    [Public Papers of the Presidents of the United States: William J. Clinton (1997, Book I)]
    [January 28, 1997]
    [Pages 77-88]
    [From the U.S. Government Publishing Office www.gpo.gov]

    The President's News Conference
    January 28, 1997

        The President. Good afternoon. Please be seated. Before I take your
    questions, I would like to make a brief statement about the balanced
    budget that I will send to Congress next week.
        This budget shows that we can meet two of our most crucial national
    priorities at the same time. It proves we can protect our children from
    a future burdened by reckless debt even as we give them the educational
    opportunities they need to make the most of the 21st century.
        The budget finally moves us beyond the false choices that have held
    us back for too long and shows that we can cut our debt and invest in
    our children. The budget will help to renew our public schools. It will
    expand Head Start, help rebuild crumbling classrooms. It will double
    funding for public charter schools, giving parents more choice in how
    they educate their children. It will increase funding for Goals 2000 by
    26 percent. And it will help our students to reach high standards and
    master the basics of reading, writing, math, and science.
        It will also enable us to connect our schools and our libraries to
    the information superhighway. The budget more than doubles our
    investment in technology to hook our children up to computers and the
    Internet, and it increases by a third our investment in partnerships
    with teachers and industries to develop quality educational programming
    and technology. In short, the budget will connect our children to the
    best educational technology in the world.
        It will also open the doors of college education wider than ever
    before. I'd like to take a minute now simply to outline our
    unprecedented commitment to higher education. With this budget, national
    support for college education in the year 2002 will be more than double
    what it was on the day I first took office, going from $24 billion to
    $58 billion per year. The budget will fully pay for a $1,500-a-year
    tuition tax credit, a HOPE scholarship for the first 2 years of college,
    to make the typical community college affordable for every American and
    to achieve our goal of making 2 years of college education as universal
    as a high school diploma is today.
        It will also allow a working family to deduct up to $10,000 a year
    for taxes for the cost of any college tuition or job training. And with
    our special IRA for education, most parents will be able to save for
    college tuition without ever paying a penny in taxes.
        In addition, my balanced budget takes further steps to widen the
    circle of educational opportunity. It provides a 25 percent increase in
    funding for Pell grants, the largest increase in the maximum scholarship
    in 20 years, so that over 4 million students will get up to $3,000 a
    year. We'll make 130,000 more students eligible for these scholarships,
    and we will open the scholarships to 218,000 older, low income Americans
    who want to go to college.
        Second, under the balanced budget we will present, we will continue
    to reform our student loan programs to make college loans easier for
    students to get and easier to pay back. We will cut interest rates on
    loans to students while they're in school. We will cut loan fees for 4
    million low and middle income students in half. Fees on 2\1/2\ million
    more will be cut by 25 percent. Taken together, these two steps will
    save American families $2.6 billion over 5 years.
        Third, we will increase funding again for work-study positions for
    students. That will take us, over about a 3-year period, from 700,000
    work-study positions to 1 million work-study positions per year. And it
    will help us to meet our goal of getting 100,000 of those work-study
    students to participate as tutors in our initiative to make sure that
    all of our 8-year-olds can read independently.
        To encourage community service, we will also provide tax incentives
    to encourage loan forgiveness for students who, after college, choose
    professions that give something back, people who use their education to
    work as teachers, in homeless shelters, as doctors in remote rural
    areas.
        All together, these proposals will move us much closer to our clear
    national goal: an America where every 8-year-old can read, where every
    12-year-old can log on to the Internet, where every 18-year-old can go
    to college, where all Americans will have the knowledge

    [[Page 78]]

    they need to meet the challenges of the 21st century. I am very proud of
    this budget.
        Finally, let me say a word about campaign finance reform. We all
    know we need to find a new way to finance our campaigns and to bring the
    aggregate spending levels under control. Anyone who is involved in
    politics must accept responsibility for this problem and take
    responsibility to repair it. That is true for me and true for others as
    well.
        Last week, I met with Senators John McCain and Russ Feingold, and
    Representatives Chris Shays and Marty Meehan. They have introduced
    tough, balanced, credible, bipartisan campaign finance reform
    legislation. I pledged my support to them. I pledge it again today. I
    pledge to do all I can to help them pass this legislation. Any
    legislation we pass should be bipartisan, should limit spending, and
    should leave the playing field level between parties and between
    incumbents and challengers.
        This is our best chance in a generation to give the American people
    campaigns that are worthy of the world's oldest continuous democracy. I
    call on the members of both parties to work with us to get the job done.
        Helen [Helen Thomas, United Press International].

