Book I)]
[June 1, 1993]
[Pages 787-796]
[From the U.S. Government Publishing Office www.gpo.gov]



Remarks to the Community in Milwaukee, Wisconsin
June 1, 1993

    The President. Thank you very much. Senator Kohl, Congressman 
Barrett, Mayor Norquist, ladies and gentlemen, it's wonderful to be back 
in Wisconsin and back in Milwaukee again for the first time since I 
became President. I suppose I ought to begin by thanking the State of 
Wisconsin for your electoral votes. I'm very grateful for that. I'd also 
like to thank the Metropolitan Milwaukee Association of Commerce and the 
Public Policy Forum for hosting this opportunity for me to visit with 
you, and through you, all the people of Wisconsin, about the economic 
issues facing our country.
    I'd like to introduce some other people who are here, up there 
somewhere. I asked Senator Kohl where they were, and he said, ``Up there 
somewhere.'' But it's dark. I can't see. I brought with me the former 
chancellor of the University of Wisconsin, now the Director of the 
Department of Health and Human Services, Donna Shalala, who is here; the 
chairman of the Joint Economic Committee in the House, your Congressman, 
David Obey, is here with me somewhere there; and we were met at the 
airport by Congressman Gerry Kleczka, who is here, Gerry; and 
Congressman-elect Peter Barca, who is also here somewhere. Thank you.
    You know, a lot of times when I get out in the country now, people 
who worked for me--or who didn't, who just feel like they can come up 
and talk--say, ``Well, aren't you worried about getting isolated up 
there in Washing-


[[Page 788]]

ton? I mean, what's the real difference in being President and just 
being out here living?'' And I had one thing happen to me a couple of 
weeks ago that illustrates the problem of being President or in the 
Congress or anything else.
    I was in the White House and I was up on the residence floor. And I 
got on the elevator, and I was going down to the first floor where all 
big--if you've ever taken a tour of the White House, that's where all 
the big, fancy rooms are that the public tours. But we also use them 
when they're not open for tours, and I was going to a meeting there. And 
the young man who was taking me down in the elevator works for the 
Usher's Office, and of course, they were all hired under my 
predecessors. He didn't know me very well, and he was a little awkward, 
you know. So he took me downstairs, and he opened the doors of the 
elevator, and I found myself immediately in the presence of 30 total 
strangers who were standing there in front of the elevator. And it 
turned out that they had been walking out of a meeting with my wife on 
something entirely different. I didn't know them. They didn't--they knew 
who I was, but I'd never met any of them. [Laughter] And there I was. So 
I said hello to them, shook hands with them, and they walked by. And I 
turned around and looked at the young fellow running the elevator, and 
he was all red-faced. And he said, ``Oh, Mr. President,'' he said, ``I'm 
so sorry I let you out in the midst of all those people.'' And I looked 
at him, and I said, ``John, that's okay. I used to be one myself.'' 
[Laughter]
    I want to say a lot of things that I'll get into in a moment, but 
there are one or two things I want to say especially about Wisconsin. 
First, I was very moved by the drinking water crisis here. And one of 
the things that we tried to invest in that I don't think is a waste of 
your money in the next 5 years is more Federal investment in dealing 
with drinking water problems, waste water problems, and other 
environmentally related issues. I think that's a good investment of our 
tax dollars. And I did enjoy my conversation with your Mayor about that.
    The other thing I'd like to do is to--[applause]. Thank you. I want 
to say a little more about this in a moment, but since it was brought 
up, I want to compliment Congressman Barrett and Congressman Kleczka for 
reintroducing the appropriations to fund the New Hope welfare reform 
project. It was vetoed last year. And I just want to tell you that, as I 
said, I want to say a little more about this in my speech, but the idea 
of giving people the tools they need to move off welfare and then 
calling a halt to it after 2 years, saying it has to come to an end and 
people who can should go to work, I think is a good thing. And I think 
we ought to fund that experiment in Wisconsin and see if it won't work. 
I think a lot of people will be for it, and I think it will work.
    For any visitor who comes here to Milwaukee, as I have many times, 
the church steeples and the factory smokestacks are a vivid reminder of 
the faith and the work that made our country what it is today. People 
from every continent have come to our Nation and come to cities like 
Milwaukee and Chicago and Detroit without much money in their pockets, 
but filled with the faith that if they worked hard and played by the 
rules, they would find a better life for themselves and give their 
children a better chance.
    In my part of the country, in the rural South, when the agricultural 
economy collapsed in the Depression and then didn't pick up after the 
Second World War, for 30 years people poured out of the places where my 
folks farmed in Arkansas and Mississippi and southern States and came up 
here to the northern cities seeking that same kind of opportunity.
    Over the years in different ways our country has dealt with 
different economic challenges, but we have always tried to keep alive 
that American dream that if you worked hard and played by the rules you 
would be rewarded. If you were especially good you could get very, very 
wealthy, but everyone knew that the country would rise or fall based on 
the broad middle class, the small business people, the factory workers, 
the farmers, the people who really lifted the country and made it work.
    We have, to a large extent, in the 20th century succeeded in doing 
that until just recently. Until recently, that is, in the last 20 years, 
we had succeeded in building the world's most diverse society and 
keeping it growing together, not coming apart.
    Today, we're more diverse than ever before. One county in 
California, Los Angeles County, has 150 different racial and ethnic 
groups. Today, we still have the strongest, most vibrant free enterprise 
economy in the world. We have some of the most productive businesses in 
the world. But we have serious economic problems, as you all know.

