[Weekly Compilation of Presidential Documents Volume 29, Number 8 (Monday, March 1, 1993)]
[Pages 245-252]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
Remarks on the Economic Plan in Hyde Park, New York

 February 19, 1993

    Thank you very much, my good friend, James Roosevelt, who has 
likewise been an inspiration to me over the years, and who knows and 
cares a great deal about a subject that we must all come to grips with 
this year, the crisis in health care; to Senator Pat Moynihan, one of 
the most productive people in public life in the 20th century in 
America.
    And Mrs. Cuomo, I'm delighted to see you here, and we wish Governor 
Cuomo good health. He might have thought to himself on deciding whether 
to do the responsible thing and take to his sick bed today that he's 
probably heard this speech before, and he's probably given it before. 
[Laughter] I can't tell you how grateful I am to your Governor for his 
support and his wise counseling. We had a delightful time in the White 
House, Hillary and I and Governor and Mrs. Cuomo, not very long ago. 
It's something I will treasure for a long time.
    I'm glad to see Lieutenant Governor Lundine and attorney general 
Abrams and Mem- 

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bers of the Congress, and members of both parties from the New York 
Assembly and State senate, and people here who are here because you are 
Americans. You're Republicans, Democrats, independents. I am glad to see 
you all here in this monument to America's possibility.
    I wanted to come here for a thousand reasons; some of which are 
obvious. During the New York primary, which was successful in its 
conclusion but rather rough in its prelude on me--[laughter]--I was 
absolutely enthralled by a book about President Roosevelt called ``The 
First Class Temperament'' written by a man named Jeffrey Ward. And I 
read a lot about Hyde Park. And the thing that moved me most was the way 
President Roosevelt came to grips with the fact of his polio and learned 
to live with it and learned to triumph over it and learned to use it to 
make himself stronger inside and not to be defeated by it. And ever 
since, I have been transformed from someone who had a mild interest in 
coming here to someone who had a burning passion to see this place. And 
I am honored to be here today.
    I want to say one more word, if I might, about Senator Moynihan 
because we've worked together over the years on a lot of things. I 
helped him to rewrite the welfare laws of our Nation in the late 
eighties and what he said was the most significant social welfare reform 
in 30 years, if only we could implement it. And one of the reasons I ran 
for President is to try to change the welfare system as we know it. I 
have watched him over more than two decades personally warn us about the 
decline of America's families, the development of a new and possibly 
permanent underclass in America, the importance of restoring the value 
of work to our social programs, a decade ago warning about the breakup 
of what was then the Soviet Union when most people thought that he was 
speaking a foreign language. And I can tell you that with leadership 
like his we can solve the problems this country faces today.
    I think of that because--[applause]--yes, you can give him a hand. 
That's good. We were about 45 or 50 minutes away from here when we 
landed in the airplane, and all along the way there were people, school 
children, hundreds of them, lining the way with their signs; and the 
young people at Marist College having even printed signs; many people 
were young; some were older. A lot of them were terribly young. Most of 
them were I'd say between 20 and 50, anyway. [Laughter] That's young to 
me, you know. I find myself redefining that word every year. And there 
are all kinds of incredible things: ``Get the U.S. fit,'' one sign said. 
``I want to give something to my country,'' another said. One I might 
have to give a trip to the doctor. It said, ``I want to pay more 
taxes.'' I couldn't believe that. [Laughter] One sign said, ``Shake 'em 
up, Bill.'' One sign said, ``Give Bill a chance.'' One said, ``Turn my 
country around.'' Another said, ``I've got a B.A. and no job; I'm ready 
to change.'' Another said, ``Just do something.''
    Then, of course, there were a few that weren't so favorable, but 
that's all right. That's what this country's all about, too. But I 
couldn't believe the number of people who were there. And I say that 
because as much as anything else, I think our country now is infused 
with a new sense of possibility.
    One of the things that really used to depress me as I crossed 
America last year was the look I saw in so many people's eyes of 
skepticism, almost a painful unwillingness to believe that we can make 
things better, that we could change, that we could come to grips with 
the challenges of our time and overcome them and move forward.