    Campaign Finance Reform

        Q. Mr. President, my question ties into that. What should the
    American people think of a Presidential campaign in which a day at the
    White House is sold for $250,000 a couple and the Republican Party sells
    a season ticket of access to Capitol Hill for $250,000?
        The President. Well, first, let me say I dispute a little bit the
    characterization there. I can't speak for the Republicans; they'll have
    to speak for themselves. But the people who were there on the day in
    question were not charged a fee. Some of them were our contributors--had
    contributed in the past--they had raised money for me in the past. Some
    of them had not. And so I don't think it's quite an accurate
    characterization.
        But I will say this: If you look at the money that was raised and
    spent not only by the parties and their respective campaign committees
    in the Senate and House but also by all these independent--apparently
    independent third-party committees and you look at the exponential cost
    of the campaigns related to communications, surely we can use this
    opportunity to make something positive come out of this.
        I mean, I think that all of us--as I said, again--every one of us
    who has participated in this system, even if we did it because we
    thought we had to do it to survive or to just keep up, has to take some
    responsibility for its excess, and I take mine. But we have got to do
    something about it. And the only way we can do anything about it is to
    pass the legislation, the McCain-Feingold bill or some acceptable
    variation thereof.
        Terry [Terence Hunt, Associated Press].
        Q. Mr. President, with all the focus on the Democrat fundraising
    right now, why are you attending a million-dollar fundraiser tonight?
    What kind of an image do you think this leaves? And why do these donors
    make these big-money contributions? What do they get in return?
        The President. Well, first of all, under all conceivable campaign
    finance reform scenarios, it will still be necessary for the parties to
    raise some money. And neither party has the capacity to raise all their
    money from direct mail campaigns and contributions of $100 or less. The
    Business Council, the group that is having this fundraiser tonight, is
    one that would be quite consistent with the McCain-Feingold bill, were
    it to pass. And I, frankly, am very appreciative of the fact that these
    folks have been willing to come and help us and that we have increased
    the ranks of particularly younger, more entrepreneurial people in the
    Democratic Party supporting us. So I think it's an important thing to
    do. I don't think there's anything wrong with raising money for the
    political process. The problem is, it is the volume of money, the amount
    of money, the time it takes to raise, the inevitable questions that are
    raised.
        Now, I can tell you what they get from me. I don't know--you have to
    ask them what they expect. What they get from me, I think, is a
    respectful hearing if they have some concern about issues. I think it's
    a good thing when contributors care about the country and have some
    particular area of expertise they want to contribute. But nobody buys a
    guaranteed result, nor should they ever. They should get a respectful
    hearing, and the President should do what's right for the country.
        Wolf [Wolf Blitzer, CNN].

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    Taxes

        Q. Mr. President, in your new budget that you'll submit next week to
    Congress there will be tax cut proposals, including some of the
    education tax cut proposals you outlined today. But there also,
    presumably, will be some tax increases in the form of what you would
    describe as corporate welfare, getting rid of some of the tax breaks
    that big business have now. Some Republicans are already suggesting that
    netwise, your budget proposal will have a net increase in taxes as
    opposed to a net decrease. Is that a fair assessment of your budget?
        The President. No. I believe that's incorrect. And let me say, I
    also believe--and again, I'm speaking from memory now; I have not
    discussed this with Mr. Raines in the last several weeks. But I believe
    that--number one, I believe it's incorrect, that we do have a net tax
    cut. Number two----
        Q. Tax increase.
        The President. No, we have a net tax cut. Number two, I believe that
    virtually all of the corporate loophole closings that we have in this
    budget are ones that we had discussed with and reached at least general
    agreement on with the congressional leadership back during the budget
    negotiations, when we were having them last year. I believe that to be
    the case. And if it's not, I'll stand corrected, but that's accurate.
        Yes, Gene [Gene Gibbons, Reuters].

    President Boris Yeltsin of Russia

        Q. Mr. President, Boris Yeltsin has been out of work for more than 6
    months now because of his health problems. How has that affected your
    ability to do business with the Russian Government? And a related
    question: How will Yeltsin's health problems affect the timing and
    location of the next U.S.-Soviet summit, which had been set for March?
        The President. Well, first, let me make the most important statement
    I think I can make to your question, which is, I have no private
    information that is inconsistent with the public statements of the
    Russian Government on President Yeltsin's health. I have no reason to
    believe, based on any information I have, that his condition is any
    different from what the Russian Government has said it is--first thing.
        Secondly, I had been very impressed by the extent to which President
    Yeltsin made appropriate delegations to Mr. Chernomyrdin during the
    period of his convalescence leading up to the surgery and then in this
    period after the surgery when he developed his illness. And the Vice
    President and Mr. Chernomyrdin are going to meet pretty soon, and their
    ongoing relationship--we have a huge, full agenda. And we have been
    given no impression by the Russians that we aren't still going to have
    the Yeltsin-Clinton meeting in the March timeframe.
        I think it's very important--you know, we have to work through the
    NATO-Russia relationship in connection with expansion and other issues.
    We have a lot of other security issues. We have to deal with the START
    II issues, with where we go after START II. We have a lot of economic
    issues that are still to be resolved. And so I think we'll go right on,
    and I expect to have that meeting in March. And I expect it to be an
    important one and, I hope, a successful one.
        Mr. Donvan [John Donvan, ABC News].

    Bipartisanship

        Q. Mr. President, in your Inaugural Address 8 days ago, you outlined
    some quite lofty goals, for example, the education proposals you were
    speaking about today. But in the days since, many questions in the press
    and in Congress have focused on issues like campaign fundraising. My
    question is whether you are worried that the well is being poisoned even
    now for the realization of these goals before you can even get out of
    the gate, particularly on the issue of bipartisanship?
        The President. No. But all I can do is speak for myself. I have
    tried to conduct the Presidency and to guard my words in a way that
    would make it clear that I intend to follow through on my commitment to
    try to establish a working partnership and a dynamic center, not a
    stable, stale one but a dynamic one, with people in both parties. I
    think we will have to continue to work on that.
        As these--you know, just a few days ago, there were--when someone
    asked me if I thought that in the House the issue over the Speaker would
    poison the well, and I didn't, and I don't. I don't think it has. I just
    think that when matters come up that have to be dealt with, they need to
    be dealt with and disposed of. But the American people expect us to
    focus on how we can lift their lives and improve our conditions and move
    our people

