    [Public Papers of the Presidents of the United States: WILLIAM J. CLINTON (1999, Book II)]
    [August 4, 1999]
    [Pages 1378-1380]
    [From the U.S. Government Publishing Office www.gpo.gov]

    [[Page 1378]]

    Remarks on Reducing the National Debt and an Exchange With Reporters
    August 4, 1999

        The President. Good afternoon. I've just had a meeting with the
    members of my economic team, and I'd like to talk a few moments about
    the course we have decided to chart for the future.
        Seven years ago, when I ran for President, I said we had to put our
    fiscal house in order, to start living within our means. Most Americans
    agreed, but few believed we would do it. Irresponsible policies in
    Washington had piled deficits upon deficits and quadrupled our national
    debt in the 12 years before I took office. As a result, interest and
    unemployment rates were high, and growth was low.
        In 1993 Vice President Gore and I took office determined to change
    our course, to follow a new economic strategy founded on fiscal
    discipline, investment in our people, and expanded trade. Today the
    success of that strategy is very much in evidence. We have balanced the
    budget, turned a deficit of $290 billion into a surplus of $99 billion,
    the largest ever. Since 1993, our economy has produced almost 19 million
    new jobs, wages and homeownership are high, inflation and unemployment
    the lowest in a generation.
        America has come a long way in the last 7 years, from recession to
    recovery, from economic disorder to a fiscal house finally in order. We
    have even begun to pay down our debt. Just this week our administration
    announced that the Federal Government will pay down more than $87
    billion this year alone, the largest reduction in our Nation's history.
    Over the last 2 years, we've paid down over $142 billion.
        The debt held by the public is now $1.7 trillion--that's $1.7
    trillion--less than it was projected to be when I took office.
        Furthermore, I have proposed a balanced budget that would actually
    eliminate the debt by 2015. By putting first things first, by saving
    Social Security and strengthening Medicare, our Nation can actually
    become debt-free for the first time since 1835, when Andrew Jackson was
    President.
        Today the Treasury Department has proposed new steps to further our
    progress. Secretary Summers discussed
    them earlier today, but I just want to summarize. These proposals would
    help us to manage Federal finances in a new era of budget surpluses.
    They would give the Government the same kind of tools, the same
    flexibility that families and companies have in managing their finances.
    They would, in effect, allow us to refinance old debt and pay it down on
    the best terms possible, saving taxpayers billions of dollars in the
    process.
        If past policies brought a vicious cycle of budget deficits and high
    interest rates, our new economic strategy drives a virtuous cycle of
    budget surpluses and low interest rates. We know what paying down the
    debt means for America's families. It is the equivalent to a tax cut
    worth hundreds, even thousands of dollars to them in lower interest
    costs. Smaller debt brings lower interest rates. When interest rates
    fall, more families can afford a home or a car or a college education
    for their children; more businesses borrow more to invest, boosting
    productivity and creating more jobs.
        In the past 7 years, we've balanced Washington's books; we've cut
    its credit card balance. Now let's refinance our Nation's mortgage and
    then wipe the ledger clean. Paying down the debt creates wealth, creates
    jobs, creates opportunity. It's the right and responsible thing to do,
    and we have the chance of a lifetime to do it.
        If we're to make the most of this prosperity, we simply have to put
    first things first. We should maintain our fiscal discipline by
    investing the bulk of the surplus to pay down the debt, save Social
    Security, strengthen Medicare and modernize it with a long-term, long
    overdue prescription drug benefit. We should honor our values by
    honoring our commitment to educate our children, protect our
    environment, strengthen our defense, and fight crime. And we should move
    forward with an economic strategy that is successful and sound, not
    revert to one that is a proven failure.
        On Capitol Hill, Members of the majority have been at work on a tax
    plan that is risky and plainly wrong for America. Let me repeat what I
    have said many times: If they conclude this plan and send it to me, I
    will have to veto it. I will refuse to sign any plan that signs away our
    commitment to America's future, to

    [[Page 1379]]

    Social Security, to Medicare, to paying down the debt. We can do these
    things and still have a sensible tax plan, and I remain committed to
    work with any Members of Congress, from both parties, to achieve that
    goal.
        Thank you.