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    Hard work rewarded by rising living standards is literally at the 
heart of what it means to be an American. It's at the heart of my 
family's heritage and probably at the heart of most of your families' 
heritage. And it's at the heart of the economic philosophy that 
compelled me to enter the race for President in 1991 and that brings me 
here again to Milwaukee today.
    Once Americans looked forward to doubling their standard of living 
roughly every 25 years. As I said, that stopped about 20 years ago, as 
we began to be confronted with the highly competitive global economy and 
a slower rate of economic growth in our own country. Now, it will take 
us about 75 years to double our standard of living at the present pace. 
That means that not only do you have too many people who want to work 
who can't work, you have too many people working part-time, and you have 
too many people who are working like crazy and falling further and 
further behind. Because I believe we can do better, I asked the people 
of this country to give me a chance to serve as President.
    As I said, it's very important to note what happened and when. Our 
real average hourly wages peaked about two decades ago. And since then, 
they've either been stagnant or declining as a whole. Indeed, the 
average working family is spending more hours a week on the job than 
they were in 1969 for lower real wages than they were making certainly 
12 years ago, and in many cases, 20 years ago. This is because, as I 
said, of changes in the global economy, more competition from people who 
were either more productive than we are or who work for wages we can't 
live on, or lack of productivity growth, of efficiency growth in our own 
country, or other problems with our economy.
    Twelve years ago, in 1981, after the Presidential election of 1980--
another election conducted in very difficult economic circumstances--the 
American people decided to give another President the chance to try an 
approach to deal with this problem. The whole idea of Reaganomics was 
trickle-down economics, that we should lower taxes on the wealthiest 
Americans, depend upon them to invest in our economy to grow it; we 
should reduce domestic spending, but increase defense spending even more 
than we reduced domestic spending.
    Now, in the last 12 years, that philosophy was modified around the 
edges some, but it maintained itself at the heart of our economic 
dealings. Because the taxes were cut so much in '81, they were added 
back a little bit over the last 12 years, mostly on the middle class. 
And after a while, defense spending could not be sustained because of 
the end of the cold war, so it began to be cut. But by the time it was 
cut, health care costs were exploding. So all the defense cuts were 
swallowed up by exploding health care costs and interest payments on the 
debt.
    But the fundamental idea remains, that the most important thing was 
not to worry about investment or the deficit or anything else; the most 
important thing was to worry about keeping taxes low on upper income 
people and keeping the Government's hands off the economy, except when 
it was necessary to invest in defense, and then when it wasn't 
necessary, to even get out of that.
    Now, that was the theory, and we now have had a chance to see how it 
works. I think it's fair to say that the only reason I was elected in 
1992 is that the American people thought that it hadn't worked very 
well, that there were problems. I say this--as I will make clear in a 
minute, this is not a partisan criticism, because it took bipartisan 
agreement at least to go along with the framework of this. But what had 
happened was that we had a good deal of growth in the early eighties, 
where we had defense increases and tax cuts, but the deficit got big. 
Then when the defense business got cut, all we did was pay more for the 
same health care. No one reinvested in the economy to give those defense 
workers something else to do, and the deficit got bigger and bigger and 
bigger.
    Now, the American people voted for change. They wanted me to try to 
rebuild the middle class both in terms of jobs and incomes, to invest in 
our own people and our jobs, to cut the deficit, to open the doors of 
education to all, and to deal with the terrible health care crisis, and 
to make a real dent at welfare reform, removing people from dependence 
and moving them to independence.
    I was sent to the White House, I think, to take on brain-dead 
politics in Washington from either party, or from both. Some, but not 
all, in the national Democratic Party have placed too much faith in the 
whole politics of entitlement, the idea that big bureaucracies and 
Government spending, demanding nothing in return, can produce the 
results we want. We know that is simply not true. There is a limit to 
how much