    One of the things that I think--perhaps the most important thing 
that was achieved in the last election year was we had a huge increase 
in turnout, an even bigger increase among younger people, and now every 
day the White House switchboard and the mailroom are fuller than they 
have been in decades and decades because people believe that it matters 
again.
    This country has been kept going through two centuries now because 
of the peculiar mix of the energy of its people at the grassroots level 
and the vision of its leaders. But if you have one without the other, 
the country can't go forward. There have been times in the past when 
leaders have foreseen the future and known what needed to be done, but 
there was no connection with the people and so nothing could happen. 
There have been many times, I'm convinced, when the

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people have been ahead of their leaders. But if they had no visionary 
leaders, nobody to put all that energy together with the levers of 
public authority, nothing happened. We all hope, I think, from whatever 
perspective we come, that we now have a moment in our history where we 
have the energy of the people and a direction we can take.
    I ran for President because I believe this was a critical moment in 
our country's history. And there have been many over the last two 
centuries. I think of the Founding Fathers, who actually welded a Nation 
out of 13 independent colonies when many people--maybe if you'd even 
taken a poll, a majority of the people would have said, ``Who wants one 
army? Who wants one currency? Who wants to really give up all this 
independence we have in New York or South Carolina? What do we have in 
common with those people down there?''
    I think of Thomas Jefferson. Some people thought he was crazy when 
he ponied up $15 million to buy something then called the Louisiana 
Purchase, which most Americans could not even imagine and hardly anyone 
had ever seen. And if he hadn't done it, since I live on the edge of the 
Louisiana Purchase, you'd be listening to somebody from somewhere else 
give this speech today.
    I think of Abraham Lincoln. We now take it for granted that the 
Union would be preserved, that the slaves would be freed, that all this 
would happen. The truth is that a great many people thought there was no 
way to hold this Nation together. And a great deal of what did it was 
his vision and his sheer will.
    I think of President Roosevelt in the depths of the Depression, 
having gone through his personal journey, to cope with his personal 
problems, summoning interior strength and reserve to lift the Nation's 
vision and to make people believe again that by taking one step at a 
time, by coming and building a beautiful school like this with the WPA; 
that if you did enough things like this and you just kept trying long 
enough, sooner or later we would go forward, we would work our way out 
of it by what he called then bold, persistent experimentation.
    Today, I think we need that kind of experimentation based on the 
plain evidence that we are in a rut. What we have been doing is not 
working to deal with the problems we face.
    For about two decades, through administrations of both parties' 
Presidents, we've been steadily moving into a global economy which is 
much more competitive, where other countries have been growing more 
rapidly than we and moving toward our standard of living, where we have 
to compete in all forms of economic life in ways that can force us to 
endure real pain, as you folks in this part of the country have seen 
recently with the difficulties that a magnificent company, IBM, has been 
forced to come to grips with. This is not an isolated event. This is 
part of the passage of time and the economic realities in which we live.
    That global economy abroad has presented us with a lot of challenges 
and a lot of opportunities here. But our ability to deal with it has 
been limited by a lot of the educational and training and social 
problems we have here at home, our racial and ethnic and income 
diversity, the high rates of violence, and the whole pockets of poverty 
we have in this country and lack of investment. We have seen that there 
are a lot of things that are just not quite fitting very well.
    And now we've had two decades in which the wages of most Americans 
have been stagnant compared to inflation. And when you look at the 
rising cost of education, health care, housing, the tax burden, most 
Americans are working harder today than they were 10 year ago for real, 
disposable income that is less because of these sweeping trends.
    For 12 years, we have tried a clear approach to our country's 
problems. When President Reagan was elected in 1980, he ran with a clear 
sense of what he wished to do. He said, ``The Government is the problem 
here. It causes inflation. It causes middle-class people to have 
trouble. What we need is a very restricted role for Government. And we 
will also lower taxes on everybody, but most of all on the wealthiest 
Americans. Because if we give them their money back, they will invest it 
in America, create jobs, drive up incomes, increase jobs, and we will be 
the most prosperous country in the world.''
    Well, I believe that free enterprise is the engine of growth in 
America. We are fun- 

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damentally a conservative, private, capitalist free enterprise country. 