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    together and deal with the things that are before us. And I think if we
    do that and do it in a good-faith way, we'll be able to go forward.
        Now, I'm very encouraged--let me just say this--the most encouraging
    thing has been, to me, the way that my budget proposals have been
    received. Even in criticism they have not been rejected outright. You
    know, 4 years ago when I came here, nobody in Congress took a
    President's budget seriously. They said, ``Oh, his budget scenario is
    always rosy. The numbers are always cooked.'' And we now have 4 years in
    a row when I have presented conservative budget figures, when we've
    brought the deficit down by over 60 percent, and when, now, both sides
    are keeping their powder dry enough to create the possibility we can
    reach a balanced budget agreement. So, on balance, I'm still quite
    hopeful.
        Peter [Peter Maer, NBC Mutual Radio].

    Terrorist Attack in Dhahran, Saudi Arabia

        Q. Mr. President, both your Attorney General and the FBI Director
    recently expressed concerns about the level of cooperation from Saudi
    Arabia into the investigation into the bombing that killed 19 American
    soldiers last year. What's your assessment of their level of
    cooperation, and do you have confidence in the security of the U.S. men
    who are still on duty there?
        The President. Let me answer the second question first. We have
    worked very hard, as you know, since the Khobar incident, to enhance the
    security of our Armed Forces personnel in Saudi Arabia. In that
    endeavor, we have received the cooperation of the Saudi Government. We
    have relocated a large number of people. We have done a lot of work.
    We've invested a lot of money; so have they. And we believe that there
    is no such thing as a risk-free world, but we believe that our Armed
    Forces are more secure today. And we feel good about that.
        On the investigation, clearly, for our point of view, in our
    Government, the FBI is in charge of that. They have sought the answers
    to some more questions. The Saudi Government has assured us from the
    very highest levels that they would get answers for those questions, and
    so I expect that to happen. And that's all I can tell you at this time.
    The process is ongoing. The investigation is ongoing. The relationship
    is ongoing.
        As you can imagine, this creates--an investigation of this kind
    raises all kinds of complex questions about cooperation against
    sovereignty, about what other interests of that nation might be in play.
    But I'm confident that in the end they will do what I have been assured
    personally by the highest levels of the Saudi Government they should do.
        Q. So you're satisfied with the level to this date?
        The President. Well, it's still in process. We have to see if it
    comes out all right. But we still have--there are further requests for
    information that are ongoing. We'll see how it comes out.
        Yes, Mr. Neikirk [Bill Neikirk, Chicago Tribune].

    Hong Kong

        Q. Mr. President, the Chinese have been making a lot of noises about
    clamping down on civil liberties in Hong Kong. How concerned are you
    about this, and will this upset our relationship in any way?
        The President. Well, it wouldn't help anything. I'm concerned about
    it, and I think the--we don't know yet what's going to happen. But the
    Chinese have basically said that it would be a part of China, but its
    system would be left intact. And I think there may be some ambivalence
    about what it means to leave their system intact. And I think maybe some
    would assume that you could impose political uniformity on Hong Kong and
    leave its economic vibrancy intact. It really is, in some ways, almost a
    perfect open market, you know. And I don't know if that's true or not.
    It's a complex society.
        I think anyone who has ever been to Hong Kong more than once--and
    I've been there on several occasions in my life--probably leaves with
    the feeling I have, that you could go there a thousand times and you
    might not ever understand it all. It's a complicated society. And I'm
    not so sure that it can exist, with all of its potential to help China
    modernize its own economy and open opportunities for its own people, if
    the civil liberties of the people are crushed.
        So I think it would be wrong on its own merits, but I think it might
    wind up being less useful to China. So I would hope very much that they
    would look for ways to maximize the continuation not only of the
    economic system but of the personal freedoms that the people

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    of Hong Kong have enjoyed in making it such an economic engine.
        Yes.

    Webster Hubbell and the Lippo Group

        Q. Mr. President, the Lippo Group hired your friend Webb Hubbell
    after he resigned in a scandal from the Justice Department and just a
    few months before he went to jail for embezzlement. So far, no one has
    been able to determine what kind of work he was doing or why he was paid
    a sum reportedly in excess of $200,000. Does anything about this
    arrangement strike you as unusual or suspicious? And given that there
    have been public suggestions this money was offered to encourage his
    silence before the Whitewater investigator, have you taken any steps
    yourself to assure yourself that this is not the case?
        The President. First of all, I didn't know about it. To the best of
    my recollection, I didn't know anything about his having that job until
    I read about it in the press. And I can't imagine who could have ever
    arranged to do something improper like that and no one around here to
    know about it. It was just not--we did not know anything about it, and I
    can tell you categorically that that did not happen. I knew nothing
    about it, none of us did, before it happened. And I didn't personally
    know anything about it until I read about it in the press.
        So I don't think--I think when somebody makes a charge like that,
    there ought to be some burden on them to come forward with some evidence
    to substantiate their charge instead of saying, ``We'll make a charge;
    see if you can disprove it.'' That's not the way things work, and that's
    a pretty irresponsible charge to make without knowing--having some
    evidence of it. And I'm just telling you it's not so.
        Yes, Rita [Rita Braver, CBS News].

