    [Public Papers of the Presidents of the United States: William J. Clinton (1995, Book II)]
    [October 25, 1995]
    [Pages 1676-1679]
    [From the U.S. Government Publishing Office www.gpo.gov]

    [[Page 1676]]

    The President's News Conference
    October 25, 1995

    Budget Legislation

        The President. Good afternoon. Three years ago, I ran for President
    promising to put the American economy back on track and to cut the
    Federal deficit in half. In 1993, without a single Republican vote, the
    Democratic Congress adopted our deficit reduction plan. It was a plan
    that shrunk the deficit while investing in our people, their education,
    and the technological future of America.
        We took firm steps toward a balanced budget, but we did it in a way
    that honors our values of responsibility and opportunity, work and
    family, a strong American community, and a strong America around the
    world. We did deficit reduction consistent with our values, and it was
    very good economic policy.
        Today, America is on the move. The economy is growing. The American
    people have produced 7\1/2\ million new jobs, 2\1/2\ million new
    homeowners, over 2 million new small businesses, and the lowest combined
    rates of unemployment and inflation in 25 years. And I am pleased to
    announce today that the deficit in fiscal year '95 is $164 billion, cut
    almost in half in just 3 years. The deficit was projected to be $302
    billion, as you can see here, before our plan was adopted. It was $290
    billion in 1992. We began immediately to bring it down. It came down to
    $255 billion, to $203 billion, now to $164 billion in 3 years.
        This is the first time since Harry Truman was President that the
    deficit has actually dropped 3 years in a row. The plan has worked
    better than we projected that it would. And as the chart shows, the
    deficit reduction is for real.
        Now it is time to finish this job, to take that red line down to
    zero. We must balance the budget to take the burden of debt off of our
    children and to free up more funds for investing in our future. But we
    have to do it in the way we did it in 1993, that is in a way that is
    consistent with our values and consistent with a strategy that will
    actually grow the American economy. I have proposed a plan that cuts
    wasteful Government spending and reflects our values. It is the right
    way to balance the budget.
        By contrast, the Republican Congress is taking the wrong way. Last
    week it passed the biggest Medicare cuts in our history. They're about
    to pass about $148 billion in taxes and fees on working families and
    elderly people and low-income Americans. And their budget slashes
    education and technology. It undercuts the environment. In other words,
    it balances the budget but it still mortgages our future. That's the
    wrong way to go, and I don't intend to let it happen. If the Republicans
    plunge ahead and pass this budget, I will veto it and demand a budget
    that is balanced in a way that reflects our values and promotes our
    economy.
        Before I close, I'd like to be very clear on my determination that
    no one should toy with the full faith and credit of the United States.
    Republican congressional leaders have said they won't pass a debt
    ceiling bill unless I accept their misguided budget priorities.
        For more than two centuries, through wars and depression, our Nation
    has always paid its bills and honored its obligations. For all their
    loose talk, the congressional leaders know that if they were to allow us
    to go into default, this would have a severe impact on our economy, on
    financial markets, and on the interest rates paid by Government, thereby
    increasing the deficit; paid by business, therefore slowing economic
    growth; and paid by millions of homeowners, thereby increasing their
    mortgage rates. That is not a responsible thing to do for the United
    States, and it is certainly not responsible budget strategy. It is
    economic blackmail, pure and simple.
        The Republicans are saying, ``Either you accept what we're doing to
    Medicare, what we're doing to health care, what we're doing to
    educational opportunities, what we're doing to the environment, what
    we're doing to raise taxes on working families with incomes of $25,000 a
    year or less and children in their homes, or we'll just stop America
    from honoring its obligations for the first time in history.''
        I am not going to let anybody hold Medicare or education or the
    environment or the future of this country hostage. If they send me a
    budget that says simply, ``You take our cuts, or we'll let the country
    go into default,'' I will veto it.

    [[Page 1677]]