But every other nation with which we compete decided to take a slightly 
different course. They said to themselves in Germany and Japan: Well, 
we're in a global economy in which the government and the people in the 
private sector have to work together. We've got to work together to 
train and educate our people as well as possible. We've got to work 
together to have economic policies that encourage investment over 
consumption so we can always be competitive. We've got to have a good 
trade policy, and we've got to do things that make it possible to create 
high-wage, high-growth jobs so that all the students who go to school 
here will have a future, and so that America will be strong. That's what 
I think we have to do.
    In other words, that is my vision. That is not what we have done. 
What we have done is to try for 12 years to cramp the role of 
Government. Now, look what's happened in practice. In practice, we have 
lowered taxes on the wealthiest Americans. Taxes on the middle class 
have actually gone up in the last 12 years. We have run a horrendous 
Government deficit. The deficit is now 4 times as big as it was in 1980.
    We have seen spending go up in areas that the Government would have 
to move to control, mostly health care and then interest on the debt, 
because when the deficit gets bigger and bigger and bigger, you spend 
more money on the debt. So we have reduced investment, increased the 
debt, moved money upward so that there's been much more inequality of 
income distribution, but we have not seen the kind of investment that 
creates high-wage, high-growth jobs in the emerging technologies that 
guarantee a future for all the young people that live here and 
throughout our land.
    So I ran for President because I really believe we ought to try a 
different course. Not to blame past Presidents. If you look at what's 
happened in Washington, none of it could have happened if there hadn't 
been bipartisan support for the course and support in Congress as well 
as in the White House. This is not about blame.
    I want to simply take responsibility. And as I told the Congress the 
other night, if we turn this country around, I don't care who gets the 
credit for it, either. I just think the time has come to make a change. 
We have tried one thing 12 years. It obviously has problems. It is time 
to change.
    Now, what does that mean? Change for change sake is not good. What 
does it mean? It means to me that we should do the following things. 
First of all, the Government should pursue a policy of increasing 
investment in those things which contribute to a growing economy. What 
are those things? We should invest more than we are now and more toward 
what our competitors do, in the infrastructure of the country, in 
transportation and communications, in environmental cleanup, in those 
things which increase productivity and put people to work.
    It means we should do whatever it takes to educate people for a 
lifetime at very high levels, because the skill level of the work force 
is the single most important determinant of income and the capacity to 
grow new jobs rapidly as new areas of opportunity open up. It means that 
we should invest in partnership with the private sector in new 
technologies which will determine the future of the country. And it 
means we should not give up on those areas where we have a lead. And let 
me just give you two examples:
    One is in computer technology and information technology. That's why 
what's happening to some of our big companies is very disturbing and why 
I'm going to California this weekend to announce a new technology policy 
to try to revitalize this whole sector of our economy.
    I'll give you another example which doesn't affect New York much, 
but it affects our country desperately, and that is aerospace. Boeing 
just announced 23,000 layoffs when we know that aerospace jobs are 
growing in number worldwide, high-wage jobs. And we sat here for 10 
years and let Europe put $26 billion into an airbus program, direct 
government subsidies, to throw Boeing workers, McDonnell-Douglas 
workers, and other aerospace workers in America out of work because we 
said, ``Well, we don't practice those kind of partnerships.'' So we have 
got to face the fact that we've taken a new direction.

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    And finally, it means that we must reduce the Government's debt. 
Why? Because if the debt gets bigger and bigger and bigger, two bad 
things happen: Bad thing number one is the Congress spends more of your 
tax money every year paying interest on the debt rather than investing 
in your future. It's now up to 15 cents on the dollar. If we do not 
change present spending patterns--when you hear people oppose the 
program I outline, ask them what the cost of the status quo is.
    If we behave for 4 more years like we have for the last 12, here's 
what will happen: By the end of the decade, the deficit will be $650 
billion a year, and we'll be spending about 22 cents of every one of 
your tax dollars just paying interest on the debt. We'll be spending by 
then, because of the growth of health care costs, about 65 cents of your 
tax dollars on entitlements, and being in Congress will be a matter of 
how you spend 5 or 6 cents on every dollar. The rest of this will be 
just be rubber stamped. You can just have a computer instead of 
Congress.
    I know what you're thinking. Please don't say that. [Laughter] So, 
forgive me, Senator Moynihan, I had to say that. [Laughter] But you get 
it. I mean, it's squeezing the life out of the money you're giving up in 
taxes.