[[Page 790]]

Government can do in the absence of an appropriate response by the 
American people at the grassroots level. And there is a limit to how 
many decisions can be made properly in Washington. And most of our 
growth has and always will come from the private sector.
    On the other hand, some, but not all, in the national Republican 
Party have practiced the politics of abandonment, of walking away from 
common concerns like dropping test scores or rising crime rates or an 
insufficient infrastructure or taking care of the people who won the 
cold war for us and now don't have anything to do in the wake of defense 
cutbacks, and in simply insisting that as long as you don't raise taxes 
on upper income people and don't talk about it when you raise taxes on 
anybody else, everything's going to be fine. Well, that's not right 
either. We have to move beyond entitlement and abandonment.
    I ran for President basically on the same things that I found had 
worked for me when I was a Governor, not entitlement, not abandonment 
but empowerment, the idea of creating a new American community by 
offering people more opportunity and demanding more responsibility.
    I think we have made a real start at that. In the first few weeks of 
this administration we have passed an important political reform 
measure, the motor voter bill, and we have moving through the Congress a 
really tough lobby disclosure bill and a campaign finance reform bill 
that are the kind of things Wisconsin has been famous for for years.
    We have tried to support the middle class in this administration. 
Only 17 days into the administration, I signed the family leave bill to 
guarantee that people don't lose their jobs when they have to take a 
little time off to have a baby or when there's a sick parent. The 
Congress is now considering our national service legislation, which 
would open the doors of college education to all, and soon will have a 
health care program that will provide real security to working families.
    For the first time in 17 years the Congress passed the budget 
resolution, the outline of our deficit reduction plan and our plans to 
invest in the country, on time, for the first time in 17 years. And that 
helped to produce the lowest home mortgage rates in 20 years and other 
low interest rates because people believe we're trying to bring this 
deficit down. So we have made a good beginning.
    But to be fair, the hard work is still ahead. The House of 
Representatives passed my economic program last week with some minor 
modifications, many of which made them better, I thought. But the hard 
work lies ahead. All the difficulties in this world are in the details. 
We can always agree on generalities. The question is, what are the 
specifics?
    I came here to ask you to join with me in trying to tackle the three 
deficits that are paralyzing this country today: the deficit of dollars 
in our Federal budget, the deficit of investment in the private and 
public sectors, and the deficit of responsibility in our National 
Government.
    Now, let's talk about this deficit, the Government's budget deficit. 
Our country last ran a balanced budget in 1969. We haven't balanced our 
national books since then. But to be fair, the deficit was not a serious 
problem for our economic performance until 1981 when we built permanent 
deficits into our Federal Government system.
    What happened? President Reagan, in the midst of a recession, made 
what has been a typical proposal by Presidents throughout American 
history. He said, ``We're in a recession. We ought to have a tax cut.'' 
The problem was, by the time he and the Congress got through bidding 
each other up and playing to the American people's hatred of taxes, the 
tax cut was twice the percentage of our annual income that he originally 
proposed. And it was adopted anyway. Nobody really thought about what it 
would do to the structure of the Federal budget.
    And ever since then, we've been dealing with the consequences of 
that, plus increasing spending, as I said, first in defense, and then 
after defense was cut, an absolute explosion in health care costs, which 
I'll bet many of you have also experienced in your private health 
insurance premiums as well as your Government tax dollars.
    Listen to this: Over the past dozen years alone, the annual deficit 
soared from $79 billion to $322 billion. The national debt in 12 years, 
after over 200 years as a nation, quadrupled from $1 trillion to $4 
trillion. While Washington cut taxes on the wealthiest individuals, even 
after the deficit went up, we had exploding health care costs, exploding 
costs to pay interest on a bigger and bigger debt. And while the 
Government was used as a punching bag--everybody talked against big 
Government--no one