    Threats to our future are not an acceptable basis for good-faith efforts
    to resolve our differences.
        The most important thing about this, folks, is that America is
    moving in the right direction. The deficit is coming down. The jobs are
    going up. The crime rate is down. The welfare rolls are down. The food
    stamp rolls are down. Defaults in child support are down. The poverty
    rate is down. The teen pregnancy rate is down. Small businesses are up.
    Business failures are down. We are moving in the right direction. We
    know what strategy works. The strategy that works is to reduce the
    deficit and invest in people, invest in technology, and grow the
    economy. Why would we abandon a proven strategy that works and that will
    take us all the way to a balanced budget to adopt an extreme budget that
    absolutely shreds our values and will weaken our economy?
        We should pass the right kind of balanced budget and finish this
    job. But if people want to know what kind of balanced budget is right,
    look at the record, look at what works. We ought to do what's right for
    America.
        This country is on a roll economically. There is no nation in the
    world better positioned than the United States for the 21st century. And
    all we have to do is to honor our values, learn how to live with all of
    our diversity, and have sound, sensible policies. That's what I'm
    fighting for. And this number today shows that we're on the right side
    of this battle.
        Q. What are your options, and what do you think is going to happen
    if you do veto? Then where do we go?
        The President. Well, we'll do what we've always done in cases like
    this. I will veto, and then they'll either pass legislation that's
    acceptable or they won't. But that is their choice.
        You know, before they ever adopted a budget resolution, as soon as
    they proposed a balanced budget I proposed one. I proposed one without
    frills, one that eliminated hundreds of programs, one that continues to
    shrink the Federal Government, one that continues to invest in our
    future, and one with the kind of sensible economic assumptions that have
    characterized my first budgets. And so far, the response was, ``Well,
    we'd be glad to talk to you, but we're not going to change anything.''
    So the ball is basically in their court. They have to enact the laws.
        Yes, Rita [Rita Braver, CBS News].
        Q. Mr. President, what have you done to reach out to the Republicans
    and try to talk with them? Have you made any personal calls?
        The President. Absolutely.
        Q. Have you been rebuffed? Can you tell us what's been going on?
        The President. I don't think that going into the details of what's
    going on would be helpful. But I have--I talk--every time I meet with or
    see Republican Members of Congress, every time I talk to Republican
    business leaders, every time I talk to anybody that I think can have any
    influence in this process, I make privately and in greater detail and
    with more specifics the argument I have just made to you. So I have not
    shut the door; I have kept the door open. And every time there has been
    any kind of public discussion of this, the leaders of the Congress have
    said, ``Well, we'd be glad to talk, but we're not going to change
    anything.''
        Q. Mr. President, you went from a 10-year balanced budget plan down
    to 9 years based on improved economic conditions. Based on this, with
    this decline, can you see it going down every further? Is there any
    narrowing?
        The President. Well, the question is--let me just say, I don't want
    to get into all the complex, technical details. But one of the things
    that has caused all this difference between us is their assumption that
    if their budget is passed, we will have lower growth and lower business
    profits than we have averaged for the last 25 years.
        Now, that's amazing to me. They're saying to America, on the one
    hand, ``Support our plan. We have to slash Medicare and slash medical
    care for poor children so we can have a big tax cut and so we can
    balance the budget. But if we do it, it will give you lower economic
    growth for the next 7 years than we've averaged for the last 25.'' To
    me, that is an amazing admission by them. I don't know why they're doing
    that. But that requires them to make hundreds of billions of dollars in
    cuts in education, in technology, in the environment, and aid to poor
    children and needy elderly people that would otherwise not be there.
        So that is a big part of the difference between us. They say,
    ``Well, if you adopt this incredibly complicated Medicare plan that we
    only allowed one day of public hearings on--we have lots of time for
    hearings on other subjects, but only one day for this profoundly
    important issue--well, it will control medical costs.'' And then they
    turn around and estimate a rate of inflation

    [[Page 1678]]

    a half a percent higher than mine. That's over $100 billion dollars of
    difference between us.
        So I think it's interesting. There's a lot of extreme ideology going
    on here that is driving them under the guise of balancing the budget to
    make cuts that will undermine the ability of our Nation to honor its
    commitment, to give all children a chance at an opportunity in life, to
    honor its commitment to our parents and to our environment, to many
    other things. And I think that's something that we ought to look at.
        We have proven what works. Cut and invest works. Reduce the deficit
    but invest in our future works. That's what works.
        Q. Mr. President, politically, though--politically, doesn't this
    chart allow you now, after you cast your veto, to come back and
    compromise to something closer to the Republican 7-year model if you're
    both heading toward ground zero?
        The President. That depends entirely on what is in the budget. It
    depends entirely on what is in the budget.
        You know, my idea of what America should look like in the 21st
    century does not include denying tens of thousands of children the
    chance to be in a Head Start program or raising the cost of college
    loans or cutting the number of scholarships by hundreds of thousands or
    putting the biggest burden for Medicare changes on the seniors in our
    country who are the poorest, the eldest, and the sickest. My idea is not
    raising taxes on working families to give people in my income group a
    tax break. I just don't understand that. So it depends on what is there.
        Yes, sir, in the back.

    Canada-U.S. Relations

        Q. Mr. President, are you concerned about the possible breakup of
    Canada and the impact that could have on the North American economy and
    Canada-U.S. trade relations?
        The President. Let me give you a careful answer. When I was in
    Canada last year, I said that I thought Canada had served as a model to
    the United States and to the entire world about how people of different
    cultures could live together in harmony, respecting their differences,
    but working together. This vote is a Canadian internal issue for the
    Canadian people to decide. And I would not presume to interfere with
    that. I can tell you that a strong and united Canada has been a
    wonderful partner for the United States and an incredibly important and
    constructive citizen throughout the entire world.
        Just since I have been President, I have seen how it works, how our
    partnership works, how the leadership of Canada in so many ways
    throughout the world works, and what it means to the rest of the world
    to think that there's a country like Canada where things basically work.
    Everybody's got problems, but it looks like a country that's doing the
    right things, moving in the right direction, has the kind of values that
    we'd all be proud of. And they've been a strong and powerful ally of
    ours. And I have to tell you that I hope we'll be able to continue that.
    I have to say that I hope that will continue. That's been good for the
    United States.
        Now the Canadian people, the people of Quebec will have to cast
    their votes as their lights guide them. But Canada has been a great
    model for the rest of the world and has been a great partner for the
    United States, and I hope that can continue.

