    [Public Papers of the Presidents of the United States: William J. Clinton (1996, Book I)]
    [January 9, 1996]
    [Pages 18-21]
    [From the U.S. Government Publishing Office www.gpo.gov]

    The President's News Conference
    January 9, 1996

    Budget Negotiations

        The President. Good afternoon. As you know, we have just completed
    another long meeting with the Republican and Democratic leaders in the
    Congress. We have arrived at a point where, clearly, all sides have
    agreed on more than enough cuts to both balance the budget in 7 years,
    according to the Congressional Budget Office, and allow a modest tax
    cut. A final agreement on the balanced budget, I believe, is clearly
    within reach.
        Unfortunately, the talks have not yet succeeded because we do still
    disagree on the level of cuts in the programs of Medicare, Medicaid, aid
    to poor children, the earned-income credit, which protects the hardest
    pressed working families, and education and the environment. The
    Republicans still want cuts in Medicare and Medicaid that we believe are
    well beyond what is necessary to balance the budget and cuts in the
    discretionary account which funds education and the environment that we
    believe are excessive and beyond what is needed to balance the budget or
    to provide a reasonable tax cut.
        Still, I want to emphasize that we made progress today. The
    atmosphere was good. It was a genuine bipartisan effort. We are moving
    closer together on the spending numbers. At the opening of the meeting,
    we moved and made an initial offer to them. We are clarifying areas of
    policy agreement as well as the areas of disagreement. And today we
    agreed to a recess to last no longer than until next Wednesday, during
    which time our staffs will work directly to clarify the agreements as
    well as the remaining areas of disagreement, and hope to find some new
    ideas to bridge the gap which remains.
        I also would say, right at the very end of the meeting I left all
    the parties with a proposal which could possibly bring this to a
    conclusion. And I asked both the Democratic and the Republican leaders
    to consider that proposal.
        Over the last year, I've worked hard to find common ground on this
    issue. At the start of the process, I said the Republican Party and the
    Democrats and I shared a common goal to balance the budget. And I agreed
    that we also ought to have at least a modest tax cut

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    targeted to middle class families. I was determined to reach this goal
    in a way that reflects our fundamental values: our duty to care for our
    parents and our children, our commitment to provide opportunity for all
    Americans, to invest in education, and to protect the environment for
    the future.
        In June I announced a balanced budget plan that offered a modest tax
    cut and protected Medicare and Medicaid, education and the environment,
    without raising taxes on working people. Then the congressional
    Republicans said that the plan took too long and asked me to do it in 7
    years. In an effort to find common ground, I went back to work and cut
    several hundred billion more dollars out of the budget and presented a
    7-year budget. Then, because we disagreed on certain assumptions in the
    budget--primarily affecting the last 3 years, I might add--they asked me
    to agree that in the end we would have to have a budget that met their
    assumptions. I agreed to that, as long as the budget protected Medicare,
    Medicaid, education, and the environment and did not raise taxes on
    working people.
        Then some of those in Congress said they wanted me to present such a
    budget. So after our negotiations had gone on for some time, I did that.
    When I presented that budget, which was prepared by Senator Daschle, it
    did highlight the differences between us, because it does have smaller
    cuts in Medicare and Medicaid and education and the environment. There
    is no tax increase on the hardest pressed working families. And the tax
    cut is a smaller one and more carefully targeted to middle class
    families. But clearly, it balances the budget in 7 years, and the
    Congress and the Congressional Budget Office agreed.
        I want to emphasize that I want to do this. And I ask all of you to
    remember that the deficit has already been cut in half in just 3 years
    from what I found when I came here. This administration has the
    credibility of its actions behind its plan. I hope that we can reach
    agreement. There is still about a hundred billion dollars' difference in
    the cuts that the Republicans want us to make in Medicare, Medicaid, aid
    to poor children, and the earned-income tax credit for working families
    that we believe are not necessary. We are trying to work through that.
        It seems to me clear that--and as I've said this many, many times--
    sooner or later a decision has to be made: Are we going to balance the
    budget and provide a modest tax cut, or are we going to fundamentally
    weaken the guarantees inherent in the Medicare and Medicaid programs and
    change policies dramatically and provide a tax cut that, in my view,
    cannot be justified by the circumstances in which we find ourselves? So
    that is where we are today.
        Let me say again, we moved closer together today. I made a move
    toward them, and then at the end I made a proposal, then asked them to
    consider it. I hope that we can continue to make some progress. I will
    say again, we have agreed on several policy areas in the Medicare
    program, for example. The most important policy we can adopt is one
    which gives more incentives for people to move into managed care
    programs without forcing them to do so. I've been for that since 1993.
    We are in complete agreement on that. And the Medicaid program--we've
    agreed that the States should have more flexibility to get people into
    managed care, to find ways to save money on the program so that they can
    expand coverage to others who don't have it. We're in agreement on that.
    And we can agree on a balanced budget with a tax cut if we don't hold
    either goal hostage to an excessive tax cut or to excessive cuts in the
    priorities that are very important to our future.
        So I want to keep working together. I think we did; we've covered a
    lot of ground. We have certainly learned a lot from each other. And I am
    very much hoping that we can make this agreement. It will require us to
    make some more steps to bridge the gap, but the--we have agreed to well
    over--way over $600 billion in savings, more than enough to balance the
    budget. What remains is the, if you will, the ideological differences
    over the size and shape of the tax cut and over the size and character
    of the changes in Medicare and Medicaid and the investments in education
    and the environment.
        Q. Mr. President, do the Republicans want the biggest tax cut for
    the richest people in the country? Do they still hold to that?
        The President. Well, the largest amount of money in their tax
    program is one, of course, with which we're very sympathetic; it's a
    children's tax credit. I've proposed the family tax credit for children,
    and they have, and theirs is more generous than mine. They spend much
    more money on theirs than mine. So that's the largest amount.