    The second reason, even more important, is the more money the 
Government borrows every year, the less money there is for people to 
borrow in the private sector and the higher the cost of the money is. 
Just since the election, since we made it clear that there was going to 
be a determined effort to lower the deficit, interest rates long-term 
have dropped considerably. I'll come back to this in a moment.
    But if you think about it, this year if we pass this budget, 
everybody in America who borrows long-term to finance a business, to 
finance a car, to finance a home, to finance credit card purchases, 
everybody that has access to variable interest rates will have those 
interest rates go down. And in my judgment, virtually everybody who has 
credit will save more money in lower interest costs than they will pay 
in higher taxes. Now, that's very, very important.
    Now, how are we going to do this? The first thing we have to do, and 
I mean the first, is to cut inessential Government spending. I've been 
President 4 weeks, and I've found things that I wouldn't have believed. 
The White House, when I became President, was running on Jimmy Carter's 
telephone system and Lyndon Johnson's switchboard. [Laughter] In this--
true--high wage, this high technology era with a procurement system that 
would have broken Einstein's brain. [Laughter]
    There were a lot of things that needed to be changed in the Federal 
Government, and there still are. But in 4 weeks, we have cut the White 
House staff by 25 percent, starting at the beginning of the next fiscal 
year, and reorganized the White House so it will work more efficiently; 
not just cut but serve better. We have authorized in this budget 
administrative cuts in every Government Department, totaling 14 percent 
over the next 4 years for a savings of $9 billion. And there have been 
150 specific cuts in Government programs, including programs that help a 
lot of good people but that I don't think we can afford at the present 
level anymore, programs like the two uranium enrichment facilities we 
have when we now know we only need one. And I was in one congressional 
district where one of those two facilities are this morning.
    You can say these cuts are not difficult, but when you look into the 
eyes of people who may be personally affected by them, they are, 
including reductions in the interest subsidies to the Rural 
Electrification Authority, something that brought electricity to my 
relatives in my State and which is still a very major force. Things that 
have some good in them, but we simply can't afford them.
    We've cut things out that have no good purpose anymore as far as I 
can tell, including a whole slew of commissions. Do you remember when we 
had the Tall Ships come into New York Harbor for the Bicentennial? That 
was a long time ago. Remember that? There's still a Bicentennial 
Commission. [Laughter] That's just one example. It's the funniest, but 
not the most costly. There are a lot of others.
    We have cut back on programs that involve subsidizing activities 
more than we should. The Superfund, for example, has, in my judgment, 
too much contribution from the tax- 

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payer, too little from those who are responsible for the problem, and 
none of the money is being spent right. So far it's all going to 
lawyers. It's all going to lawyers.
    There is a program that I think helps a lot of wonderful people. 
It's a subsidy to sheep growers. You laugh. I asked Senator Moynihan if 
anybody in New York still raised sheep. We had sheep on the farm when I 
was a boy, so I'm more sensitive to this than some are.
    But when I got to studying this, we started to subsidize the sheep 
growers in World War I because we needed plenty of wool for uniforms. 
But the program is still on the books exactly as it was, not designed to 
help the small farmers stay in business, necessarily, but an across-the-
board subsidy of that kind. So I recommended cutting it back. All these 
things have constituencies. But I can tell you, we are going to have to 
prove that we can cut things.
    When Roosevelt talked about bold, persistent experimentation, you 
know what an experiment is in science. It is trying out a new thesis. If 
it works, you incorporate it. You build on it. You go on to the next 
experiment. If it doesn't work, you quit. Government has a one-way 
experiment. We're very good at starting things and absolutely terrible 
at stopping them.
    So what we're going to try to do is start some new things. I want to 
fully fund Head Start. I want a big, new technology initiative. I want a 
big, new technology issue. I want to make it possible for every student 
in this country to borrow the money to go to college and then pay it 
back on favorable terms or work it off in national service as teachers 
or police officers, or working with kids in trouble.
    But we can't do that if we keep on doing everything we used to do. 
We have to stop doing some things we used to do to free up some money 
for things we should do. And we have to cut more in the past than we're 
going to spend in the future, because we have to use some of that money 
to reduce the deficit, too. So I ask you to support that.
