[Public Papers of the Presidents of the United States: William J. Clinton (1994, Book I)]
[March 15, 1994]
[Pages 454-463]
[From the U.S. Government Publishing Office www.gpo.gov]



Remarks at a Town Meeting in Nashua, New Hampshire
March 15, 1994

    The President. Thank you so much. I want to thank the principal of 
this school for calling the assembly to order and Mayor Wagner for 
welcoming me here and Senator Barbara Baldizar, of whom I am so proud, 
who served with such distinction in our campaign in 1992, and 
Congressman Dick Swett for that fine introduction and for the work he 
does in your behalf in Washington. There are many others here today, 
legislators, other officials. school officials, and personal friends. 
I'm glad to see all of you here.
    I announced my candidacy for President in New Hampshire, here in 
Nashua, in October of 1991. I told you I'd keep coming back. I know I'm 
a week late for your traditional town meeting, but I'm not 4 years late. 
I did show up.
    I have so many vivid memories of this community. I remember I was so 
nervous the first day I came here in October of '91. I said, ``Nobody 
knows who I am, nobody knows where I'm from, nobody knows anything.'' 
And we were on our way to a restaurant where some people had probably 
been dragged kicking and screaming to come and meet me for the first 
time. And on the way, there was one other cafe, and I just decided I 
would go in and shake hands there and start, just cold. And so my wife 
and I walked in, and there was one guy sitting at the counter drinking a 
cup of coffee. And he turned around and he said, ``I know who you are. 
I'm a construction worker from Leachville, Arkansas, and you're the best 
Governor we ever had.'' So I said to myself, these people are so shrewd 
up here, they will never believe I did not place this man on this 
stool--[laughter]--and that I never saw him before or since.
    I remember going to the Moe Arel Center and talking to the people 
who live there about their health care concerns. I remember in the hotel 
where I stayed last night, an early morning meeting I had with Senator 
Jay Rockefeller from West Virginia, before we had a big health care 
forum where people came from all over New Hampshire and all over New 
England. I remember so many things that I have done in this community, 
and I'm very grateful to be back.
    I've just come from Detroit, where I was meeting with finance and 
other economic officials from the G-7 nations, the world's largest 
industrial nations, Canada and France, Great Britain and Germany, Italy, 
Japan and the United States, talking about the problems that every 
wealthy nation in the world is now having, even in times of economic 
growth, in creating new jobs and raising incomes; talking about how we 
are in an entirely different global economy that is changing very 
rapidly, opening up new opportunities but also imposing new obstacles to 
the fulfillment of human potential everywhere, and what we can do 
together to deal with the problems we face.
    I learned a lot about those problems right here in New Hampshire. I 
think it is no secret to anybody who knows me the depth of affection and 
commitment I developed to the people of this State, even those who 
didn't vote for me, because of the experiences I had here in 1991 and 
1992, because of the laboratory you provided for all of us who sought 
the Presidency to learn about the continuing problems and the enduring 
promise of this great country.
    Ever since I started this campaign here, and in every day I have 
been President, I have been focused on what it will take for us to do 
what we need to do to move into the 21st century as the greatest country 
on Earth, giving our children a better future and getting our people to 
live up to their potential. I always believed that the purpose of public 
life was to get people together and to get things done and to lift human 
dignity and human potential.

[[Page 455]]

