[Public Papers of the Presidents of the United States: WILLIAM J. CLINTON (1999, Book II)]
[August 6, 1999]
[Pages 1390-1393]
[From the U.S. Government Publishing Office www.gpo.gov]
Remarks on the Drought and the National Economy and an Exchange With
Reporters
August 6, 1999
The President. Good morning. Before I leave to go home to Arkansas,
I want to comment briefly on two matters.
First, I want to talk about the action we're taking to address the
terrible, crippling drought that continues to grip so much of our
Nation. Throughout much of this country, we have seen the worst drought
since the Dust Bowl days. And as the National Oceanographic and
Atmospheric Administration will formally announce later today, in
Maryland, Delaware, New Jersey, and Rhode Island, this is the worst
drought for farmers ever recorded.
Such a natural calamity can have devastating consequences, not only
for farmers but for small businesses and communities that depend upon a
thriving agricultural sector and for the electric power systems so vital
to our Nation. We're worked hard to help the victims of the drought and
the heat wave. But as weather disruptions become even more common, and
they will, they will demand a more coordinated response by the National
Government. So today I'm directing that the White House immediately
convene a task force of the relevant cabinet agencies to coordinate our
efforts and focus our attack on this problem. We must do more. It is our
duty as a national community.
Second, I want to talk a little more about our efforts to continue
our prosperity for all Americans. For 6\1/2\ years now, we have pursued
a different economic strategy from the previous 12 years; one based on
fiscal discipline, investing in our people, selling our products around
the world. It has produced sustained prosperity, the longest peacetime
expansion in history. Now, it has also produced an era of surpluses
after 12 years in which we quadrupled the national debt. This is
working. Today we received more evidence.
Just this morning it was announced that America's remarkably low
unemployment rate remains at a remarkably low rate of 4.3 percent, that
inflation is low, and that last month alone, over 300,000 new jobs were
created in America. This brings the total since January 1993 when I took
office to 19.2 million new jobs.
We should not abandon a strategy that is working, especially since
now we are beginning an era of surpluses which will enable us to meet
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our big, long-term challenges for the 21st century, the aging of
America, the education of our children, sustaining our long-term
economic growth. Therefore I am disappointed, though not surprised, that
the majority party in Congress has chosen to pass its massive tax cut;
one that plainly would damage our economic future and make it impossible
to secure and modernize Medicare. But again, I want to assure the
American people--because this tax cut will not save and strengthen
Medicare, because it will not add a day to the Social Security Trust
Fund, because it will not pay down the debt and pay it off for the first
time in over 150 years--this tax cut will not become law.
This morning it was reported in the press that the Republican
leadership has revealed that actually they have the secret strategy even
to spend the Social Security surplus. They very explicitly want to raid
the Social Security surplus to pay for huge economic--huge tax cuts and
a risky economic scheme. They say they're spending more money now to
force that result. Now, that's the sort of thing they did before that
got us in trouble and gave us an average unemployment rate that was too
high and a growth rate that was too low and huge, huge deficits.
This really troubles me because for the last 2 years they have
promised the American people they would work with us to save Social
Security first. I can think of nothing more cynical and irresponsible.
My strategy is still the same. Let's do first things first. Let's save
Social Security, save and strengthen Medicare, pay off the national debt
for the first time since 1835, figure out what we have to invest in the
education of our children and in the national defense and preserving the
environment and our essential mission, and then give the rest of the
money back to the American people in a tax cut.
We can have a tax cut, but it is wrong to put the cart before the
horse. It is wrong to plan the vacation before we pay the home mortgage
and send the kids to college. That's what they're proposing to do. It is
wrong. It will take us right back to the situation that got us in so
much trouble in the 1980's, and I will not countenance it. But we can
make progress.
Just today there was a report that, led by the Republican physicians
in the House of Representatives, enough Republicans have joined the
Democrats to guarantee that the House will pass a strong Patients' Bill
of Rights. This is the sort of thing we can do if we work across party
lines, as we did with welfare reform, as we did in the Balanced Budget
Act of 1997. We can do something that would have seemed impossible just
a few years ago. We can pay off the national debt, keep interest rates
low, and give our children a healthy economy for a generation. We can
save Social Security. We can save and strengthen Medicare with
preventive benefits and the prescription drug. We can do these things.
We can invest in our children's future. We can use this historic
opportunity of a lifetime to do our duty by the next generation.
This is not a time to walk away from that duty, and again I implore
the Members of the Republican majority to come up with their own
Medicare plan, sit down with me and talk about it, figure out what we
have to spend and invest, and then we can give the rest back to the
American people in a tax cut. But we have to do first things first.
I will not--I will not see, after 6\1/2\ years of progress, us
return to the problems that we faced in the years before I took office.
We're not going to do it. It is not right. We should be looking to the
21st century and facing the challenges and doing right by our children.
And that's exactly what I intend to do.
Drought Relief and Emergency Assistance to Farmers
Q. Mr. President, on this Federal drought task force, sir, what
specifically do you have in mind? What could the Federal Government do
that it's not doing now? And how do you respond to critics who say you
haven't pushed hard enough for drought relief now for drought-stricken
farmers?
The President. Well, I think that there should be more drought
relief in the agricultural efforts. I believe we have to go back and,
before the farm bill comes to me--the emergency farm bill that is
working its way through Congress is designed largely to deal with the
problems of the last 4 years: record-high world crops, the collapse of
the markets in Asia, the collapse of the prices, and that's important
because that deals with what all the farmers do off the east coast. But
if you look at what they're facing here, there needs to be a special
provision to deal with the drought crisis. And I hope that and believe
that there will be.
