    [Public Papers of the Presidents of the United States: William J. Clinton (1997, Book I)]
    [May 2, 1997]
    [Pages 533-537]
    [From the U.S. Government Publishing Office www.gpo.gov]

    Remarks Announcing the Budget Agreement and an Exchange With Reporters
    in Baltimore, Maryland
    May 2, 1997

        The President. For more than 4 years now, I have worked hard to
    pursue a strategy that would keep our economy growing and creating
    opportunity for the American people, giving people a chance to be
    rewarded for their labors, and also imposing upon ourselves the
    discipline necessary to prepare for the future and to relieve ourselves
    of a lot of the problems that had been accumulated over the last several
    years, especially the deficit.
        Now, we have reached agreement, in broad but fairly specific terms
    that I am satisfied will do that, with the Republican leaders today that
    would balance the budget by 2002, continue to increase our investment in
    education, in science and technology and medical research, require us to
    continue to show great discipline in other areas and to continue to
    downsize some Government operations. It would invest in doing what I
    think is important, to be sure that we can move people from welfare to
    work who are going to be required to go to work. It would expand
    coverage to millions of children who presently do not have health
    insurance. It would restore cuts to benefits for legal immigrants who
    are in this country who have sustained injuries

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    and other problems for which they would otherwise be eligible for
    benefits. It will extend the life of Medicare and secure the integrity
    of the Medicaid program between now and 2002. It will be the first
    balanced budget in three decades.
        It's a good thing that it's coming today, when we learned that our
    employment rate had dropped to 4.9 percent for the first time in 24
    years. We know that we have the biggest decline in inequality in our
    work force since the 1960's, and we've seen our economy produce the
    largest number of new jobs since 1993 ever produced in a 4-year period.
    That happened because a lot of the people standing up here with me right
    now had the courage to vote for a plan to bring the deficit down in 1993
    and get interest rates down and investments up.
        This agreement will help us to finish the job. I have spoken several
    times over the last several days with Senator Lott and with Speaker
    Gingrich. I want to thank them personally for negotiating with me
    openly, candidly, and I'm convinced, in complete good faith.
        I have also had occasion to speak with the representatives of the
    Democratic caucus, obviously, who were in this budget negotiation,
    Senator Lautenberg for the Democrats and Congressman John Spratt from
    South Carolina, and the Republicans who were represented by their
    chairs, Senator Domenici and Congressman Kasich. I want to thank them
    all. I want to thank Senator Domenici and Congressman Kasich; they
    worked very hard. And we know there are significant differences between
    us in how we look at what is the best way to balance the budget, and
    they tried to bridge these gaps. Congressman Spratt and Senator
    Lautenberg did, as well, and I'm very proud of all four of them. They
    served America well. They put the interests of the country first in
    trying to work through to get us as close as we are today. And so I
    appreciate that very much.
        Now, let me say again--let me give you just some of the details very
    quickly. The plan will protect Medicare, extending the life of the Trust
    Fund for a decade, extending new benefits for annual mammograms and
    diabetes screening. Home health will be shifted from Part A to Part B,
    and there will be a modest premium for home health services being phased
    in at one dollar per month, a year.
        Second, and perhaps most important, this budget meets my goal of
    making education America's number one priority on the edge of the 21st
    century. It will have the largest increase in education funding in 30
    years. It will have the largest increase in Pell grant scholarships in
    20 years. It will help us to make sure that every 8-year-old will be
    able to read, every 12-year-old can log on to the Internet, every 18-
    year-old can go into college. I am very, very pleased that it will also
    include in a tax cut, per person, aid to help people go on to college
    and to finance college education.
        Third, as I said, it will extend health insurance to 5 million
    uninsured children. This is a major breakthrough in our efforts to move
    toward coverage for all Americans.
        Fourth, it will give businesses incentives and work with mayors to
    hire people from welfare to work. It will also, as I said, address the
    concerns I raised in last year's welfare law--restoring benefits to
    disabled legal immigrants and moderating excessive cuts in food stamps,
    along with giving the States a reserve, so that if people would be
    unjustly cut off food stamps because they simply cannot go to work, the
    States will be able to avoid malnutrition and real harm to those people
    in these cases.
        Fifth, it will protect the environment, providing funds to clean up
    500 of our most dangerous toxic waste sites, cleaning up toxic sites in
    urban areas, and adding resources for environmental enforcement.
        Sixth, it includes tax relief for the American people, but thanks to
    the rules of the Senate and the agreement of the leaders, the tax relief
    will be limited. And we'll know the dollar amount not only for the first
    5 years but for the second 5 years following, so that we will not run
    the risk of having an explosion in the deficit as a result of unintended
    leaks in a tax program, so that when we tell the American people we're
    going to balance the budget, we know we can keep it balanced and we
    won't get ourselves back into the difficulties we've seen over the last
    15 years.
        Like Americans of all political views, I have been deeply committed
    to this, but I wanted a balanced budget with balanced values. I believe
    we have got it today. There are things in this budget that--everyone
    will find something that he or she disagrees with; everyone could find
    something that he or she wishes were in the budget. There is no perfect
    agreement,