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ever really did anything fundamentally to reform the way it operates or 
rein in its unnecessary spending.
    As this deficit soaked up more and more of our national savings 
which could otherwise have been invested in private plant and equipment 
and human skills, we created a second deficit, an investment deficit. 
From the 1960's to the 1980's public investment--that is, the 
expenditure of your Federal tax dollars in education and training, in 
new technologies for new jobs, and in infrastructure, things like better 
water systems and bridges and roads and airports--dwindled from 4\1/2\ 
percent to just 2.6 percent of our annual income.
    Every time a company can't find qualified workers, every time trucks 
are rattled by highways riddled with potholes, every time a department 
store closes because a city is not safe after dark, we see the 
consequences of the investment deficit. Our income as a nation goes 
down, and we have fewer jobs as well.
    Meanwhile, national policy rewarded companies for their financial 
strategies, not their investment strategies; for making deals, not 
products; for seeking new mergers, not new markets. Business investment 
declined from 7.2 percent of our gross national product in the 1970's to 
only 5.4 percent in the eighties.
    The investment deficit also slows the growth of our workers' 
productivity. And in a market economy, people get paid by what they can 
produce by global standards. Compensation per hour, what workers earn in 
wages and fringe benefits, grew more slowly in the last 20 years than in 
the previous 100. From 1954 to 1973, hourly compensation grew at over 3 
percent per year. The more people produced, the more they earned. But in 
the last 20 years, as productivity slowed down, compensation increased 
by less than one percent per year.
    This low productivity led to higher unemployment, stagnant wages, 
and--guess what--lower tax receipts. So the deficit got bigger, because 
people weren't earning enough money to pay into the Government to keep 
the deficit down. They relate one to the other.
    This was aggravated when we cut the defense budget with no plan to 
put the defense workers back to work in the new civilian economy. And in 
some of our biggest unemployment areas, you see, from Connecticut to 
southern California, you see high-dollar scientific workers, people with 
advanced degrees and very skilled factory workers, with nothing else to 
do because there was no thought given to what these people would do once 
the defense work was shut down, even though we know there are tens of 
thousands of jobs waiting to be had in the global economy in new 
technologies, in aerospace, in electronics, in biotechnology, and 
environment cleanup, just to name four. We know those jobs are out 
there. But we know our competitors are working hard in partnership with 
the government and the private sector to develop them.
    At the same time, the exploding costs of health care and education 
put a crimp not only on the growth of average families' incomes and 
small business incomes but on the overall health of our economy. Average 
health costs per family tripled in the last dozen years. Too many middle 
class people at the same time experienced ``job block,'' that is, they 
couldn't move jobs because someone in their family had been sick. They 
had what the insurers call a preexisting condition, meaning that if they 
wanted to have their health insurance, they had to stay in the job they 
were in.
    Now, we're living in a country, folks, where the average 18-year-old 
will change work seven or eight times in a lifetime. If you can't change 
jobs in this kind of an economy, your future is dramatically 
constricted, all because we are the only nation with an advanced economy 
that hasn't figured out how to provide basic health care at affordable 
cost to all of our people.
    And look what's happened to education. In the 1980's, the value of 
an education virtually doubled. By the end of the decade, the average 
college graduate was earning twice the average high school graduate; the 
difference between what a college graduate and a high school graduate 
earned at the end of the decade was twice what it was in 1980 at the 
beginning. And yet, look what happened to college costs. The cost of 
public colleges went up by 109 percent and private colleges by 145 
percent; college drifting, drifting, drifting out of the reach of 
ordinary Americans. And the college dropout rate became more than twice 
as high as the high school dropout rate, either because people were sent 
unprepared, which was wrong, or they couldn't afford to stay, which 
happened all too often.
    Virtually every economic decision that was made in Washington, or 
not made properly, sent signals to our people that the old rewards for 
hard work and playing by the rules and responsibility were declining. 
Most of the economic