    Campaign Finance and White House Access

        Q. Back on this issue of fundraising. You've talked about it maybe
    in general terms, but specifically last week the White House put out a
    list of coffees. It showed that at one coffee that included the
    Comptroller of the Currency, the Secretary of the Treasury, there were
    people who--bankers who had contributed something like $325,000. You
    attended that coffee. There was another coffee with another regulator of
    the Consumer Product Safety Commission; something like $500,000 was
    contributed by people who were at that coffee. And I wondered if, in
    retrospect, you had any feelings about, number one, regulators being at
    political coffees, and also your own participation. Obviously, you're
    not going to be doing this again for your own reelection, but is this
    something that you have decided you will continue doing, and what have
    you come to in your own mind on this issue?
        The President. I have a different opinion about my participation and
    the regulators' participation. First, let me tell you about--I can only
    comment on the first instance you mentioned, the bankers meeting. I
    think it is an appropriate thing and can be a good thing for the
    President and for the Secretary of Treasury to meet with a group of
    bankers and listen to them and listen to their concerns and, if they
    have certain issues, to explore those issues.
        I can tell you categorically that no decision ever came out of any
    of those coffees where I or anyone else said, ``This person is a
    contributor of ours; do what they asked us to do.'' But I think those
    meetings are good. I think the President should keep in touch with
    people. I think he should listen to people. I never learn very much when
    I'm talking, and I normally learn something when I'm listening. So I
    think that they're good.
        In retrospect, since the DNC sponsored it, I do not think the
    Comptroller of the Currency should have been there. I agree with Mr.
    Ludwig, and he should have been told who was sponsoring it, and it would
    have been better had he not come. I agree with that. But I think there
    is a distinction to be made between the President meeting with people,
    listening to them, and then, at least if they raise some serious issues,
    having them looked into. But I never made a decision for anybody because
    they were contributors of mine. I don't--but I do think it's important
    to listen to people.
        But you're right--or he was right, it would have been better if he
    had not been there. Regulators should not come to meetings that are
    sponsored--have any kind of political sponsorship, I don't think.
        Q. So you intend to keep going with these coffees, sir? Do you
    intend to keep going with these coffees?
        The President. I don't know. But I can tell you--well, I intend to
    keep going with coffees. I don't know whether they'll be sponsored by

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    the DNC or whether we'll just bring them in through our own regular
    offices. But I also had lots and lots and lots of coffees over the last
    4 years that had nothing to do with the DNC, where a lot of people came
    were not contributors or even active supporters of mine, but they were
    from different walks of life around the country. And I found them very
    helpful, where I would just sit down and talk for 4 or 5 minutes and
    then listen for an hour or so and maybe ask questions based on whatever
    people had to say to me.
        I think it's an effective way for the President to hear firsthand
    how the operations of the Government or developments in the country are
    affecting people. So I think that the coffees themselves are a very good
    device. But I do believe, particularly if sponsored by a political
    party, it's not appropriate for the regulator to be there.

    Social Security and the Budget

        Q. Thank you, Mr. President. A number of Democrats in Congress
    oppose a balanced budget amendment to the Constitution unless the
    Government promises to stop spending surplus Social Security funds,
    borrowing and spending them. Would you--though you oppose an amendment,
    you will propose a balanced budget; will you stop using surplus Social
    Security funds?
        The President.  Well, the using--the funds that are collected on
    Social Security are going to be invested in some way. When you say
    ``using,'' what they do, they cover the deficit by basically being sold
    for Government securities. Social Security is not, therefore, in effect
    separated from the Government. But those securities will come back with
    interest to the Government later on. And by then, what will have to
    happen is, when we start running short of money 20 years or so from now,
    the Government will have to have been on a balanced budget for some
    years by then, so that when the bonds are repaid, they can be used to
    pay Social Security.
        We couldn't right now, neither the Republicans nor I and the
    Congress, could produce a balanced budget tomorrow that could pass, if
    you said the Social Security funds cannot be counted, if you will, as
    part of the budget.
        But let me say--you raise an interesting question, however, which is
    why I don't favor this amendment--I've given the Congress a plan to
    balance the budget. I've made it clear that we will work with them to
    meet the Congressional Budget Office budgetary projections. And we're
    going to do this. And now they know that I have credibility because
    we've worked on it for 4 years and we've done almost two-thirds of the
    work.
        When you amend the Constitution, you do it forever. No one can
    foresee the circumstances that will come a generation from now or 50
    years from now or even 10 years from now. And the way I read the
    amendment, it would almost certainly require after a budget is passed,
    if the economic estimates turn out to be wrong, the executive branch,
    the President, the Treasury Department, to impound Social Security
    checks or to turn it over to courts to decide what to be done. And it
    would put us in a position, in my view, of doing things that are
    counterproductive.
        The Congress--[inaudible]--is about to vote on this--the House is--
    against a background of 4 years of stable growth and 4 years of
    declining deficits. But we don't know what external factors in the world
    might be brought to bear on our country in the next 10 or 15 years that
    might have terribly counterproductive impulses if we were cutting aid to
    children and raising taxes in the teeth of a big recession or we were
    impounding Social Security checks or something of that kind. I just
    think that the Congress has an obligation to think of what could happen
    here in the future and ask themselves whether they really want to
    straitjacket the United States.
        What we ought to do is follow prudent policies, balance the budget,
    and go forward. But we shouldn't compromise what might happen 10, 15
    years from now with an amendment to the Constitution. I think it's bad
    economic policy and bad policy. And I think we're going to wind up with
    some decisions in the courts and some decisions on Social Security and
    aid to kids and other things that future generations won't be very
    grateful to us for just because it seemed so popular now because we
    haven't balanced the budget since 1969.
        Q. If I may, Mr. President, could I just follow up? Mr. President,
    could I just follow up on one thing? There are a number of reform plans
    around that would give people part of their taxes back to put into
    private accounts. If it was only part of their taxes and some sort of
    safety net was preserved, would you favor some private accounts out of
    Social Security tax money?