    When I first took office, my first line of business was to get our 
economic house in order. We had seen in only 12 years a quadrupling of 
our national debt. We had seen America with such a huge deficit that all 
of our trading partners every year for 10 years got together in these 
great G-7 summits and passed delicate resolutions pointing their finger 
at the United States, saying, ``If you don't bring your Government 
deficit down, you're going to wreck the world economy.''
    And so we went to work on that. Last year, Congress passed an 
economic plan that will reduce the deficit by $500 billion. If they pass 
the budget I presented this year, which passed the House in record time, 
we will have 3 years of reduction in the Federal Government's deficit in 
a row for the first time since Harry Truman was the President of the 
United States.
    Now, that has led to lower interest rates, low inflation, increased 
investments, increased activity in any number of sectors of the economy, 
and a real economic comeback for the country in 13 months, 2.1 million 
new jobs, 90 percent of them in the private sector. In the 1980's, a far 
higher percentage of new jobs coming into our economy were in State and 
local government, not in the private sector. So I believe we have made a 
good beginning. The unemployment rate in New Hampshire is about a point 
and a half lower than it was when I was elected President, and I'm proud 
of that.
    The economic plan also, as people will find out on April 15th, 
contains some very important changes in our Nation's tax laws. Yes, 
income tax rates were raised for the top 1.2 percent of income earners, 
and all the money was dedicated to deficit reduction. But almost 17 
percent of our taxpayers will get an income tax cut. Almost all of them 
will be working people with children on modest incomes. It is a very 
important thing to do to encourage people to work, to make it possible 
for them to be successful workers and successful parents, and to 
discourage people from going on to welfare. Here in New Hampshire, it 
will cover 41,000 taxpayers.
    In addition to that, the small businesses will find--and this is 
terribly important to you--this new economic plan contains several 
incentives to try to help deal with some of the problems that I learned 
about here in New Hampshire. Most of your job loss has been in larger 
companies; most of your job gains have been in smaller companies. This 
new program makes 90 percent of the small businesses in America eligible 
for a tax cut on April 15th by increasing the expensing provision for 
small business by 70 percent and provides dramatic new incentives for 
people to invest in new and small businesses, with a long-term capital 
gains cut of 50 percent for people who invest in those businesses for 5 
years or longer.
    In addition to that, we are doing a lot to try to change the 
regulatory environment in which our financial institutions make loans. 
In the end, that is the ultimate test of our success. It was here in 
Nashua that I first heard horror story after horror story after horror 
story about people having their loans foreclosed when they had never 
missed a payment. I think it's fair to say that our success record there 
has been substantial but uneven and that practices are still different 
around the country. But we are moving deliberately to try to do that so 
that we can free up capital to invest in America, to grow jobs in the 
private sector.
    A lot of your firms here in New Hampshire and throughout New England 
are high-tech firms that depend upon markets abroad as well as at home. 
We've lifted export controls on $37 billion worth of high-tech equipment 
and opened new markets through a generation's worth of trade agreements 
concluded last year, the North American Free Trade Agreement with 
Mexico, a new General Agreement on Tariffs and Trade throughout the 
world.
    And for our young people, we've reformed--as I said I would in town 
meeting after town meeting after town meeting here in this State--we've 
reformed the college loan program so that now more loans will be 
available at lower interest rates and young people will be able to pay 
them back not just based on how much they borrow but as a percentage of 
their income after they go to work, so that it will always be 
manageable, the repayment of the loans, and no one will ever be 
discouraged from going to college. Last year, the Congress passed the 
national service program that I talked about in all the town meetings 
here. This year, 20,000 young Americans will be able to serve their 
communities, solving hard, concrete, human problems at the grassroots 
level, and earn credit against their college education. Year after next, 
100,000 young Americans will be able to do that, and I am proud of that.
    The first law that I signed into being that was really the product 
of my campaign was the

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family and medical leave law, a law that had been twice vetoed before I 
became President. Just yesterday in Detroit, I met a woman in a plant I 
visited who came up to me with tears in her eyes and said, ``I have 
already taken advantage of the family leave law. It matters; people 
should not have to lose their job to take care of their children or 
their parents.''
    So we are changing the country together as a result of the campaign 
which began in these dialogs in New Hampshire. This year, the Congress 
has a full schedule. First, we are trying to enact a new crime bill that 
is both tough and smart, building on the passage of the Brady bill last 
year, to put another 100,000 police officers on the streets not only in 
big cities but in small towns, to take assault weapons out of the hands 
of criminals, to try to make sure that we punish serious offenders more 
severely but that we give first-time youthful offenders another chance 
and something to say yes to in life as well as something to say no to, 
and that we provide drug treatment on demand to deal with the fact that 
an enormous percentage of these crimes are the direct result of the drug 
problem.
    We are trying to pass, in addition to the crime bill, a dramatic set 
of improvements in education laws, a school-to-work bill that will 
provide at least another year first and then 2 years of training for 
people who don't want to go to 4-year colleges but need further 
training, people like those whom I met with at the graduation at New 
Hampshire Technical College last May. This is a dramatic thing. The 
unemployment rate for people who have 2 years of post-high-school 
education in America today is 5.7 percent. The unemployment rate for 
high school graduates is about 7.5 percent. The unemployment rate for 
high school dropouts is over 11 percent. It makes a huge difference.
    We are attempting to reform the entire unemployment system to change 
it to a reemployment system, to consolidate the programs and put 
unemployed people to work in new training programs as soon as possible. 
We're trying to give our school systems incentives to reach world-class 
standards with grassroots reforms and give them the support they need to 
do it. All these things are on the plate this year. We're going to try 
to pass a comprehensive welfare reform bill that will end the welfare 
system as we know it and give people a chance to move to independence.
    Finally, we are determined that this will be the year when finally 
America will join the ranks of other advanced nations to provide 
comprehensive health care to all of our citizens. [Applause] Thank you.
    There is one of your citizens here in New Hampshire to whom we owe a 
special debt of gratitude, and I want to acknowledge him today, and 
that's Dr. Everett Koop, who was, as all of you know, Surgeon General 
under President Reagan and who lives here in New Hampshire and who works 
here and has been of enormous help to the First Lady in the work they 
have done conducting forums throughout the country, trying to get 
doctors and nurses and medical centers involved in developing this 
health care plan and making sure it will work. He has played a major 
role in that, and I am very grateful to him for that.
    You may have seen in the press reports, my wife was out in Colorado 
yesterday and had huge crowds of students at Boulder with big signs 
saying, ``Give 'em health, Hillary.'' Make no mistake about it, some of 
the people who are giving me hell in Washington are doing it so I can't 
give you health. But I'm going to try to give you health and take 
whatever it is they want to give me in return for making sure you get 
what it is you're entitled to.
    Now, I'm anxious to answer your questions. But let me just make a 
point or two about this. New Hampshire has a lot of strengths in terms 
of the health care you already have that many other States don't. And so 
you may say, ``Well, what's in this for us?'' You have, for example--
only about 5 or 10 percent of your people don't have access, physical 
access, to good medical care. Most States as rural as New Hampshire have 
a far higher percentage of people who don't even have access. You have 
one of the finest immunization programs in the country. You've already 
done a lot of what the rest of the country needs to do in community-
based mental health services. There are a lot of things that you can be 
very proud of. You have a higher percentage of your people who are 
insured and therefore a lower percentage of your people who are 
uninsured.
    So you say, ``Well, what do we get out of this?'' First, there will 
be no more uncompensated care, so the people who are providing health 
care will have some reimbursement because everybody will have insurance. 
Second, the people who are covered by Medicare but