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gains of the 1980's went to people in the top one percent of the income 
brackets, and most of them were not those that were producing new 
products and services but instead were those who were producing 
financial arrangements, which exploded the cost of paperwork and didn't 
do much to create more jobs in America.
    Too many people who were at the bottom rung of the ladder and 
working hard to get out, which, after all, is where most of our families 
started somewhere along the way, found that their hard-earned wages left 
them below the poverty line and removed even more the incentive to work 
instead of to be on welfare. If work doesn't pay, why not go on welfare? 
How many times have we heard that said in the last 10 or 12 years in the 
city streets and in the rural communities of America?
    These are the things, my fellow Americans, that we have to change. 
This is a historic moment. Now that the House has passed this budget 
plan to reduce the deficit and to target investments in our future, and 
it's going to the Senate for further debate, we can make a decision to 
seize control of our economic destiny. That is why I have asked everyone 
in Washington to go beyond politics as usual, to forget about partisan 
divisions, to try to find bipartisan responsibility in place of 
bipartisan blame and irresponsibility.
    Now, the plan that I have proposed cuts $500 billion from the 
Federal deficit, the largest deficit reduction program in our history. 
It makes decisions long delayed and avoided. The plan is balanced and 
fair. About half of the deficit reduction comes from spending reductions 
and restraints on entitlements; about half comes from tax increases. 
Entitlements--that is, medical programs, Social Security benefits, 
agriculture benefits, welfare benefits, food stamp benefits, things you 
get because of who you are--those things, we rein in spending by $100 
billion over the next 5 years. We cut 200 other areas of the budget by 
more than $150 billion in the next 5 years. We cut some very popular 
programs in this country, from highway demonstration projects to rural 
electrification. But that has to be done. We cut about $47 billion 
directly out of the operations of the Federal Government: freezes in 
Federal pay, restrictions on Federal retirement, the reduction in the 
Federal work force by 149,000 people over the next 5 years.
    All of that has been written into this budget. The plan imposes new 
discipline on Government spending: no increases in taxes unless there 
are cuts in spending, and all of it put into a trust fund that must 
remain there for the 5-year life of the deficit.
    We also adopted a unique mechanism right at the end of the House of 
Representatives debate which requires every year, if we miss this 
deficit reduction target--and Congressman Obey got a bunch of charts, I 
wish he were up here showing them to you, about how the two previous 
administrations said the deficit would go down to zero three different 
times, and they never did make a target--if we miss our target, every 
year now the President is legally bound to come in and offer a 
correction in the budget to meet that deficit reduction target, and the 
Congress has to vote on it.
    Now, I lead with all this--I dare say that most of you, since all 
you've heard are about the fights on taxes, didn't know how much 
spending was cut and probably don't know what incentives are there for 
investment. I'll get to that in a minute. Some taxes are raised. No less 
authority than David Stockman, who was President Reagan's Budget 
Director, was quoted not long ago as saying, anybody, Republican or 
Democrat, who thinks you can get this deficit down without increasing 
taxes does not understand what we did to the tax system in 1981.
    Now, those are the spending cuts we had. The spending cuts are real. 
There are more than 200 of them. There are more than I recommended in 
the campaign because I didn't know in the campaign what happened right 
after the election, which is that the deficit miraculously was increased 
by $165 billion, announced by the Government before I took office but 
after the election. So we cut spending some more.
    And there are some more tax increases, too. But look how they fall. 
Seventy-four percent of the money we raise comes from people with 
incomes above $100,000. Over 60 percent of this money comes from people 
with incomes above $200,000. Now, that is not an attack on the wealthy. 
It is an acknowledgement that people in that income group had their 
incomes go up and their taxes go down in the eighties. Middle class 
people had their taxes go up and their incomes go down in the eighties. 
So we're just trying to redress the fairness of the matter.
    Now, let me tell you exactly what you will

