[Weekly Compilation of Presidential Documents Volume 29, Number 19 (Monday, May 17, 1993)]
[Pages 849-850]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
Exchange With Reporters Following a Meeting With Small Business Leaders

 May 13, 1993

Inflation

    Q. Mr. President, could you respond to the inflation numbers out 
today?
    The President. Well, you know, I've looked at them over the last 
couple of years, and I think we have to watch it closely. But there is, 
at the present time, no cause for long-term concern. I want to watch it, 
and we will be watching it. But it could be just a blip. There are lots 
of things that could have produced it. We'll just have to see. We'll 
wait for a month or so and see what's going on. Unless there's some 
underlying change in the economy, it's difficult to imagine how we could 
have a significant upsurge in inflation.

Deficit Reduction Trust Fund

    Q. Do you think your deficit reduction trust fund will be able to 
win support on the Hill despite Domenici and Dole and the other Senators 
criticizing it as a gimmick?
    The President. The people that I'm concerned about are the people 
who were prepared to vote for responsible deficit reduction all along, 
the moderate to conservative Democrats who are willing to vote for tax 
increases as long as they know they're going to go to reduce the 
deficit. Bill Bradley called for the deficit reduction trust fund also, 
I noted yesterday. And a whole range of House

[[Page 850]]

Members from Charles Schumer to Charles Stenholm did. And I think it 
will help to--more importantly, I think that in the public mind out 
there in the country, people will see that it's a double guarantee that 
the money will go where we say it will go. So I still think it's a very 
good thing to do.
    I didn't expect it to move any of the votes of people who say that 
they won't vote for a tax increase no matter what. But I must say, the 
most encouraging thing on that is the interview that David Stockman, who 
was President Reagan's Budget Director, did in a magazine called the New 
Politics Quarterly this month where he basically owns up to the fact 
that the biggest problem with the deficit is that they cut 6 percent of 
the national income out of the tax base in 1981 in a bidding war. That 
was twice the size of the tax cut that President Reagan originally 
intended to offer to stimulate the economy. And he says the impact of 
that has never been overcome. So all we're going to try to do is redress 
that with some tough spending cuts. And I think the public mood will be 
far more supportive.
    Q. Will you go along with a 35 percent corporate tax rate?
    The President. If that's what comes out of the Congress. I don't 
know if the Senate will vote for that. We'll have to see. But the 
changes made by the House Ways and Means Committee don't reduce the 
overall contribution from the business sector. They just shift the way 
it comes. And I think that's okay.

Bosnia

    Q. Mr. President, do you hold out any hope that the referendum in 
Bosnia this weekend might result in some sort of face-saving way to get 
out of this mess?
    The President. The issue is not face saving. The issue is life 
saving. Face saving has got nothing to do with it. The issue is whether 
the Bosnian Serbs are ready to have a serious peace process that will 
save lives, recognize that all those people have some right and some way 
to live in the piece of land we now know as Bosnia-Herzegovina, and 
confine the conflict so that it doesn't spill over and cause much more, 
much more serious political consequences for everybody. And that's what 
I hope. You know, I wouldn't say I ever have given up hope, but I'm 
skeptical about it. But it might produce something.

Note: The exchange began at 11:24 a.m. in Room 450 of the Old Executive 
Office Building. A tape was not available for verification of the 
content of this exchange.