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aren't poor enough to be on Medicaid, the kind of people I met at the 
Moe Arel Center, will, for the first time, have access to prescription 
medicine. And we'll phase in support for long-term care over and and 
above and in addition to nursing home, so that there will be some 
support for in-home care or community-based care.
    This is very important. The fastest growing group of Americans are 
people over 80. And more and more people over 80 are quite vigorous and 
quite able to live good and full lives but may need some support. Over 
the long run, if you look at the population trends in this country, 
where we are going with our age groups, over the long run we will save 
money if we provide a broader range of long-term care support and enable 
people to be as independent and as strong as they can for as long as 
possible. You will benefit from that.
    The other thing I think is terribly important--I had a wrenching 
encounter at the hotel this morning, just before I left to come over 
here, where a woman came up to me with tears in her eyes, just crying, 
and she said, ``My husband just lost his job, and we have preexisting 
medical conditions in our family, and I do not know how we are going to 
get insurance.'' Even if you have insurance today, the only people who 
know they can't lose their insurance are people who work for employers 
that aren't going out of business and aren't ever going to lay anybody 
off. Everybody else is at some risk of losing their insurance, until you 
get old enough to get on the Medicare program. And that is a serious 
problem, because we have--I don't know how many people I've met in this 
State--we've got millions of Americans who have someone in their family 
who's been sick before and have a preexisting condition and therefore 
either can't change jobs for fear of losing their health insurance, 
can't get insurance now because they've fallen through the cracks, or 
pay higher rates. So even here in New Hampshire, I assure you, there is 
something to be gained from having a system in which everyone always has 
some basic health insurance.
    We are going to work very hard to make sure we don't mess up what 
you're doing right here and give the States the flexibility they need. 
But we still deal with the fact that we have not solved this problem as 
a country. And I can tell you that we will never get the deficit erased, 
we will never balance the budget, and we will not restore long-term 
health to this economy or security to our people until we face this 
problem.
    So these are the things that are going to gather the attention of 
the country this year. And they will command the attention of the people 
of New Hampshire. I hope you will continue to debate and discuss them. 
And let me say again, as I open the floor to questions, this is the way 
I think public life ought to be conducted. I love the town hall meetings 
I had in New Hampshire in 1991 and 1992. And I never fail to be inspired 
by the fact that they were so different from the tenor and tone of 
political debate and discussion in the Nation's Capital--my guess is 
they still are--not because there were no debates, no arguments, no 
disagreements but because they were about big things. They were about 
you, your future, and your children, and that is, after all, what we 
ought to be about. Thank you very much.
    Is this on? Questions? How are we going to do this? First of all, 
let's identify the microphone holders. Who's got the mikes? Stand up; 
raise your hands. All right, I'll tell you what. I think we will do--
I'll just start over here, and we'll just go around the room and then 
turn around and go back again. Why don't you pick someone?