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pay if you're a middle class American, if your family income is under 
$100,000. I had wanted, and I advocated in the campaign, tax relief for 
middle class families, especially those with children. I still want 
that, and I still intend to propose that before I'm done. But I can't do 
it now because the deficit is so much bigger than it was when I was 
making these proposals. It would be irresponsible for me to advocate a 
very substantial increase on upper incomes and not ask the middle class 
Americans to make any contribution at all.
    But listen to what it costs. First of all, for working families with 
incomes under $30,000, we have done everything we could to make sure 
that the energy tax, which is the middle class tax here, will cost 
nothing by giving an income tax credit to offset the income tax. One 
fellow out here has been heckling me and saying I'm not telling the 
truth. So I'll say, Arthur Anderson, which is a fairly reputable firm, 
hardly packed full of Democrats, has examined my program and says that a 
family of three with an income of $25,000 a year or less will actually 
get a tax cut under the Clinton economic plan as it is now. For a family 
with an income of $40,000 a year, if the energy tax passes just as it 
is, and if there are four people in the family, the bill will be a 
dollar a month next year, $7 a month the year after that, and $17 a 
month the year after that. All of the money, every last red cent of it, 
will go into a deficit reduction trust fund to bring down the deficit, 
every penny.
    Now, the question is, is it worth it? Is it worth it? And here's my 
answer to you. You may say it's not worth it, but look what's happened 
since November. First, when we announced the energy tax and the deficit 
reduction plan, long-term interest rates started to go down. Second, 
after I actually presented it to Congress in February, they went down 
some more. Now, for most of the last 3 months, long-term interest rates 
have been at their lowest rate in decades: mortgage rates at the lowest 
rate in 20 years; consumer loans down; college loans down; car loans 
down; business loans down. Millions and millions of Americans are out 
there breaking their necks to refinance their home loans and their 
business loans, so much so that the business analysts say that if we can 
keep interest rates down at this level for a year, we will put $100 
billion back into this economy in lower interest rates because people 
think we're serious about bringing the deficit down.
    What does that mean? What does that mean? Let's just say if someone 
had a $100,000 home mortgage financed at 10 percent and they refinanced 
it at 7\1/2\ percent, that would be a $2,000 saving in one year, a 
$2,000 saving in one year. In other words, there would be more than 
twice the savings in one year as this program would cost that same 
family in 4 years if it were passed exactly as it is today.
    Now, I think that's pretty good for America. If we don't do 
something to get the interest rates down, clean the debt out, and get 
control of our economic destiny, we're going to be in big trouble.
    Now, there are also a lot of incentives in this program for people 
to further save money. Let me just give you a few. Let's take a typical 
farm family in Wisconsin. The family's income net is under $30,000. They 
will be eligible for tax credits. A single-family farm under this 
program for the first time will be able to get a tax deduction for their 
health insurance premiums, something they haven't been able to do 
before. The expensing provisions for small businesses and farmers will 
allow them to write off $25,000, not $10,000, of investment now. So much 
so that the average Wisconsin farm, even after they pay higher energy 
costs and have agricultural budget cuts, will wind up with a lower bill 
rather than a higher bill if this whole program passes.
    And I think it's very important to look at the incentives here. We 
have more incentives for small businesses, an historic incentive for 
people to invest in new business, real incentives for people to put 
money into plant and equipment and hire people in America, instead of 
just put money into financial transactions or invest money overseas. 
These are incentives that will give the American people the way to lower 
their taxes by creating jobs here in America, which is what I talked 
about in the campaign. That's how you ought to be able to lower your tax 
bill.
    Now, let me also tell you that this plan invests some new money. You 
have to ask yourself whether you think it's worth it. Is it worth it for 
us to invest enough money at the national level to do the following 
things: to try to provide some incentives for companies who won't have 
defense contracts anymore to develop domestic technologies to put those 
high wage workers back to work. Is it worth it to try to provide

[[Page 794]]