So, I wish we could have done it before the August recess, but I
think it will be there in
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time to aid the farmers. I don't believe that this Congress will walk
away without doing something to deal with the emergency problem caused
by the drought. I'm going to be with James Lee Witt in Arkansas tonight. We're both going to be home, and I
expect to have a discussion with him about it, about what we should do.
Yes, go ahead.
Q. And what about the task force?
Nomination of Roger W. Ferguson, Jr.
Q. What about Roger Ferguson? We understand that you're going to
appoint him today to the Fed?
The President. I am. He will be the first African-American Vice
Chair of the Fed. He is superbly qualified. He has served well. And I am
very excited about the prospect of his service. I'm glad he's willing to
do it.
Tax Cut
Q. Mr. President, you've made a point of saying that the only way of
strengthening Medicare and meeting your priorities would be to have a
tax cut in the $300 billion range. Are you saying that the Republicans
have to come down to that range? And if so, if it were to include an
across-the-board tax cut or components that you don't philosophically
agree with, would you be willing to entertain those as long as it's in
the $300 billion parameters?
The President. No. Let me back up and say first of all, the most
important thing to me is that Congress engage in the same exercise I did
and that I believe the Democrats on the Senate Finance Committee and the
House Ways and Means Committee tried to do, which is to say, what do we
believe it will take to secure Medicare, provide a modest prescription
drug benefit, these preventive changes, and all the modernization and
competition things that I think we all agree need to be done? What will
it take to do that?
What does the Congress--even the Republicans are up there spending a
lot of money. What about the money they're going to spend over and above
the '97 balanced budget limits for education, for medical research, for
the teaching hospitals, the inner-city hospitals, the therapeutic
services? What about the veterans? Have they decided--what do they want
to spend for defense? And we have to protect Social Security.
Now after we do all that, then they ought to ask themselves what
their revenue estimates or whatever revenue estimates they intend to
use--what is left? And then that is how we ought to determine the size
of the tax cut. We're doing this backwards. So you have this curious
situation where the majority party is both passing a big tax cut and
passing big spending bills without any sense of how this is going to be
reconciled. So to me, the most important thing is that we engage in the
same process, that we put first things first.
Now, if we can agree on an amount, do I have to be flexible on how
it's done? Of course I do; they have more votes than we do. Even the
Democrats in Congress had a different plan than I did, and I thought
they had some good ideas. The most important thing is that we engage in
a process that saves Social Security and Medicare, that pays the debt
off, and that continues to invest in education, defense, and the things
we have to invest in. Then I think we ought to give whatever's left back
to the American people in a tax cut. I obviously will argue for the
fairest possible way.
I mean, if you look at the tax cut they adopted, the top one percent
get 25 percent, the bottom 81 percent get 25 percent. So I think that,
you know, 75 percent of the benefits go to the top 20 percent of the
people. I think that there are problems with it, but I'm--clearly we'd
have to negotiate the content, the details. But the amount should be
determined not by politics but by arithmetic and by what we agree on in
Medicare and the investments we agree to make in our country's future
and our education and defense and the environment and by what we have to
spend for the agriculture, for the veterans, for the problems that are
now out there with the teaching hospitals, the inner-city hospitals, the
therapy services have been canceled, those kinds of things. We need to
find out what we are going to do and what we have to do and what is
right for the long-term interest of America, and then we can have the
short-term tax cut.
And let me just make one other point about that, as we celebrate
300,000 more jobs and finally breaking the 19 million job barrier. We
have seen warning after warning after warning in the business press in
the last 2 weeks that a big tax cut in the face of this growing economy
would be viewed as an inflationary measure which would cause the markets
to raise interest
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rates, which would turn right around and take the benefits away from
ordinary Americans that they get from tax cuts. If you get a tax cut
today and the tax cut causes higher home mortgage rates, higher car
payment rates, higher interest--credit card rates, higher college loan
rates, and a weaker economy, then it won't take long for that tax cut to
disappear in the flash of an eye. And that's another thing that ought to
be considered here.
Fed Chairman Alan Greenspan and Inflation
Q. Mr. President, regardless of the tax cut debate, the unemployment
report today was only the latest in a series this week that have raised
concerns about inflation. Would a small increase in interest rates now
be an understandable response to that? And secondly, have you made any
decisions on Chairman Greenspan and another term at the Fed?
The President. Well, first of all, I think he has done a terrific
job, and they will make their own judgments. But what I am doing is
designed--he testified in the Congress along these lines. Now I'm very
gratified that the actual inflation rate is not high. It is true that
we're finally getting some wage increases the last 2\1/2\ to 3 years for
ordinary people, and they're getting ahead again after 20 years of
falling behind. And I think that's good. But we--what--we should do
everything we can, those of us with political responsibilities in the
Government, to fight inflationary pressures so we continue to create
jobs and raise incomes without inflation which will certainly raise
interest rates. The market will raise them, whatever the Fed does, if we
really have big inflation come back into the economy.
So I'm doing my best to hold inflation down, and that's the signal
that I want to send today. I never comment on the interest rate
decisions of the Fed, and I don't want to start now. I think that we
have had an independent policy, but our policies have reinforced one
another, which is to have growth and jobs without inflation. And that's
what I think we should do.
Thank you very much.
End of the Fiscal Year
Q. The end of the fiscal year is just 2 months away. Do you think
we'll have a train wreck, sir?
The President. No.
Note: The President spoke at 9:50 a.m. on the South Lawn at the White
House prior to departure for Little Rock, AR. A portion of these remarks
could not be verified because the tape was incomplete.