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    but as I said, we know America is more prosperous when we have fiscal
    discipline, when we invest in our future, and when we do it in the right
    way. We have evidence of that.
        It will never get any easier to do this job. Senator Lott made that
    point to me on the phone the other night. He said, ``You know, when
    you're doing well, it's easier to balance the budget than it is when
    you're not. This is not going to get any easier. We have to do it now.''
    And I said, ``I agree with you, and we are going to do it.''
        So I ask Americans of all political parties and all philosophies to
    look at this plan, give it your support. Let's balance the budget and
    get on about the new business of preparing America for a new century.
        And I thank you, and I'd like to ask Senator Daschle now and come up
    and say a word.

    [At this point, Senators Tom Daschle and Frank Lautenberg,
    Representatives Charles Stenholm and Steny Hoyer, and Vice President Al
    Gore each made brief remarks.]

        The President. Thank you. I just can't help saying, there for a
    moment I thought the Vice President was sad he's not going to get to
    cast another tiebreaker in this vote. [Laughter]
        The Vice President. Right.

    Medicare and Medicaid

        Q. Mr. President, during the campaign, you repeatedly expressed
    concern about cuts--potential cuts in Medicaid and Medicare. Are you
    satisfied that no one will be hurt----
        The President. Yes.
        Q. ----in the changes?
        The President. Yes, I am. Let me say, first of all, I think we have
    improved the Medicaid program in this budget agreement--and I want to
    make full disclosure here--with the full support of the Republican
    negotiators, over and above what it was in the budget I presented. Now,
    that's been made possible partly because we know the economy is getting
    better, but we have.
        The Medicare program, I'm convinced--first of all, the savings in
    Medicare which I proposed, meeting the Republicans halfway between our
    differences last time, are, by and large, rooted in policy, which I
    believe is good policy, designed not only to save money for 5 years but
    to save money over the long run. We need to change some of the policies
    to show appropriate discipline. They don't hurt people, but they will
    impose more rigor in the system.
        The modest one-dollar-a-month premium for home health services, I
    think, is an appropriate contribution, given the fact that people, I
    believe, at 120 percent of the poverty line and down are exempted. I
    think it's an appropriate contribution for what is the fastest growing
    element of the Medicare program and something that--150 percent, they
    just told me, are excluded, and below. The home health part is the
    fastest growing part of Medicare and has not been subject to any
    premium, and I think it should. There should be some contribution there,
    just as is associated with other elements of Part B. But it will not be
    burdensome, and the aggregate premium will still be much lower than
    would have been the case if I hadn't vetoed the budget in '95.
        So I think we've reached out to the health care experts in our
    caucus and in the Republican caucus. We've reached out to interest
    groups throughout the country that would be affected by this. I believe
    they will support this. I believe there will be broad support for this,
    and I think it will be seen for just what it is. It will preserve and
    strengthen the integrity of the Medicare program for a decade. We can't
    responsibly let this Trust Fund get down to a year or two and just kick
    it down the road for another year or two. We need to keep it a decade or
    more out all the time.

    Budget Negotiations

        Q. Senator Daschle described this as an agreement that was
    tentatively reached 24 hours ago. Can you give us an idea of what
    transpired between that point and now? [Laughter]
        The President. I don't think it would be----
        The Vice President. Sausage. [Laughter]
        The President. Let me just say, I think what Senator Daschle said is
    accurate, but let me try to recast it a little bit. We had some broad
    outlines 24 hours ago. We went back to our folks; they went back to
    theirs to talk about some details. We came back with some details; they
    came back with some details. We got some of the details we wanted, and
    some we just had to abandon--and knowing that there will still be
    disagreements within various categories as this budget comes up.
        Keep in mind, this is an agreement. Then it has to be embodied in
    law. Then it has to be embodied in specific appropriation bills and

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    tax bills this year and in the years to come. So there is still some
    room for some debate between the two parties and within the two parties
    over some issues. But the framework is pretty specific--guarantees the
    essential elements that were necessary to get the Democrats and the
    Republicans to support it and to get the President to support it.
        So we did get some more specifics in and had to leave some more
    specifics out in the last 24 hours, but I think, in fairness to the
    Republicans with--as I said, I am convinced they negotiated with me and
    with Senator Lautenberg and Mr. Spratt in complete good faith. And in
    fairness to them, without talking to them about it, I don't think I
    should characterize exactly what happened in the last 24 hours.