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        The capital gains tax credit will have the biggest economic benefit
    to the smallest number of people. And then there are some other things
    in their tax program which is kind of skewed upward. There are also some
    other very good things in their program. We have to ask ourselves, you
    know, how much we can afford. A lot of the things in their program that
    I agree with involve help for small business on the expensing provision.
    I have proposed some pension reform legislation. That was the number one
    priority of the White House Conference on Small Business. It only costs
    a billion and a half dollars over 7 years, but it was their number
    priority, and we agree on that.
        So--and of course I would like to see this education credit that I
    have been advocating. But overall we have to ask ourselves: What is the
    prudent amount of tax cut that can be afforded in a credible balanced
    budget plan? And how much saving can you achieve in the Medicare and
    Medicaid plan without either hurting the beneficiaries or crippling the
    health care delivery system? That is the issue.
        And the truth is, no one knows for sure over 7 years. The savings
    that we have proposed are by far the greatest ever actually enacted. If
    the ones I have proposed were to be enacted, they'd be by far the
    largest ever enacted. But I have tried, instead of taking an arbitrary
    number, to go out and analyze what the burdens on the providers, analyze
    what is likely to happen with the--for example, the number of poor
    children, the number of disabled people, the number of elderly people,
    and just figure out what we think the system can bear as we move towards
    managed care.
        Keep in mind, if the Republicans turn out to be right and a lot of
    these reforms that are happening in the health care system generate more
    savings than I think they will or than I--than we can know they will,
    then no one in the wide world will object to us putting those in the
    budget next year, the year after that, the year after that. I just hate
    to see us write into stone something now that we might not be able to
    live with. And the markets are entitled to know, if we adopt a balanced
    budget plan, it is a credible plan with a reasonable chance of
    achievement.
        Q. Mr. President, could you tell us whether the offer that you made
    at the start of today's meeting was a full-blown counter to the offer
    that the Republicans had made over the weekend? And secondly, could you
    describe, at least to some extent, the idea that you outlined at the end
    of the meeting?
        The President. Well, we have agreed not to get into too much of our
    negotiations. I can say that--I don't know whether you'd call it a full-
    blown counter. It was--I moved in advance of the Daschle budget, toward
    their position at the beginning of the meeting, with the agreement of
    our Democratic negotiators. At the end of the meeting, I basically
    offered a set of changes which would bring us to the same amount of
    dollar savings, with a tax cut that would be targeted to families that
    would, I thought, come nearer to meeting what they said their objectives
    were on the tax side, without compromising where I thought we had to go
    with Medicare and Medicaid and education and the environment. Whether it
    will be--they want to examine it, I think, and I understand that. I
    don't think they would characterize it as an offer, because it came
    literally from me only, not from Senator Daschle or Senator--or
    Congressman Gephardt.
        Q. They seem to be suggesting that they'd made a great big step and
    that the response had been a rather smaller step----
        The President. No. Well, you can make numbers look like anything,
    but I--but let me say, I think if you go back and look at where my first
    budget plan was and where their first budget plan was, we have moved, I
    believe, at least as far as they have in the numbers.
        But the point I want to emphasize to the American people is our
    administration has cut this deficit in half in 3 years. I have always
    been for balancing the budget. I have bent over backwards to meet them
    halfway in a good bipartisan spirit, to do it in 7 years, not 9, as my
    plan would have done; to do it according to the Congressional Budget
    Office analyses, even though I don't entirely agree with it; and to make
    significant savings in the entitlement programs as well as the
    investment programs. But I don't believe we can go to the point where we
    don't know for sure that we have protected the people that are entitled
    to protection.
        I have already--neither of these budgets is a big spending budget.
    Both these budgets will require steep cuts in spending. My discretionary
    budget, out of which we fund education and the environment, is lower
    than a hard freeze, which means there will have to be steep cuts

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    in other areas in order for us to protect education and the environment.
        So I will continue to work with them. We can do that, but we have to
    know when we adopt this budget that we can achieve these numbers without
    hurting innocent people. They depend upon us to balance the budget with
    discipline and with compassion.

    Whitewater Investigation

        Q. Mr. President, if I could just change the subject for a second.
    Your spokesman earlier today said that if you could, you'd like to punch
    William Safire in the nose for calling Mrs. Clinton a congenital liar in
    his column yesterday. I wonder if you'd care to respond publicly to
    these accusations against your wife.
        The President. Well, what I said was, you know, when you're
    President, there are a few more constraints on you than if you're an
    ordinary citizen. If I were an ordinary citizen, I might give that
    article the response it deserves.
        I'm reminded of the great letter that Harry Truman wrote, which I--
    by the way, which I have now; it was a gift to me from a distinguished
    Republican, and I have it on my wall--you know, that Presidents have
    feelings too. I think the American people--I would just remind the
    American people, we've been through this for 4 years now. And every time
    somebody has made a charge related to the Whitewater issue, it's turned
    up dry. And the only records, as far as I know, that haven't been
    disclosed so far, as far as I know, we still haven't seen the release of
    the RTC report, which says that, after all, we told the truth all along
    about the underlying matters here. So I just would like to ask the
    American people to take a deep breath, relax, and listen to the First
    Lady's answers, because we've been through this for over 4 years now,
    and every time a set of questions comes up, we answer the questions and
    we go on. The American people are satisfied, and they will be again.
        She is--I've said before, I'll say again--if everybody in this
    country had the character that my wife has, we'd be a better place to
    live.
        Thank you very much.

    Note: The President's 112th news conference began at 5:16 p.m. in the
    Briefing Room at the White House. In his remarks, he referred to the
    former Resolution Trust Corporation, which ceased operations in 1995.