    Now, in 4 weeks we found 150 specific cuts. As I said to the 
Congress the other night, in all good conscience to both the Republicans 
and the Democrats, I've just been there 4 weeks. Some of them have been 
there a lot longer than I have, and if anybody's got any other ideas, 
I'd like to have them. I just got started. You can look forward to more.
    I also think as I said in the campaign that we have to raise some 
more money. I now believe what I said might be true in the campaign, but 
I didn't think it was, that we have to raise it from a broader base than 
just people that make over $100,000, and I want to deal with that.
    After the election in December, the Government increased its 
estimates of our deficit by about $50 billion a year over the next 4 
years. Now, if I had stayed with exactly the same plan that I 
recommended in the campaign, the first thing my critics who now attack 
me for raising taxes would say is, ``Oh, he's going to increase the 
deficit. Oh, he's being too optimistic.''
    I decided that when they revise deficit figures up one more time $50 
billion a year, that somebody had to take this thing and shake it up and 
say, ``We are definitely going to have a plan of spending cuts, new 
investments, and revenue increases that will bring this debt down.'' And 
I plead guilty to doing that.
    And I think almost any of you, if you had been in my circumstance, 
would have done the same thing if you were thinking about what was in 
the long-term best interest of the country. And you can see it by how 
much interest rates have come down just since the election. People who 
control these things desperately want to believe that our Government can 
exercise some discipline again, that we can have some focus, that we can 
show some restraint as well as some activity.
    Now, the taxes that I propose to raise--let me just basically go 
through them--are essentially three. There are more minor ones, but the 
big-ticket items are as follows:
    Number one, an increase in the income tax on the top 1.2 percent of 
income earners; an increase in the corporate income tax on corporations 
that have income in excess of $10 million a year.
    Number two, an increase in the income subject to taxation of people 
who draw Social Security but also have other income in excess of $32,000 
a year if they're couples, or indi- 

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viduals in excess of $25,000 a year. In other words, anyone who is not 
paying tax on Social Security now will not pay tax under my plan. That's 
80 percent of the Social Security recipients. The upper 20 percent will 
be asked to pay taxes on a higher percentage of their income, but we 
will still leave enough of that income free so that almost all of them 
will get back what they put into the Social Security system plus 
interest without taxation. The rest will be subject to the income tax. I 
think that is fair.
    Since 1985--I'm very proud of this--since 1985--as an American, you 
should be proud of it--the people of this country over 65 have had a 
lower poverty rate than people under 65. That's the good news. The bad 
news is that one in five American kids is living in poverty. So it seems 
to me that this is a fair thing to do under these circumstances.
    And then the third thing I recommended was an energy tax that will 
raise $20 billion a year and will help us to clean up the environment, 
promote conservation, and make us more independent of foreign oil. It is 
a broad-based tax to try to be fair to every part of the country.
    And I want to deal with this because I'm in New York now. There were 
some who said tax carbon, that's a fancy way of saying tax coal, which 
is very tough on West Virginia, Virginia, Ohio, Pennsylvania, coal 
States that have been very hard hit. So I said, no. There were others 
who said put a huge tax on gasoline, which is good for city dwellers but 
tough on people that live in the country and that live in those big 
western States where they have to drive very long distances and a 
carpool is not an option. So we said, no. And some said tax the value of 
energy, which sounds great, except whenever one source of energy goes up 
the taxes go up. So you reinforce price increases. So we decided the 
most environmentally responsible and regionally fair way to do it was to 
tax the heat content of energy, oil, gas, coal in a very modest way, and 
then to have an offset over the next 4 years where any disproportionate 
impact in the Northeast for home heating oil, and real incentives for 
conversion.
    Now finally, let me say this program exacts no new taxes for the 40-
plus percent of our income tax payers whose taxable income is under 
$30,000. About $20 a year for people at $30,000 goes up to something 
between $10 and $15 a month, depending on what your purchasing habits 
are for people at $40,000. Seventy percent of it comes from people whose 
incomes exceed $100,000.