Community Service Programs

    Q. President Clinton, with the new community service bill giving 
money to individual States, how would a city like Nashua be able to 
receive funding, and how could individual groups get involved in this?
    The President. Well, each State will have the opportunity to certify 
a community service group. So if, for example, if you've got a community 
service group in Nashua where young people would like to do work before, 
during, or even after college and earn credit for education, $4,750 a 
year while being paid to do the work a very modest amount, then you just 
have to have your group certified. It's nonbureaucratic, it's done at 
the grassroots level, and each State has a community service operation 
that is related to the national community service effort.
    So that's all you have to do to get approved. Then you get approved, 
then you say how many people you want, who want to be in the community 
service program and want to qualify for the aid, and then we just have 
to--we will fill

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up the slots every year, basically as the approvals come in, and 
everybody will be approved until we run out of positions. We've got 
20,000 positions this year; we'll have 100,000 positions the year after 
next. I hope that this thing becomes so popular that we'll get up to a 
half million a year. That's my goal. I hope we'll have a half million 
young people every year in community service projects, earning credit 
against their education. If we do, we will solve an enormous number of 
problems in this country with no big Government bureaucracies but with 
the power of people at the grassroots level. So we're going to try to 
keep it very nonbureaucratic like that.

Health Care Reform

    Q. I wanted to ask what would happen to someone in the health plan 
that has insurance already but exhausts it because of preexisting 
conditions. How will they benefit from your program?
    The President. If you have insurance now--what did you call it?
    Q. It's exhausted?
    The President. It's exhausted?
    Q. Well, mine isn't at the time, but I'm worried about it in the 
near future.
    The President. You're worried about running up against the limits.
    Q. Exactly.
    The President. Yes. About three-quarters of all health insurance 
policies have what are called lifetime limits, which means if you get 
real--maybe there's an aggregate amount of $1 million, let's say, so 
that you could lose your health insurance under your existing policy, 
even if it's a good policy, if you get real sick. Now, a lot of 
insurance companies under the present economic setup feel like they have 
to do that because they're relatively small companies, they have a 
relatively small number of people insured, and they just don't think 
they can afford it.
    Under our system, we abolish lifetime limits and we end 
discrimination against people for preexisting conditions, but we don't 
bankrupt insurance companies writing health insurance, because we also 
go to something called community rating. I want to level with you about 
this, because some of you will pay a little more. Basically, young, 
single workers will pay a little bit more for their health insurance so 
that older people and families with preexisting conditions aren't 
discriminated against. But that's very important because you're going to 
have people in their fifties and sixties changing jobs in this 
environment. I met a man from upstate New York the other day who had a 
job in a defense company for 29 years. He was 59 years old; he changed 
jobs and went to work for a hospital. So we're going to go to something 
called community rating, which means people will be insured in very 
large pools, and that's how we'll be able to afford to guarantee that 
you will not come up against your lifetime limits. There will be no 
lifetime limits, without bankrupting the insurance industry; everybody 
will be insured in great big pools. It's much fairer.
    Young, single, healthy people will pay slightly more but not a great 
deal more, and it will permit us not to discriminate in rates against 
older people and people who had an illness in their family.
    Q. I'm a resident of Nashua, New Hampshire. I have a comment and 
then a question. The comment is--and I'm 68 years old--Whitewater is for 
canoeing and rafting. Shame on those who would detract and distract from 
the important work you're doing with universal health coverage and jobs. 
And now my question. I have a former husband and two sons with major or 
chronic mental illnesses. I'm a member of the Nashua Alliance for the 
Mentally Ill. I've been on the board of the New Hampshire Alliance for 
the Mentally Ill, and I'm a member of the National Alliance for the 
Mentally Ill. And I would like to join Rosalynn Carter and Betty Ford in 
asking and urging that we pass parity for people with mental illness in 
the health bill that you're proposing, now, not in the year 2001. And 
finally, I'm also a volunteer the Nashua's new one-year-old Neighbor To 
Neighbor Clinic, which provides health care for those who have no 
insurance. We want to go out of business, and we need your help.
    The President. Bless you. Let me also say that in regard to the 
mental health comment you made that in addition to Rosalynn Carter and 
Betty Ford, that position is most strongly urged in our administration 
by Tipper Gore, who is a real mental health advocate and has done a 
wonderful job on this issue.
    Let me explain what the problem is to everybody else. This health 
care plan basically has a guaranteed set of benefits, which means that 
every plan after this, if you have a plan that gives these benefits or 
gives more, you won't

