    [Public Papers of the Presidents of the United States: William J. Clinton (1995, Book I)]
    [May 16, 1995]
    [Pages 690-691]
    [From the U.S. Government Publishing Office www.gpo.gov]

    Remarks on Budget Proposals and an Exchange With Reporters
    May 16, 1995

        The President. First of all, I want to welcome the Members here for
    this meeting. And as you know, we're going to be discussing the budget.
    And we'll just make a couple of observations.
        I have just returned, as you know, from my trip, and I look forward
    to having the opportunity to study in detail the budget resolutions
    passed by the Senate and the House--or offered by the Republicans in the
    Senate and the House.
        Obviously, I believe that deficit reduction is good for our economy.
    It lowers interest rates. It promotes growth if it's done in the right
    way. We're using 7-year figures now. The last Congress reduced the
    deficit about a trillion dollars over 7 years, or about as much as the
    Republican proposals recommend.
        I am concerned, as I have said repeatedly for months now, about
    three things. I do not believe that we should cut Medicare deeply, cut
    long-term care for the elderly deeply to pay for tax cuts for upper
    income citizens. I believe that we have to slow the growth of Medicare.
    I am glad to hear the majority in Congress acknowledging that, after 2
    years of denying that there is a crisis in Medicare; I agree that there
    is. But the proper way to do it is within the context of health care
    reform so that we can consider the implications on the health of our
    people, the welfare of our people, as we do this.
        And the third thing I would say is that we have two deficits in the
    country that are hurting us badly. One is the budget deficit; the other
    is the education deficit. The most significant thing about America in
    the last 15 years is the stagnant wages of working people and the
    growing inequality among middle class people because they do not have
    the skills they need to compete in the global economy. So I don't think
    we should cure the budget deficit by enlarging the education deficit.
        Those are my three preliminary observations. And I look forward to
    having the chance to study this and to work with them and with the
    Democrats in the Congress to continue to bring this deficit down. We
    must do that. We all agree with that. But there's a right way and a
    wrong way to do it, and we're going to be discussing that in greater
    detail today.

    [[Page 691]]

    Budget Proposals

        Q. Senator Dodd says it may be time to drop all proposals for a tax
    cut right now and to focus instead on deficit reduction. Are you willing
    to drop your middle class tax cut proposal if the Republicans drop
    theirs?
        The President. Well, first of all, I believe that we can pay for
    something in the range that I have proposed with a dramatic--
    [inaudible]--deficit reduction. I think you could--I think we can
    achieve that. But I--I want to--that's my position, but I want to have a
    chance to meet with these folks today and hear from all of them, and
    we'll be talking more about this.
        I believe that what I recommended is the right course. I'm prepared
    to hear from anybody else who's got any other ideas. My concern is, I
    don't want to see us just jump off the deep end on Medicare cuts without
    understanding what the implications are to pay for huge tax cuts which
    we plainly can't afford and which mostly go to upper income people. I do
    not believe that we can fix Medicare unless we have some idea of how the
    system is going to be reformed and what the consequences will be. And I
    don't believe that we should be eviscerating the education budget and
    making it harder for people to go to college and stay there, for
    example.
        Now, other details and other issues--I'm going to review their
    proposals and evaluate them, and then we'll be glad to work with them
    and go forward.

    Japan-U.S. Trade

        Q. [Inaudible]--go in effect today. [Inaudible]--when you meet with
    Prime Minister Murayama you'll be able to resolve this matter and avoid
    a trade war with Japan that could affect security and other strategic
    interests as well?
        The President. I certainly hope that we'll be able to resolve this.
    And as you know, we--the way this issue works--the Trade Ambassador, Mr.
    Kantor, will announce the details of what we propose. They won't
    actually go into effect if we can avert the disagreement with the
    Japanese. But if you look at the special problem of autos and auto parts
    and how long we have labored over them and how reasonable the United
    States has been for years, even for more than a decade, I believe that
    this is something we have to go forward on. The Japanese Government has
    acknowledged that we have important security interests and other
    interests in common and that we cannot let our entire relationship be
    left by this. That is a welcome observation by them, and I agree with
    them. But we can't anymore deny this or sweep it under the rug. We've
    got to go forward; we're going to do that.

    Note: The President spoke at 9:04 a.m. in the Cabinet Room at the White
    House, prior to a meeting with congressional leaders. A tape was not
    available for verification of the content of these remarks.