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        The President. Well, first of all, I would favor nothing that would
    compromise the integrity of the system. Secondly, even the Social
    Security Advisory Commission couldn't agree on that, so I can't make a
    decision on that, to support something like that, without knowing more
    about it.
        There are two different options that were recommended--or three
    different ones--and I just--I think that what we need to do, as I've
    said before, we need to make some changes in Social Security to lengthen
    its life a little bit. We don't want to start getting in trouble in
    2019; it ought to have a longer lifespan than that. And we ought to do
    it through a bipartisan process that is either like the one that was
    done in 1983 or that at least consults all the people who will be
    affected by it. And I think that if we start now, we can make modest
    changes that won't be too burdensome to anybody, that will secure Social
    Security for another 50 years. And I think that's what we ought to be
    doing.

    District of Columbia

        Q. Mr. President, I wonder if we could just shift the focus briefly
    to something you've become much more interested in lately, the troubled
    Capital City here. The District of Columbia Congresswoman has
    reintroduced her wide-ranging tax cut plan today, which offers relief on
    the Federal level for everybody, and the working poor would indeed be
    eliminated, as you know. She is also saying today that she wants your
    help on this and she thinks that her tax plan should be included in your
    new DC recovery plan, that the one cannot work without the other, and
    that time is fast slipping out for the Capital City, that action needs
    to be taken soon or we're going to go down the tubes.
        The President. Well, let me say, I believe that we should have a
    three-point plan. One is the thing that Congresswoman Norton and I agree
    on, that we should have the Federal Government assume those things that
    are now burdening the District of Columbia that in every other place in
    the country those costs are borne by State governments, not local
    governments. You can't expect any city to function and be successful if
    they have to pay the State's cost as well as the city's cost, raise
    taxes when people can go right across the Potomac River or right up the
    road into Maryland and have the same cost borne in a different way. So I
    think that responsibility shift is important.
        Secondly, I think the Federal Government needs a more disciplined
    effort to see what else we can do within the resources we now have to
    help DC in law enforcement, in education, in transportation, right
    across--and housing and homelessness.
        Thirdly, I think there needs to be an economic incentive in the form
    of tax relief. Now, I haven't seen what Congresswoman Norton introduced
    today. The last time this came up, the folks at Treasury and OMB thought
    that the proposal was more costly than we could afford. But I intend to
    make one, and I think it will be a significant incentive for people to
    invest in DC and to help to grow the economy here. I think that's a very
    important component. So I agree with her on the general point. I just
    have to see the specifics before I can make a commitment.
        Yes, Mara [Mara Liasson, National Public Radio].
        Q. I wonder if I could just follow up?

    China and Human Rights

        Q. Your annual human rights report is about to come out this week.
    It's reported that it will say there are no active dissidents in China.
    They're either all exiled, or they're in jail. Does this mean that your
    policy of constructive engagement has failed to get the kind of results
    you wanted to get on China's human rights behavior?
        The President. It means that we have not made the progress in human
    rights that I think--that I had hoped to make, yes. But it does not mean
    that if we had followed a policy of isolating ourselves from China, when
    no one else in the world was prepared to do that, that we would have
    gotten better results. And I think--I still believe, over the long run,
    being engaged with China, working with them where we can agree--which
    helps us on a whole range of security issues that directly bear on the
    welfare of the American people, like the problems on the Korean
    Peninsula--and continuing to be honest and forthright and insistent
    where we disagree has the greatest likelihood of having a positive
    impact on China.
        Keep in mind, the time horizon here for how we judge them has to be
    broadened a little bit. They tend to look at things in a long-time
    horizon. They're going through some significant

    [[Page 84]]

    changes themselves within their country, economic and political changes.
    And I believe that the impulses of the society and the nature of the
    economic change will work together, along with the availability of
    information from the outside world, to increase the sphere of liberty
    over time. I don't think there is any way that anyone who disagrees with
    that in China can hold back that, just as eventually the Berlin Wall
    fell. I just think it's inevitable. And I regret that we haven't had
    more progress there more quickly, but I still believe that the policy
    we're following is the correct one.
        Jim [Jim Miklaszewski, NBC News].