    Political Strategist Dick Morris

        Q. Mr. President, in the last few days you've probably read several
    articles about Dick Morris. Would you care to tell us about your
    relationship with Dick Morris, given all of these stories that have
    surfaced?
        The President. Well, the only thing I can tell you is that he worked
    in my first campaign for Governor, and I think he's an able man; he's a
    creative man. And when you have a long time relationship with somebody,
    you know when to listen and then you do what you think is right. And
    that's the kind of relationship I have. I listen to him, he's been
    helpful to me, and I do what I think is right.

    Budget Legislation

        Q. Mr. President, the chart you point out here today indicates that
    things have turned out a lot better than you thought they would, even a
    year ago. Why then would you propose now to go all the way to zero and
    balance the budget, which is something you did not propose to do a year
    ago when things looked a lot worse?
        The President. Because now I believe we can do the job. Keep in
    mind--look here, we're going from $290 billion to $164 billion. That's
    why I proposed to do it over a 9-year period.
        I believe that economic growth--to go back to the question that, I
    think, Brian [Brian Williams, NBC News] asked earlier, someone asked

    [[Page 1679]]

    this earlier--I think it's quite conceivable that if my budget were
    adopted just as I propose it, that economic growth could take the
    deficit down even more quickly. But I didn't estimate, that is--my
    budget is premised on the economy growing at about the same rate it has
    for the last 25 years, with the profits of our business enterprises at
    about the same level. If the same thing happens in the next 3 to 5 years
    as happened in the last 3, we would have quicker growth and a quicker
    resolution of this.
        But that's why I think we should not be pessimistic about the
    future. The more we can get this deficit down, the lower interest rates
    will be for people in the private sector; that means they'll borrow more
    money, they'll build more houses, they'll have more home mortgages,
    they'll invest in more plant and equipment, and the economy will grow
    quicker; also the lower our interest payments on our own debt will be,
    which means we'll have more funds to invest in education, health care,
    and the environment.
        So I now believe--I just didn't want to over-promise, Brit [Brit
    Hume, ABC News]. I didn't want to say that I knew we could do something
    we couldn't. I know we can take this down to balance, and we can do it
    in a disciplined way. But I have ordered--excuse me--offered a balanced
    plan that says, let's keep doing what works, and let's don't over-
    promise. And let's don't pretend that we can do things we can't do, like
    tell you right now we can jerk $450 billion out of the health care
    system with no adverse consequences.
        Q. You don't mean to be saying--take it to balance now because it
    would be easier, do you?
        The President. No. I believe--what we know, though, is that we can--
    when I ran for President, I didn't think I should make more than a 4-
    year pledge. [Laughter] And what I said was that I thought we could get
    the deficit to half what it was when I took office as a percentage of
    our income. That's been done, and it's nearly, in real dollar numbers,
    half of what it was. Now, we've had a lot of success with our
    reinventing Government program. I know a lot more about how the Federal
    Government and the budget works than I did the day I showed up here. I
    believe we can take it into balance. But we've got to do it in a way
    that permits us to invest in education, invest in technology, and do
    right by people that have a right to rely on things like Medicare and
    Medicaid.
        Q. Mr. President, you know that eventually you'll have to work out
    this budget dispute with Congress, assuming that they can't override
    your veto. Instead of going through the veto scenario and tiptoeing
    right up to default, why don't you just invite the Republican leaders
    over here and work it out ahead of all of that?
        The President. Well, let me say again, when I proposed this budget,
    before they even voted for their budget resolution, I had my hand
    outstretched. My hand has been outstretched ever since, in all kinds of
    public and private ways. Frankly, let me say, that I believe the same is
    the case of the vast majority of the Democrats in the Congress. I
    believe we'd like to have a huge bipartisan vote for the right sort of
    balanced budget.
        But at every turn, what have I been told? ``We'll be glad to talk to
    you, but we're not changing anything. If you don't change our deficit,
    we just won't pay the debts of the United States. We'll abandon a 200-
    year history of honoring our obligations to pay our debts.''
        So that really is not a question that should properly be directed to
    me. The Congress has to finish its business, and they will make a
    decision. They know exactly where I stand. They know what my principles
    are. And now the American people know that the philosophy that I have,
    the ideas that I have, the values that are in my budget also turn out to
    be very good for the economy and good for reducing the deficit.
        Thank you very much.

    Note: The President's 105th news conference began at 4:15 p.m. in the
    Briefing Room at the White House.