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be affected. If you don't have any insurance or your insurance doesn't 
provide some of these benefits, then the benefits would have to be 
included if the bill passes. The principal new things we do that 
oftentimes aren't in health care plans are primary and preventive 
things, tests like cholesterol tests or mammograms or things like that, 
things that we believe save a lot of money over the long run, primary 
and preventive care.
    We also begin to phase in alternatives to nursing home and long-term 
care, as I said. And we phase in full parity for mental health benefits, 
as she noted, up to the year 2000. The mental health community says, and 
by the way, I think they're probably right, that you ought to start with 
full mental health coverage as soon as all other coverage is phased in. 
You know, if it takes 2 or 3 or 4 years, whenever you put all the other 
stuff in, put mental health in right then and you will probably save 
money on it.
    Now, let me just explain what the problem is, because, in principle, 
I agree with you. But any bill I pass--any bill the Congress passes, as 
Congressman Swett can explain, has to have a price tag on it that has 
been certified by the bipartisan or nonpartisan Congressional Budget 
Office. They have to say, ``Here's how much the bill will cost, here's 
how it's going to be paid for, and here's why it won't increase the 
deficit.'' That's the law under which we're operating now.
    The problem is that under the budget rules, no one knows--we know 
how much mental coverage will cost, but we don't know how much it will 
save. So, to try to get full parity, we went--I didn't--the First Lady 
and her group went to 10 different actuaries to try to get the best 
possible figures we could get on what mental health coverage would cost. 
And we couldn't ever get a consensus that the Congressional Budget 
Office would buy. I'm not trying to paint them as the bad guys, by the 
way. They're not the bad guys; they just don't know.
    So what we may have to do is to start off with the mental health 
benefits phased in, then show what the costs are of the new things we're 
doing, and if they're lower than they're projected to be, then we can 
accelerate the time in which the full coverage comes in. That's the only 
possibility that I see right now because of the budgetary problem we 
have.
    And this is a problem, by the way, we face in lots of other areas 
where we're doing something we know will have a good benefit, but we 
can't prove it. I'll give you another example so it might be clearer to 
you. When we passed the North American Free Trade Agreement for trade 
with Mexico, everybody said it would increase trade with Mexico and jobs 
in the short run. Everybody said that. Even the people that weren't for 
it thought it would increase jobs in the short run. But we had to count 
it as a net negative for the budget because we had to reduce tariffs 
which weren't coming in. So we counted all the losses; we could count no 
estimated gains from increasing sales. So if some company from New 
Hampshire sells more in Mexico, it earns more money and pays more 
Federal income tax, right? We couldn't count any of the estimated 
increase in Federal income tax; we had to count all the losses.
    That's what happened in mental health, which is the problem I'm 
facing. If we can figure out a way around it, we'll try to accelerate 
the coverage. But it's a budgetary problem. You're absolutely right. It 
has to be done, but better it be done in 2000 than not at all. And I'll 
try to figure out how to do it quicker.
    Who's got the mikes here in this column here? Let's do a couple 
here.

Unemployment

    Q. The job training concept proposed for the unemployed and welfare 
participants, in principle, is an excellent idea. However, currently 
there are a large majority of recent college graduates, myself among 
them, who are underemployed. What does your administration plan to do 
about broadening the middle tier of the job market so that there will be 
jobs for those who complete your job training programs, as well as job 
opportunities for college graduates?
    The President. I think there are two things that we have to do. 
First of all, I should have said this earlier, even though 30,000 new 
jobs have been created in New Hampshire, almost all in the private 
sector, in the last 13 months, it would take about another 20,000 jobs 
to get you back to where you were in 1988 or 1987 with the growth in 
population. The truth is, we're going to have to have more jobs created 
here. But I noticed--I don't know if I still have it--there was a column 
in the Manchester newspaper, which is not exactly the house organ of the 
Clinton administration--[laughter]--talking

