[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.