    Tax Cut Legislation

        Q. Mr. President, do you believe you can reach an agreement with
    Republicans later in the year on taxes, and is $300 billion the most you
    would be willing to allow for a tax cut?
        The President. Well, I hope we can reach an agreement. And let me
    suggest that the way to proceed--and I think that the only way we can
    reach an agreement is if they would do what I have tried to do. I think
    first they ought to produce their own Medicare plan that lengthens the
    life of the Trust Fund and provides a modest prescription drug benefit.
    Then, of course, they have to calculate how much more money they want to
    spend over and above the caps. And they have to figure out what's left,
    and whether they agree with me that we should pay off the debt.
        We could certainly do this. I want all of you to understand, for me
    this is not a political issue; this is a matter of basic arithmetic. We
    returned to basic arithmetic in 1993, and it has served us well. Gene
    Sperling once said that to pass the big tax
    cut first, without knowing how you're going to meet your
    responsibilities, is like a family saying, ``Let's take the vacation of
    our dreams, and when we get home, we'll try to decide if we can pay the
    home mortgage and send the kids to college.'' I think that the order of
    this is wrong.
        So I think if they would have a very clear idea of what their
    Medicare proposal would be and what the impact of their proposed
    increases in expenditures would be, then I think we'd be able to make an
    agreement. And I'm willing to work for it, and hope we can achieve it.
        Q. Mr. President, by the time Congress comes back from its recess,
    it will be a little more than a year towards the 2000 election. What is
    to make this--what is to possibly keep this from becoming a political
    issue, if it isn't already?
        The President. Every issue in Washington, I suppose, is a political
    issue. The point I'm trying to make is, if we want to save Social
    Security and Medicare and pay the debt off, then you have to figure out
    how much money you have left and how much money the Congress is
    determined to spend over and above the present budget caps, and you can
    spend what is left on the tax cut.
        But to pass a tax cut first and then say, well, I'm sorry, we can't
    really save Social Security and we're not going to lengthen the life of
    the Trust Fund, or, I'm sorry we're not going to lengthen the life of
    the Medicare Trust Fund a day--neither one a day under their proposal--
    and we may or may not be able to spend money on education and national
    defense and, if we do, we'll go back into deficit spending again--I
    don't think we want to get into that.
        So I'm saying--you asked me, can we achieve this? Of course we can.
    Remember, in 1996, in an election year, we passed welfare reform with
    overwhelming majorities of both parties in both Houses. And yesterday we
    celebrated cutting the rolls in half. And 12,000 companies are helping
    us to hire people off welfare. So we can do this. We can do this.
        We were never going to be able to do it, I might add, unless we had
    big majorities of both parties in both Houses. It is in our interest, if
    you want to talk about it in that way, to do the people's work here, to
    do it this year and to do it next year. And I think it's terribly
    important, so I hope we'll do it.

    Social Security Reform Plan/Talk Magazine Interview

        Q. Mr. President, why haven't you submitted a plan to reform Social
    Security? And secondly, sir, would you also comment for us on the First
    Lady's interview with Talk magazine and clarify for us, if you will,
    what she meant in saying that you were scarred by abuse and that's
    affected your behavior?
        The President. Well--what was the first part of that question?
    [Laughter] I'll answer the second part. What's the first part?
        Q. The first part was why haven't you submitted a plan to reform
    Social Security yet.
        The President. Well, I am working on that, and I have been talking
    to Chairman Archer about it, and I would be
    prepared to do that. But keep in mind, that is not what is holding this
    up, because we both agree on what we have to do with the surplus. That
    is, we both agree--and let's not lose sight of the fact that we've
    actually reached one agreement here; we both agreed to keep the Social
    Security portion

    [[Page 1380]]

    of the surplus apart from regular Government spending.
        My plan, however, is more detailed than theirs in the sense that I
    also propose to take the savings that we receive in 5 years of this 15-
    year period on the debt reduction and put that back into the Trust Fund
    to lengthen the life to 2053. If Congress wished me to do that and that
    would help to get this agreement--I've been working very hard on this,
    and I would be prepared to do that.
        Now, let me just say on the other thing, I think anybody who read
    that article would draw two conclusions. You can draw a thousand
    conclusions, but I think there are two conclusions that anyone would
    have to draw, amid all the differences they might have in the way they
    read the piece. One is that my wife
    is an extraordinary person with a passionate commitment to public
    service and a genuine record of important achievement. And the second is
    that we love each other very, very much. And I think those are the two
    important things.
        Now, I don't believe that anybody could fairly read the article and
    think that she was making any excuses
    for me. I haven't made any excuses for what was inexcusable, and neither
    has she, believe me. And as to my childhood, everybody knows that's
    looked into it I didn't have a bed of roses as a kid. But I can tell you
    this, as I think about other children in the world and in our country
    that have difficulties growing up, I am convinced from my own life and
    from my research and from my experience with other children, the most
    important thing is that every child needs to know growing up that he or
    she is the most important person in the world to someone. And I knew
    that, so--I knew that. And I have no complaints.
        Helen [Helen Thomas, United Press
    International], happy birthday. [Laughter]
        Ms. Thomas. Thank you. Thank you, Mr.
    President.
        Q. Mr. President, the First Lady has indicated that the trauma of
    this was to the degree that you can't even take it out and look at it
    anymore. Are you trying to work through the issues and look back over
    that time of your life?
        The President. Look, I think that I have said all I need to say
    about that. I have--I think every reflective person thinks about his or
    her life, but what I conclude about my childhood is what I said. It had
    its really tough moments, but I always knew I was well loved. And I
    think that's important for all of our children.

    Japanese Economy

        Q. Mr. President, are you going to call the Prime Minister of Japan
    to discuss the fluctuations in the currency market? And how concerned
    are you that they're more interested in market manipulation and
    intervention than in stimulating domestic demand-led growth, which
    Secretary Summers and Secretary Rubin have advocated ad nauseam?
        The President. The first--Japan, how concerned I am about Japan? I
    think, first of all, in the last 6\1/2\ years, we've seen the currency
    fluctuations. They go up; they go down. I don't have anything to comment
    about that.
        I think that we do see some signs that Japan's economy is beginning
    to grow and that Prime Minister Obuchi has
    formed a coherent and strong and effective government and has secured
    the necessary support from the Japanese people to continue to move
    forward.
        So we will continue to consult with Japan about what we think is
    important for their economic recovery, as we should because they're our
    partners, and they're our friends and our allies, and their recovery is
    critical to Asia's recovery. But I basically believe that the trends are
    positive there, and so I have a positive view.
        Thank you.

    Note: The President spoke at 12:15 p.m. in the Rose Garden at the White
    House. In his remarks, he referred to Prime Minister Keizo Obuchi of
    Japan.