    Tax Cuts

        Q. Mr. President, how big is the tax cut in the package? Can you
    give us any indication? Who will get tax relief?
        The President. It is a tax cut of a net of $85 billion, which is--
    over 5 years--which is considerably smaller than we were--they were
    discussing. And then in the second 5 years, it must not exceed about a
    hundred and--what is it? About $170 billion, $165 billion, something
    like that.
        And you'll get briefings on that; back at the White House they'll
    explain it. But also, we have gone as far as we could, keep in mind, the
    tax-writing committees were not part of this negotiating process, the
    budget committees were. So let me finish. We have gone as far as we
    could also in discussing what the components are. You know the thing the
    Republicans want in it. You know we want an education tax cut as well as
    some environmental relief for brownfields and some other very specific
    things, and we want to protect the tax cuts that are progressive in our
    Tax Code, particularly the earned-income tax credit for low income
    people, the low income housing credit, and we want to try to protect the
    pension programs from being raided. And we've gone about as far as we
    can in doing that in an agreement that does not include the leaders of
    the tax-writing committee.
        And Secretary Rubin, who is our guardian on that, finally signed off
    and said, ``Well, this is the best we're going to be able to do.''

    Budget Negotiations and Reaction

        Q. Mr. President, the Republicans are happy they got their tax cut;
    you're happy you got your investments. It can't all be win-win. What did
    you have to give up? Where will Americans feel a pinch? Where's the
    sacrifice?
        The President. Well, first of all, they're taking a smaller tax cut
    than they had originally sought. We're providing larger savings in this
    budget than previously in Medicare and in other areas. But the growth in
    the economy has made it easier than it otherwise would have been. And
    we've all acknowledged that. I think we have to acknowledge that.
        So, for example, the difficult questions that had been raised around
    the CPI--the cost of living adjustment for benefits--the sense of both
    sides is that that should continue to be handled in the ordinary course
    of business, that there will be an adjustment of some kind coming out of
    the Bureau of Labor Statistics in the process, that we have a fairly
    good idea of what it is. But even if it's not sufficient to cover
    everything--and they acknowledge they can't analyze all the relevant
    factors--that is an issue which now can be handled outside of these
    budget negotiations. And that is an issue which would have been very
    difficult here.
        Q. Mr. President, how big a selling job do you still have?
        The President. Well, I don't know. We're going to have to see how
    the Democrats and Republicans react to it. The Democrats will think that
    the tax cuts are too big and too skewed to people with high incomes. The
    Republicans will think that we're investing too much in education and
    other things; I think many of them may think that. And I'm sure that
    there will be some on both sides who won't vote for it.
        And then some people will be disappointed that even though we did
    some good reform in the Medicare program, that without a consumer price
    adjustment that's larger, some will say we're not doing enough to save
    Social Security. My argument is we can look at saving Social Security
    independent of this; let's balance the budget. We don't have to mix the
    two, and we can take that on its own merits.
        But there will be a lot of things in here that--as I said, no one
    will look at this budget and say, ``This is perfect. It has everything
    in it I want, and there's nothing in it I don't like.''

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    So everybody will say, ``I wish something were in it that isn't.'' I
    wish that there were things that are in it that weren't. But I think
    we've got a good shot at getting the majority of both parties in both
    Houses, which has been my goal from the day one. And if it happens,
    America will be much better off.
        Keep in mind, the bottom line is, if we show discipline here and
    keep interest rates down by balancing the budget, the American people in
    the private sector will grow the economy for us. That solves a lot of
    problems. If we show discipline in continuing to invest in our future,
    then we will grow the economy in a way that will give us high-wage jobs,
    higher incomes, and greater equality, which will solve our problems for
    us. And meanwhile, we'll have a little honest--an honorable compromise;
    that's part of the way the process works.
        Thank you. There will be a briefing on more specifics down at the
    White House shortly.

    Note: The President spoke at 3:58 p.m. while attending a Democratic
    senatorial retreat at the Harbour Court Hotel.