    Campaign Finance Reform

        Q. Mr. President, some lawmakers on Capitol Hill still think it
    would be a good idea to appoint an independent counsel to investigate
    some of the campaign fundraising that occurred last year. And at the
    same time--what's your latest thinking on that? And at the same time, if
    I may, you often decry what you call a cynicism that you believe is
    pervasive in Washington, but given the amounts of money that were raised
    last year, the way they were raised, and some of the explanations for
    the way they were raised, isn't the public entitled to a little bit of
    healthy skepticism, if not cynicism, about the entire process?
        The President. Well, to answer your first question, I'm going to
    take Bob Dole's advice because that's a decision for the Attorney
    General to make. And to answer your second question, yes, healthy
    skepticism is warranted. But keep in mind, I would say to the skeptics,
    the vast majority--indeed, a huge percentage, way, way over 90 percent--
    I don't know what it would be--the vast majority of the money that was
    raised by both the Democrats and the Republicans was raised in a
    perfectly lawful fashion, completely consistent with the requirements of
    the law. The vast majority of the people who gave money to both the
    Democrats and the Republicans were people who believed passionately in
    the course that those two parties were pursuing and the candidates and
    what they were trying to do--and to their House committees and the
    Senate committees.
        The problem is that the margins create great problems because of the
    sheer volume of money that is being raised today. As I said before, it's
    too much money, takes too much time to raise, raises too many questions.
    And the cynicism is well--and the skepticism is well-founded. If it
    becomes cynicism, then it removes the incentive on the part of the
    Congress to pass campaign finance reform because cynics will say it
    won't make any difference anyway.
        If you look at the present campaign laws, I think you can make a
    compelling case. I have not heard this point made, but I believe it to
    be true. I believe when these reforms arose out of the Watergate thing
    back in the mid-seventies, I think they worked pretty well for several
    years. I believe they elevated the reputation of politics, and I think
    the reforms worked pretty well. What happened is, no system in a world
    changing like ours can be maintained indefinitely, because the economy
    changes and particularly--look at how your work has changed. When you
    travel with me, you carry these little computers around, and you run
    these pictures up on computers, and you send them from the plane
    somewhere else. I mean, just think of all the things that have changed.
    This system has not been fixed in over 20 years. During that 20 years,
    there has been an explosion in ways of communicating with people and an
    exponential increase in the cost of communicating. And a system which I
    would argue to you really worked pretty well, after it was passed in '74
    and going forward, has been overtaken by events.
        So, cynical, no; healthy skepticism, you bet. We should always be
    skeptical. But we need to change the system. It's got to be--it's just
    outdated.
        Ellen [Ellen Ratner, Talk Radio News Service].

    Welfare Reform

        Q. Mr. President, what specific mechanisms do you plan on working
    with the private sector in terms of creating more welfare jobs for
    people who are on welfare?
        The President. Primarily two. One, I will offer a special tax
    incentive--there was a story about it today, I think, in the New York
    Times--a special tax incentive that'll be a 50 percent credit for up to
    $10,000 a year in pay for people who are clearly, provably hired from
    welfare and put into new jobs.
        Secondly, we have given the States--and there was a story, I think,
    in the Post today talking about how a lot of the States are trying to
    push this down to the community level. That's

    [[Page 85]]

    good. That's not bad, that's good, as long as they give the communities
    the means they need.
        The second thing is that every community should know that the
    employers in that community, if they hire people from welfare to work,
    can get what used to be the welfare check for at least a year to use as
    an employment and training subsidy. Why? The welfare rolls have gone
    down 2.1 million in the last 4 years; it's the biggest drop in history.
    I think a fair reading of it would say about half of this decline came
    from an improved economy and about half of it came from intensified
    efforts to move people from welfare to work. Now, I don't have any
    scientific division, but anyway, there's some division there.
        The rest of the people that are on welfare now, by and large, are
    people who will be more difficult to move from welfare to work and have
    stay there. So I think we're going to have to give some incentives. But
    if it works and if every community in the country would set up an
    employment council and turn this into a family and an employment program
    like Kansas City has and all employers have those two incentives, I
    think we'll be able to meet the requirements of this welfare reform bill
    in a way that will be good for the people on welfare and good for their
    kids.
        Kathy [Kathy Lewis, Dallas Morning News].

    Legal Immigrants and the Budget

        Q. Mr. President, the chairman of the House Ways and Means Committee
    over the weekend laid down some markers for what he thinks would create
    chances for your budget to be alive on arrival on the Hill. On welfare,
    one of the things he mentioned was increased spending for legal
    immigrants, and he said he hoped you wouldn't insist on it. How do you
    deal with that in your budget, and will you continue to insist on it?
        The President. Well, let me say, I like Mr. Archer very much, and
    we've had a good relationship, and I appreciate what he said about me
    meeting him halfway on Medicare. But there have been reports in the last
    couple of days about Republican Governors with high immigrant
    populations coming back to their Republican congressional leaders and
    saying, ``Please reconsider this.''
        My budget will contain funds and propose changes consistent with the
    promises I made when I signed the welfare reform bill and when I
    campaigned to the American people on this issue. I believe that the bill
    is counterproductive in the way it treats legal immigrants who through
    no fault of their own wind up in desperate circumstances and in other
    ways that I think are not good for families and children.
        So I will propose some changes. And I hope that when we get all
    through here--again, I hope this will be treated just like the budget
    issue--I would ask our friends on the Republican side and the Democrats
    who care as passionately about this as I do to keep our powder dry. Let
    us make our case on the merits. Let them hear from the Republican
    Governors of places like Texas and New York that have these huge
    immigrant populations of good people that are making great contributions
    to this country, that are working like crazy and making this a better
    place, and listen to the practical impact of the law that's now there on
    the immigrant population. And I'm not sure we can't get some changes.
    I'm very hopeful that we can, and I'm going to give it my very best
    effort.
        Q. Mr. President----
        The President. Wait a minute, I'll take a couple of more. Just a
    minute.
        Deborah [Deborah Mathis, Gannett News Service]. No, no, Sarah's
    [Sarah McClendon, McClendon News Service] next. Let Deborah talk.
        Go ahead.