jobs in America in areas where America needs work with new water systems 
and new environmental cleanup systems? Is it worth it to provide a small 
amount of money to try to see that America joins Germany, Japan, and 
every other advanced country in saying if you don't go to a 4-year 
college, at least you ought to have access to 2 years of further 
education and training so you can get a good and decent job? Is it worth 
it or not? You have to decide.
    Now, if you believe all Government spending is evil and bad, you 
would say no, it's not worth it. But if you look at our competitors and 
if you look at what works and what produces growth and the fact that it 
is clearly the skill levels of our people which will determine as much 
as anything else the economic future of America, I think you'd have to 
say yes, it is worth it. We've got too many people who are not 
competitive in a global economy today.
    One final thing: This State has always been a pioneer. People in 
both parties have always been interested, at least in my experience as 
Governor, in welfare reform, in moving people from welfare to work. One 
of the biggest problems with welfare reform is this: If you take 
somebody off welfare and you put them in a low-wage job because they 
don't have much education, they have to take that wage and pay for child 
care out of it, because they're not home taking care of the kids 
anymore, and they may not have medical insurance. And the earnings are 
so low there is a big incentive not to do it.
    This bill, this economic program, makes a major downpayment on 
welfare reform, doing what I want to do, which is to change the whole 
system and say after you get education and training, if after 2 years 
you don't have a job, you have to go to work in the public or private 
sector. This bill starts that by saying this: If you work 40 hours a 
week and you've got a kid in your house, the tax system will lift you 
out of poverty. We'll give you a tax break so that you will not be 
living in poverty if you work full-time with children in your home. What 
else could be more American, and what else would do more to end the 
welfare dependency we have in this country?
    Now, let's talk about where we are with this. This bill's going to 
the Senate now. Senator Kohl and Senator Feingold are going to get a 
chance to work on it. And everybody in America--if I said, wouldn't you 
like it if we did everything I just said but we did it with more budget 
cuts and even less tax, and you would say, yes; I would say yes. Who 
could disagree? Who could disagree? The question is, what are the 
details?
    Let me try to describe to you what's going on. When you hear all 
this stuff, that this is a tax program, this is not just a tax program. 
This is a budget cutting program. This is an investment program in your 
future. This is incentives for the private sector to create new jobs in 
ways that have never been provided before.
    You know, in this bill, if you invest in a new business and it makes 
money, and you hold that investment 5 years, you cut your tax rate in 
half under this program. That's a real incentive. Under this bill, if 
you invest money in a poor neighborhood in Milwaukee, if it gets 
designated an empowerment zone, you can get all kinds of incentives for 
private sector investment that have never been available before, ever; 
never proposed by Republicans or Democrats before to get private sector 
investment to rebuild. So there's a lot of things in this bill.
    But let's just take the rhetoric. Everybody would like to do all 
this with less tax and more budget cuts. But look behind the rhetoric. 
For example, when the House voted on my program last week, there was a 
Republican substitute. The Republican substitute purported to have the 
same amount of deficit reduction I did with no taxes and all budget 
cuts. Guess what. More Republicans voted against a Republican bill than 
Democrats voted against my bill. Why? Why? Because the Republicans who 
voted against it thought it cut too much out of Social Security, too 
much out of medical care, too much out of farm programs, too much out of 
things that are part of the fabric of this Nation's economy or part of 
our built-in obligation to one another. So they disagreed. They couldn't 
agree on that.
    Let me give you another example. Some define less tax and more cuts 
as lower taxes on the very wealthy, replaced by reducing the cost of 
living increase to Social Security recipients barely above the poverty 
line, or to people barely above the poverty line who are working, they 
want to reduce the tax credits they get.
    Let me give you another example. Others say, ``Well, just cut more 
Medicare costs. Don't give those doctors and hospitals any more money.'' 
Now, that's got a lot of appeal to a lot of people. But let me tell you 
what happens. If you cut

