[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.