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about how many new jobs are coming into the State, particularly in the 
southern part of the State and particularly with smaller businesses. So 
I think the truth is, for young people with no previous experience to be 
able to get into a good job market, we're going to have to have probably 
about 15,000 or 20,000 more jobs created here. But I think we're well on 
the way to seeing that happen.
    The second thing that I'm trying to do--we had a job training 
conference in Washington, and then we had this meeting in Detroit 
yesterday where I'm trying to make a real plea in this environment 
against age discrimination on both ends. In other words, there are a lot 
of people who won't hire young people because they only want to hire 
people who have had experience. Well, how are the young people ever 
going to get any experience if nobody ever hires them? And there are a 
lot of people who don't want to hire older people because they say 
they've got too much experience, they're too old. But if you're going 
to--in the environment we're in, where the average person will change 
jobs eight times in a lifetime, we are literally going to have people 
changing jobs in their sixties. So employers are going to have to have a 
whole change in attitude about who is a potential good employee. I think 
that's something we're really going to have to talk through as a country 
and deal with.
    But the most important thing we can do is just try to keep 
generating more jobs, because that's how--because younger people without 
previous experience have a tougher time breaking into the markets if 
there are still people 10 years older who are unemployed from the last 
recession. We're getting there, but we're not quite there yet.

Health Care Reform

    Q. I'm a recovering Republican. [Laughter] We made you the 
``Comeback Kid'' a few years ago, and we hope to send that message from 
this town meeting to Mr. Dole and his friends in the media, that we're 
very focused, the people are very focused. We're concerned with jobs and 
health care. And my question is very focused on health care. My 
husband's job just changed to HMO's, and they chose for us the doctors 
that we would see. I had to leave the doctors in Salem and go to 
Massachusetts to where the HMO was. In your health care plan, will I 
have more freedom to choose and maybe go back to my own doctors that 
I've used, a specialist I've used for my son who is disabled and myself, 
than I do now with this HMO?
    The President. Yes. The short answer is yes, but let me explain. Let 
me try to explain. The short answer is yes, but let me try to amplify it 
a little bit because I don't want to be misleading in any way. If we do 
nothing, if we walk away one more time from this health care crisis, 
what's going to happen is more and more employers will turn to HMO's 
because they have to to pay their medical bills, because the cost of 
medical care is going up 2 and 3 times the rate of inflation. Many of 
these HMO's will do an excellent job and will be widely supported and be 
well and warmly received. Some of them will be not so well received 
because people either won't want to give up their personal physicians or 
especially if they've had--you mentioned you had a son with a special 
problem--if they've had someone that required special treatment, they'll 
have a particular anxiety about that.
    Now, if our plan were to pass as it is today, here is how your 
situation would be different. Your employer could choose to do work with 
the HMO and could point out that the HMO would provide all the services 
required in the health care plan and could even provide a discount for 
it, that is, could give you a financial incentive to do it. Under our 
plan, every year you would be given at least three choices, at least 
three choices: this HMO; some other plan, let's say a PPO, a group of 
doctors get together and offer their services and maybe would let any 
other doctor, including your doctor, sign on if he would agree to give 
the services at the same price; and then strict fee-for-service 
medicine, the situation you have now. You might have to pay a little 
more, but your employer would still have to make a contribution. So you 
would have those choices.
    In addition to that, we are trying to set up in our plan the 
situation where, if someone has a specialist like you do for a special 
problem, if the specialist will provide the service for the same price 
that the HMO specialist will provide it, then the specialist should be 
able to provide that even if you go to the HMO. So you could maybe do 
the--[applause]--so you could maybe get a compromise. We're working on 
that.
    But I don't want to kid you. The employer would still have the 
option to pick an HMO, and that would still be a less expensive option