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Medicare costs without reforming the health care system, you can do it 
to some extent, but if you do it too much, you know what will happen? 
Every one of you who works in the private sector who has a private 
health insurance policy, will have your premiums go up as a result. 
Because if the Government doesn't pay for the care that the Government 
mandates that people get, what do the doctors and hospitals do? They put 
the cost onto private business, onto private employers and private 
employees. And your health insurance premiums soar.
    One of the reasons a lot of you are paying too much for health care 
today is that America has 35 million people with no health insurance and 
other people who are being undercompensated. And as a result of that, 
you're paying more. Because everybody in this country gets health care, 
don't they? They just get it when it's too late, too expensive, and at 
the emergency room. And you get sent the bill if you have health 
insurance. So it sounds good, but it may not be so good.
    I could give you a lot of other examples. The way words are used, 
for example, the way our adversaries calculate this, if we ask upper 
income Social Security recipients, who are getting more out of the 
system than they put in, plus interest, to pay a little more of their 
income to taxation, then that's a tax. But if we cut the cost of living 
allowance to the poorest Social Security recipients, that's a budget 
cut. Right? That's the way they define it.
    Now, but most people in this room say, ``Well, if you have to do one 
or the other, better to ask people who can pay and who are getting more 
back out than they put in plus interest to give a little more than to 
take it out of the poorest ones who are just above the poverty line.'' 
But if you get into these word games, it sounds terrible if it's tax and 
cut. It doesn't sound so bad when you talk about what it really is.
    Here are the principles that I hope the Senate will honor next week:
    Number one, we've got to cut the deficit at least $500 billion, and 
we ought to put it in a trust fund so the money can't be fooled with for 
the next 5 years.
    Number two, because of what happened in the last 12 years, any taxes 
we raise must, in the end, be progressive. Those who can pay more should 
pay more, and we should minimize the burden on the middle class.
    Number three, don't do anything to the incentive to move people from 
welfare to work. Let's go ahead and say that if you work 40 hours a week 
and you have a child in your home, you don't deserve to be in poverty. 
You've played by the rules, and we'll let you out of poverty.
    Number four, keep the incentives for small businesses, for new 
businesses, for investment in our cities, for housing incentives, for 
research and development, keep all those tax incentives in there to grow 
this economy. Don't take them out.
    And number five, when we cut spending, and we'll cut some more and 
raise some, we'll cut the taxes and have more spending cuts next week. 
But when we do it, let's leave the money in there that will shape these 
children's economic future. Let's have the money for education and 
training, for investment in technology, for help for the defense 
industries that are building down. Let's rebuild the American economy. 
Because, after all, you can cut all the spending you want, and if people 
don't have jobs and they aren't earning money, we're still not going to 
be able to balance the budget. So let's keep the economic future of the 
country uppermost in our minds.
    The last thing I'd like to say to you, my fellow Americans, is that 
none of this is going to be easy, but you should not be discouraged. 
After all, these trends, as I said, have gone through administrations of 
Democrats and Republicans for 20 years now. We are moving away from a 
set of policies that have been the rule for 12 years. I'm trying to move 
beyond a bipartisan gridlock which has existed for about a decade.
    We are trying to do it in a global economy where other rich nations 
have unemployment rates as high or higher than ours, and there's a 
recession all over the world. This is not easy, but it can be done. It 
can be done if we have the courage to change direction. And if we will 
listen and look beneath the labels to the facts, I believe we can do it. 
It is simply a question of asking what we have to do to regain control 
of our destiny, what we have to do to invest in our people, what we have 
to do to get jobs and incomes and health security back into this country 
again.
    And let me just say one last thing in closing. When I was a Governor 
for 12 years, my State in every one of those 12 years had a tax burden--
the State and local tax burden was in the

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bottom five in America. We had one of the toughest balanced budget laws 
in the country. And when I asked the people of my State for more taxes 
it was always to pay for something specific, better schools, better 
roads, more jobs, in a trust fund. I never ever dreamed I would be in a 
position in my life asking people to pay $1 just to bring the deficit 
down. But we got ourselves in this fix, folks, over a long period of 
time. And until we get our interest rates down and regain control of our 
economic future and show that we have the discipline to handle our 
affairs, it is going to be very difficult for us to do a lot of these 
other things that all of us want to do.
    These decisions are not easy, but we must make them. So I ask you 
again, encourage Senator Kohl and all the other people in the United 
States Senate, encourage Senator Feingold, encourage them all to give me 
a good budget with less taxes and more spending cuts. But remember the 
principles: make sure the money goes to deficit reduction; invest some 
in our economic future, because that's important; make sure the people 
who can pay do; don't take the welfare reform initiatives out of it; and 
remember that in the end, the private sector creates the jobs, so leave 
the incentives in there.
    And let me say this: 50 of the 100 biggest companies in this country 
have endorsed this program. I have been very moved that so many people 
in upper income groups, who are going to pay the overwhelming majority 
of these taxes, have endorsed this program, because they know that it is 
imperative to get control of our future. And I ask you, the people of 
Wisconsin, to endorse the program for the future of your children and 
our Nation.
    Thank you very much, and God bless you all.

Note: The President spoke at 12:10 p.m. in the Milwaukee Exposition 
Convention Center and Arena. In his remarks, he referred to Milwaukee 
Mayor John O. Norquist.