    There are also some other things here I want you to know about. This 
program has some tax incentives, which is a fancy way for saying tax 
cuts for people who invest their money: for the next 2 years, an 
investment tax credit for all businesses in America large and small who 
increase their rate of investment; then after that, some tax changes 
asked for by the manufacturing community for bigger businesses that will 
always encourage investment; and, for the first time, I think, ever, a 
small business investment tax credit that is a permanent 7-percent 
investment tax credit for the 90-plus percent of our businesses that 
operate on $5 million or less in revenues but create most of our new 
jobs.
    This is a very significant thing that will encourage the private 
sector to invest in job-generating activities and very important, 
because in every year of the 1980's, big business lost employment and 
small business overcame it with more new jobs; but for the last 2\1/2\ 
years small business has not been creating enough jobs to offset the 
losses in big business. So we've got to reverse that.
    There's one final point I want to make as strongly as I can about 
this. Our plan will bring the deficit down dramatically over the next 4 
years. In the fourth year, it will be $140 billion a year lower than it 
would otherwise be. But unless we also tackle the health care crisis 
this year, the deficits will start going up after that no matter what we 
do, because the cost of health care is going to overtake every other 
thing in the budget and swallow it whole, and not for new health care. 
We will be paying more for the same health care. So there is no more 
urgent item on our national agenda than getting all the people involved 
in health care together and trying to hammer it out.
    I asked the First Lady, as all of you know, to head a task force on 
this. She is increasingly less grateful to me for having asked her to do 
that. [Laughter] But she's very good at bringing people together on a 
complex matter and bringing them to conclusions and

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coming to a clear plan. And we have got to do that, or we can't turn 
this country's economic health around.
    You talk to any major manufacturer and ask them what their biggest 
problem is. Nine out of ten of them will tell you, ``my health care 
costs.'' You talk to the steel people and the auto people and ask them, 
and a lot of them will tell you, ``just paying the health care costs of 
our retirees.'' So we have to face that.
    Now, that's all of the bad news. Now, what's the good news? What are 
you going to get out of this? A half a million new jobs in the next year 
and a half in a job stimulus program, and a long-term program to raise 
our levels of investment and our quality of education and training, to 
be fairer to the lower income working people and create an environment 
that moves people from welfare to work, to have policies that really 
support families who are working and trying to raise children, and to 
have an investment program that breaks the barriers of new technologies 
and actually tries to create more new jobs than we are losing every 
year.
    No one can promise you, nobody, to stop anything bad from happening 
in this world. The world you're living in is so dynamic; there's going 
to be so many changes; no one can repeal the law of change. But change 
has been too many enemies for too many people. I seek to make change the 
friend of the American people. That's what this program does. It will 
make change our friend instead of our enemy. But we first have the 
courage. We must have the courage to seize control of our own destiny.
    So I want to say to you, just as I said to Congress the other night, 
I need your help. I can't do this alone. If you think there's something 
wrong with my program, fine. Come up with an alternative. But I promise 
you, the cost of the status quo is the most expensive course of all. 
Staying with what we've been doing is plainly unacceptable. Every 
American ought to be able to see that. The price is entirely too high. 
The price of my program is far lower with far higher results.
    I ask people of good will all across this country, just as I asked 
the Congress: If you can think of more things we can cut in spending 
that are really good for this economy and the American people over the 
long run, have at it. Let's go. I'm just getting started. I will not, I 
will not support any tax increase without the spending cuts. I'm not for 
that. I think we would also be very foolish to say that we don't need to 
invest more in our children and in our technology and in our economic 
future in putting the American people back to work. After all, the 
bottom line of all this is the chance that Americans need to have a 
dignified life.
    We are here in this beautiful school building today. It still looks 
fabulous after all these years because President Roosevelt knew it was 
wrong to let all those energetic, hard-working, family-oriented, God-
fearing craftsmen and people who could work, sit idle month after month, 
year after year, when they had a contribution to make that would be good 
for themselves and good for the country.
    I ask you now to give me your support so that we can mobilize the 
energies of a whole generation of Americans. It will be good for you, 
but more important, it will be good for the country.
    Thank you very much.

Note: The President spoke at 3:46 p.m. in the auditorium of Haviland 
Middle School. In his remarks, he referred to Lt. Governor Stan Lundine 
and Attorney General Robert Abrams of New York. These remarks were not 
received in time for publication in the appropriate issue.