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than the fee-for-service. But you would be able to get the fee-for-
service, and your employer would have to make the same contribution to 
that plan as he or she would to the HMO. So you would have much more 
choice than you have now.
    Right now--I think it's important that everybody understand this--
right now, most people who have insurance are insured in the workplace, 
and only about half, actually slightly fewer than half have any real 
choice of providers today who are insured through the workplace. So the 
amount of choice is going down.
    Now, as I said, there are some very, very good HMO's. New England 
has some very good HMO's that have done a terrific job. But a lot of 
people want to have the choices. Under our plan, we will promote and 
facilitate the growth of good HMO's because there will be economic 
incentives for people to compete for lower cost but higher quality 
medicine. But we will protect the choices people have, which are 
vanishing at a very rapid rate today. We're really trying to work out 
the specialist problem, because that's the thing people are most 
traumatized about. Someone has been taking care of a family member with 
a special problem and have to give it up; it's really tough on them.
    Q. I come from a town called Amherst, where I'm a distinct minority, 
I'm a Democrat. [Laughter] And my husband and I have just become editors 
of a small newsletter, and we sent you a copy to the White House, as a 
matter of fact. I'm concerned about health care because I'm one of those 
people with lots of preexisting conditions and my husband is a contract 
engineer and insurance doesn't come with his job. I'm afraid when I hear 
news reports of you having to compromise to get this bill through 
Congress. I'm afraid that one of the things you may have to compromise 
on is people like me. Is that so?
    The President. No, there will be no compromise on everybody being 
covered. There's no point in doing it if we're not going to cover 
everybody. There is no point in doing it if we're not going to cover 
everybody. But what I want you to understand, I want every one of you to 
understand that there are consequences to all human behavior, including 
inaction. We all know that, but sometimes we forget it.
    If we do not act, certain things will happen. Some of you will go 
into HMO's and you'll be very well satisfied and you'll get good health 
care at lower costs. Some of you will go into HMO's and you'll lose your 
choices of doctors and you'll feel that the quality has suffered and 
you'll be frustrated and angry. Some of you will lose health coverage, 
because every year we lose about 100,000 people a month in the United 
States who lose their health insurance permanently. And every year, at 
some point during the year, there are over 50 million of us who don't 
have any health insurance.
    So what I want you to understand is I won't pretend to have all the 
answers; I don't pretend that we're right about everything. This is a 
complicated subject. But there are consequences to every course of 
action, including doing nothing. And they are quite significant, the 
consequences of doing nothing.
    It also means, to go back to the lady over there, it means no mental 
health coverage; it means no medicine for people on Medicare but not on 
Medicaid; it means no medicine for working families who have health 
plans that don't cover medicine now, may have kids with high medicine 
costs.
    So the one thing we have to do is to find a way to cover everyone, 
which means you can't lose your coverage because you have preexisting 
conditions. And in my judgment, it means that people who work for small 
businesses or who are self-employed should have access to insurance at 
more or less the same rates that those of us who work for Government or 
big companies do. I don't think people who have access to the Federal 
plan--which is terrific by the way; it's a cafeteria plan. Any of you 
who are Federal employees, you know that. I mean, we've been able to 
manage our costs. Some of our plans have even gone down in price this 
year. We have all these choices. I don't think people who work for the 
Federal Government who don't know anybody else or talk to them can 
possibly imagine the level of insecurity that grips people that don't 
have this level of certainty. That may be one of our problems now in 
Washington.
    But the answer to your question is, if we're not going to cover 
everybody, if we can't find a way to find universal coverage, there is 
no point in doing this. That's what I said in my State of the Union 
speech. I'm very flexible; a lot of people have good ideas. A lot of 
people have better ideas, perhaps, than I do on certain things. We may 
have to be flexible to pass a plan around the edges. But we have to 
provide

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coverage for everybody. Otherwise we haven't done what we set out to do.
    Q. Mr. President, I have a certificate of appreciation from you for 
being in the Marine Corps, and I was wondering if you could sign it for 
me.
    The President. You bet. I'd be honored to do it. I might say--I like 
this guy. He meant sign it right this minute, no delay. [Laughter] Thank 
you for your service, Corporal.

Foreign Aid

    Q. First of all, Mr. President, I'd like to thank you for your 
accomplishments in the past year. I think we all appreciate it. And my 
question is pertaining to foreign aid. I'm a little puzzled as to how we 
can be sending such large figures out in foreign aid, for instance, $300 
million per year to Israel, when we need funding for our own domestic 
programs for our own people and for deficit reduction.
    The President. Let me say, first of all, I don't want to hedge this, 
I want to try to disagree with you, and I want to tell you that I have--
this is something on which I have changed my mind more since I have 
become President than before. And I want to try to explain why. But let 
me first say that even though we give quite a lot of money in foreign 
aid, it is a tiny percentage of our overall budget, and the United 
States gives a far smaller amount of its public money in foreign aid 
than any other Western country. All the major European countries and 
Japan give a higher percentage of their budgets to foreign aid than we 
do. We give less than others. Now, in our defense, that's because we 
spent more on national defense defending the whole world during the cold 
war. So we spent a bigger percentage of our income on defense than any 
of those countries. So we did more.
    But let me explain why, if I might. If we can, through the judicious 
use of this aid, succeed in making peace between Israel and the PLO, the 
Palestinians, the Syrians, the Lebanese, the Jordanians, we will remove 
the huge possibility not only of another war, which could send a lot of 
children from New Hampshire off to fight, but also of spreading 
terrorism and weapons of mass destruction arising out of that troubled 
part of the world.
    Give you another example: Turkey is a very important country to the 
United States. It's a tough issue. Every time--we have a system which 
says the Turks and the Greeks don't get along, so we give them both 
money at the same time. And they are very important to us, both of them, 
but they don't get along with each other. But Turkey is a secular Muslim 
country, that is, it is not a fundamentalist country. They have allowed 
us to try to save the Kurds when we went to war in the Persian Gulf; 
they helped to support us. By a modest amount of money there, if we can 
continue to relate to those people and support economic growth and 
opportunity there, they may save another war 4 or 5 years hence.
    If we can help to build the economies of the democracies in Latin 
America, we spend a little bit of money to support democracy there, then 
all those countries may wind up buying products from New Hampshire and 
New England and creating jobs for us. We're going to have a Summit of 
the Americas in December in the United States, and all the heads of all 
these democratic countries in Latin America are coming up. They all want 
to be our trading partners. They want to buy more from us. They don't 
ask much from us, a tiny amount of support for doing that.
    So can you waste money on foreign aid? You bet we can. Do we have 
higher priorities here at home than a lot of things we may do? Yes, we 
do. Do we need to spend some money on foreign aid in order to protect 
our security interest and our economic interests long-term and diminish 
the threat of terrorism and the spread of weapons of destruction? I 
believe we do. And I see it now much more clearly, in all candor, than I 
did when I was a candidate running. Sitting in the office, I have a 
totally different view of it than I did before I came.
    Go ahead. We'll take one or two more. The principal called the 
assembly to order and can call it off, I think.