    Campaign Finance Reform

        Q. To follow up on Jim Miklaszewski's question, the people are not
    just skeptical or cynical about politics or about campaign finance. They
    are more specifically cynical and skeptical and suspicious of this White
    House, of this administration, partly because of the way information has
    trickled out, the way memories have been stubborn and sometimes revised
    at the last moment--at an opportune moment, it would seem. And I'm
    wondering what's new about the White House now and the way you handle
    delicate information, and what you want to tell the people about it?
        The President. First of all, I want to tell the people, when you get
    asked hundreds of questions, it's not possible to remember the answer to
    every one. I think some of these people make honest mistakes. I read
    things in your reports all the time that aren't quite factually
    accurate, but I don't think you deliberately did it. It's impossible to
    do--we're living in a society that

    [[Page 86]]

    is deluged in information. So I think that what we've all got to be
    candid enough to say is, no one is blameless here; it costs so much
    money to pay for these campaigns, that mistakes were made here by people
    who either did it deliberately or inadvertently. Now, it's up to others
    to decide whether those mistakes were made deliberately or
    inadvertently. It's up to me to do what I can to clean up the system.
        Now, what should they believe about us? Well, first of all, I got
    the Democratic Party to make some unilateral changes in its fundraising
    policies and asked our friends in the Republican Party to do the same
    and offered to completely get rid of the so-called soft money, the
    larger contributions, if they would. Secondly, we're out here working
    hard as a party, as a White House, and me personally as President, to
    pass the McCain-Feingold bill which would put an end to these problems
    and modernize this system. So I think that's quite important.
        Now, I do not believe you will ever get the politics out of
    politics. That is--and that's not bad. I think people who fight for
    candidates and who help them and who help parties will be people that
    the people who represent them want to hear from and want to maintain
    access to. I don't think there is anything wrong with that. That's the
    way the system works. And I don't think anyone should imply that your
    first obligation once you get elected is to stop talking to the people
    that helped you get there.
        But I think that we've got to improve the system. And I understand
    why the cynicism is there. But again I will say, I'd ask you to look--
    way, way over 90 percent of all the people who gave money and way over
    90 percent of all the people who gave--of all the money that was raised
    is clearly consistent with the law in both parties, as far as I know. I
    mean, I can't really speak for the Republicans, but I'd be astonished if
    that were not so. I would be astonished if it were not so.
        So there is no pattern and practice here of trying to push our
    system over the brink into corruption. What happens is, there is a race
    to get as much money as you can to keep from being buried by the other
    people and to make sure you can get your own message out and, at the
    edges, errors are made. And when they're made, they need to be
    confessed, and we need to assume responsibility for them. And that's
    what I'm trying to do up here today. But I can't say, Deborah, in
    response to your question, that I know that any of these people who gave
    insufficient answers to you did it in a deliberate or deceptive way,
    because a lot of times people just ask questions, and they don't have
    all the answers. And they're trying to cooperate and don't do such a
    good job.
        Sarah, go ahead. I promised you a question.

    Health Care

        Q. Sir, the National Coalition on Health Care has issued a wonderful
    report. It's the largest consumer organization on the subject. They say
    that at 58 million people, 60 percent of those people were against the
    present health care system as being totally inadequate, and they don't
    have faith in it. Now, we heard last year a lot of stuff about how
    people were satisfied with the most wonderful health care system in the
    world. Well, apparently, that's baloney, according to this report. And
    there's a lot of talk being done about preserving Medicare, but Medicare
    won't do it. It won't go all the way to take care of the people of this
    country. And this report shows that they simply cannot meet the big
    bills of hospitals and doctors. Aren't you going to try again this year
    with Hillary to devise a good national health care program for this
    country?
        The President. Well, I read that report, and I found it very
    interesting. But I think what that report was saying--and again, I don't
    want to read between the lines, all I did was read a news column on it--
    but I can tell you what I got out of it, and then let me respond to your
    question. What I got out of it was people said, ``Well, I may feel good
    about my doctor or my local hospital, but I'm worried about the security
    of this system. I'm worried about whether, if managed care controls
    everything, whether I'll lose any control over important decisions
    affecting my life. I'm worried about whether if I lose insurance here,
    whether I can take it there.''
        And what I think we have to do is to recognize that our society--and
    I think we've played a role in it here, but I think the whole system
    deserves credit for it--we've done a much better job in holding down
    inflation in medical care and bringing it closer to the general rate of
    inflation. There's some indication it's going up again, but I hope we
    can keep it down. And we have done a better job of some other things,
    like ending the 48-hour delivery rule and all that. But we have not--or
    the 24-hour delivery.

    [[Page 87]]

    But we have not done enough to increase access to affordable care for
    people who don't have coverage, to deal with the problem that there are
    still a lot of children in working families that are poor who aren't
    covered and to deal with the fact that there are people who are
    unemployed who, even though we just made it legal for them to carry
    their insurance with them when the Kennedy-Kassebaum bill passed last
    year, they can't afford to do that.
        So in my budget, we will have, in effect, an unemployment health
    insurance plan to help people, families who have insurance keep it when
    they're employed. And I intend over the next 4 years to work very hard
    to try to find other ways, as I said, in a step-by-step way to allow
    people affordable access to this system. It will never be completely
    stable for anyone until everyone at least has affordable access to it.
        Yes, one foreign person over here.