Deficit Reduction

    Q. I've heard you speak about the decline in the deficit over the 
last 3 years. My concern is that, as we go further into the nineties, 
the projections are for it to start to increase again. I've been very 
taken with the Concord Coalition, with New Hampshire's own Warren Rudman 
and Paul Tsongas and their proposals. I would heartily hope that you 
would work to continue to reduce the deficit and not reverse the trend 
that you have started.
    The President. Thank you very much. Let me just make a comment about 
that. You're abso-


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lutely right about that. Let me try to explain or amplify on what you 
just said. The estimates are that if this budget that I have now 
presented to the Congress passes, we will have 4 years of declining 
deficits in real dollar terms. If they adopt this budget, it will be the 
first reduction not only in defense spending but discretionary domestic 
spending since 1969 that I have presented. Don't ever let anybody tell 
you the Democrats are the big spenders. I've asked them to cut spending 
over last year, the first time since 1969.
    Now, it does start to go up. And Senator Tsongas and Senator Rudman 
and Pete Peterson and the Concord Coalition group, what they believe we 
should do is to do something to restrict the increases in expenditure on 
Social Security, which are growing, as well as on Medicare and Medicaid. 
But let me explain to you why I think we should deal with the health 
care issue first.
    Social Security expenditures are about the same percentage of 
Federal spending as they were 20 years ago. There is a cost of living 
increase associated with Social Security, but it's been more than 
covered by the increases in the Social Security tax. So here's what your 
budget looks like. Defense is going down; all the domestic programs are 
flat. That means if I propose spending more on education and more in new 
technologies for former defense firms to make money in commercial 
enterprises, I have to cut a dollar in something else for every dollar 
I've put in there. So, no increase in discretionary nondefense spending; 
a decrease in defense spending; Social Security is going up, but at the 
rate of inflation, and the revenues are covering it, the Social Security 
tax.
    So what's going up? Well, interest on the debt is going up, but at a 
slower rate now because interest rates are down. The thing that's going 
up now and the only thing really going up in the whole Federal budget is 
Medicare and Medicaid, going up in 2 and 3 times the rate of inflation. 
And the reason for that is that people are being constantly--pressures 
are being constantly dumped into those programs because we don't cover 
everybody and we have no system to bring health care costs in line with 
inflation. So I believe the next big step, if you want the deficit to 
keep coming down, is to try to bring that problem under control.
    The Congressional Budget Office, even though they disagreed with our 
cost figures in the first 3 years, say that 10 years from now our health 
care plan will be saving the Treasury $150 billion a year, a year. So 
you're absolutely right, if we don't do something else, we can't keep 
the deficit coming down. I think the next something else should be the 
health care.
    Yes, there's a gentleman over here. I don't want him to think I was 
stiffing him.
    Q. Mr. President, I want to apologize to you. I do not have a 
question, but I want to tell you--when my many friends over in the 
southwestern part of the State--you're on the right track. Don't let the 
people on the other side of the aisle give you all that rhetoric. 
They're all running for office, and you're going to come out on top in 
the long run.
    The President. Bless you. Thank you all very much. We've got to 
quit. Thank you.

Note: The President spoke at 9:55 a.m. at Elm Street Junior High School. 
In his remarks, he referred to Pauline Caron, the school's principal; 
Mayor Rob Wagner of Nashua; and Barbara J. Baldizar, New Hampshire State 
senator.