    Middle East Peace Process

        Q. Mr. President--Mr. President, both Israel and Syria seem willing
    and ready to come to the negotiating table, and they both want American
    diplomacy as an honest broker. Prime Minister Netanyahu will come to
    Washington next month. How will you act together to energize this track
    and reach comprehensive peace in the Middle East, which is clearly a top
    priority of your administration?
        The President. Well, Prime Minister Netanyahu, Chairman Arafat, King
    Hussein, and President Mubarak are all coming here in the next couple of
    months. And I must say again how much I appreciate the agreement reached
    on Hebron and the other understandings reached between Prime Minister
    Netanyahu and Chairman Arafat and the fact that so far things seem to be
    being implemented in an appropriate way and going all right.
        There will never be a comprehensive peace in the Middle East until
    we resolve this matter with Syria--between Syria and Israel. And that
    requires the willingness of the parties. What our experience has been,
    mine, the Secretary of State, Secretary Christopher, and now Secretary
    Albright, Mr. Ross, and our whole team--has been that when both parties
    want to make peace, no matter how far apart they seem, we've found a way
    to get there. If they're not sure it's time to make peace, no matter how
    close it seems to an outsider, we don't seem to be able to bridge the
    gap. So you can be sure that that will be a major focus of our
    discussion, whether we can find a way to work together.
        Yes.

    Medicare

        Q. Mr. President, your Medicare reform plan was criticized for
    relying too heavily on savings squeezed from health care providers. Why
    shouldn't Americans who can afford to pay higher Medicare premiums pay
    them?
        The President. Let me respond to the criticism. First of all, in my
    health care reform proposal I supported higher income--increases in
    Medicare premiums on higher income Americans, but it was part of a
    comprehensive health care reform. What I was attempting to do, after
    meeting at some length with Secretary Shalala who worked through these
    issues with me, the specifics of the Medicare reform, was to demonstrate
    that we could balance the budget, meet the Republicans halfway, and put
    10 years on the life of the Trust Fund without a premium increase. If
    we're going to have a longer term Medicare reform--I have never said
    that I would rule that out, but I didn't want to rule it in. I presented
    a budget that was consistent with my priorities. And I'm prepared to
    meet with Senator Lott and discuss that and other issues. But I
    presented a budget that I though was the best budget to achieve our
    objectives.
        You've been trying to stand up all this time. Go ahead.

    Campaign Fundraising Investigation

        Q. Thank you, sir. When you are finished here, Mr. President,
    Senator Thompson is expected to go to the Senate floor to discuss his
    committee's investigation into these fundraising issues. I'm wondering
    if you would like to say something to him regarding White House
    cooperation and the possibility of looking into Republican fundraising
    as well.
        The President. I have instructed everybody here to fully cooperate
    with him. My new Counsel, Mr. Ruff, is going to meet with Senator
    Thompson and the appropriate people, and we will be fully cooperative. I
    think that's very important.
        And on the question of the Republicans, I just want him to be fair.
    I think that it's very important to be fair and even-handed, because I'm
    confident that any investigations will reveal what I said, that the vast
    majority of people

    [[Page 88]]

    who give do so well within the law and with the best of motives; they
    really believe in what they're doing--on both sides. And what we need to
    do is find out whether there are any systematic flaws here that need to
    be addressed and address them. But in the end, I'm telling you, no
    matter what this hearing uncovers, in the end, if you want to get rid
    of--if you want to turn cynicism back into skepticism, you have to pass
    McCain-Feingold or some other acceptable campaign finance reform.
        Mr. Cannon [Carl Cannon, Baltimore Sun]. I'll take one more
    question.

    Capital Gains Taxes

        Q. Mr. President, in Chicago the day you gave your acceptance speech
    at the convention, you unveiled a plan in which homeowners would not
    have to pay virtually any capital gains taxes. We haven't heard much
    about it since then. And my question is, is that going to be in your
    budget, that proposal, and will you go a little further if the
    Republicans want to do a little more on capital gains?
        The President. The answer is, yes, my homeowners exemption, capital
    gains exemption is in the budget. Everything I talked about at Chicago
    is in the budget. And the capital gains issue has never been a
    particularly high priority with me because I've never seen it
    demonstrated as a big engine of economic growth overall and because I
    thought the previous--as you know, this is nothing new--the proposal
    that the Republicans made in their budget I thought was entirely
    excessive and would really almost squander money by having it be
    retroactive.
        But what I've--I have tried to practice what I preach here. I want
    to keep our powder dry; I want them to keep their powder dry. I will
    present a budget. I know what my priorities are. I know what theirs are
    on the taxes. And then what we need to do is to meet each other in good
    faith. This and all other issues can best be resolved by an early
    attempt to work through to a balanced budget agreement.
        Thank you very much.

    Note: The President's 134th news conference began at 2:30 p.m. in the
    East Room at the White House. In his remarks, he referred to former
    Senator Bob Dole, 1996 Republican nominee for President; Prime Minister
    Binyamin Netanyahu of Israel; Chairman Yasser Arafat of the Palestinian
    Authority; King Hussein I of Jordan; and President Hosni Mubarak of
    Egypt.