[Weekly Compilation of Presidential Documents Volume 29, Number 29 (Monday, July 26, 1993)]
[Pages 1385-1391]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
Remarks in an Interview With Members of the Wisconsin Press

 July 20, 1993

    The President. I'd like to make just a brief opening statement, and 
then I'll be happy to answer your questions. As you know, the designated 
committees from the Senate and the House are about to take up the 
conference process on the economic program I have presented to the 
Congress. I'd like to make a few comments about it and then answer your 
questions.
    I have just returned from a meeting of the world's seven large 
industrial nations in Tokyo. At that meeting, two significant decisions 
were made that could dramatically improve the economy of the United 
States in the years ahead and obviously will be very good for Wisconsin. 
The first decision was an agreement among the seven nations to lead an 
effort to dramatically reduce tariffs on manufactured goods across a 
whole range of services. It is estimated that if we can put this into a 
world trade agreement by the end of the year, it would add hundreds of 
thousands of jobs to the manufacturing economy in the United States over 
the next decade. The second agreement was an historic agreement with 
Japan in which, for the first time, the Japanese agreed to reduce their 
trade surplus with the United States and to be accountable in specific 
ways for reducing that trade surplus in specific areas. Again, that 
means more jobs for Americans.
    Neither of these agreements would have been possible were it not for 
the progress we are making toward enacting the economic plan which 
reduces the deficit by $500 billion over the next 5 years. For 10 years 
American Presidents have gone to these meetings and been criticized 
because the United States would not assume any discipline over its 
budget. This is the first time leaders of other nations have 
complimented instead of criticized the United States. None of it would 
have happened had it not been for the Congress making progress on this 
plan.
    Now, there is a great deal of misinformation in the minds of many 
Americans about what is actually in this plan, thanks largely to the 
rhetorical attacks on the plan by its opponents, most of them in the 
other party.

[[Page 1386]]

I'd just like to point out five critical facts about this plan which, to 
me, make it fair and good for the people of the United States and the 
people of Wisconsin.
    Number one, it has about $500 billion in deficit reduction locked in 
a trust fund so that over the next 5 years all the spending cuts and all 
the new taxes are saved for deficit reduction. It has a mechanism of 
enforcement so that if, because of economic developments, we miss the 
deficit reduction target in any given year, the President must come 
right back to the Congress and give adjusted suggestions for how to meet 
that target, and the Congress has to vote on them. The spending cuts 
have to equal or outweigh the tax increases. So that's the first thing, 
the $500 billion cut.
    Secondly, for the first time in more than a decade, the plan asks 
the wealthiest Americans to pay their fair share. Thanks to the changes 
which have been made in the last couple of weeks in the area of more 
spending cuts, I can now say to you that the plan which comes out will 
have at least 70 percent of the new taxes paid for by people with 
incomes above $200,000. That's about the top 1.2 percent of the American 
people.
    Thirdly, it is fair to working Americans, to the middle class. It 
asks people with incomes of between $30,000 and $180,000 in family 
incomes now to pay an energy tax which amounts to about $50 a year. That 
is about $1 a week for families of four with incomes in the $30,000 to 
$180,000 range. For working families with incomes below $30,000, there 
is no tax increase.
    Fourth, the plan really supports economic growth. And this is very 
important. And this will be a matter of contention between the Senate 
and the House because the House plan has more incentives for economic 
growth. But I think they are very important: a new business capital 
gains tax, an expensing provision for small businesses which will give--
and I want to say this very clearly so everyone understands it--which 
will give over 90 percent of the small businesses in America a tax break 
under this bill, not a tax increase but a tax break if they invest more 
money in their business.
    And finally, the plan is fair to the elderly, to the middle class, 
to the working poor in contrast to the Republican alternatives which 
refuse to tax the wealthy but have less deficit reduction and take more 
out of the hides of people who are most vulnerable.
    So I hope we can get the facts out. I hope it will pass. I think it 
will make a big difference. I know it will make a difference in terms of 
seizing control of our economic destiny and promoting economic growth 
for the United States. And so I wanted to give you in Wisconsin and I'll 
be giving people from other States a chance to ask me questions directly 
about this and other issues of concern to the folks back home.

Midwest Disaster Assistance

    Q. Good afternoon, Mr. President. Thank you for being with us this 
afternoon. As you know, flooding continues to be a problem here in 
Wisconsin and throughout the Midwest. Tens of thousands of people have 
suffered some very real damages. And we're wondering what assurance you 
can give those people that they'll be receiving some real assistance 
from the Federal Government, and what form might that take, sir?
    The President. Well, it will take several forms. First let me say 
that, as you know I think, I have made three trips to the Midwest since 
the flooding began and last Saturday met for about 2\1/2\ hours with the 
Governors of eight of the nine affected States, including Governor 
Thompson.
    We have asked, last night actually, for another substantial increase 
in flood relief aid. The package that we're asking for the Congress to 
adopt is now up to about $2.9 billion. And let me just run through some 
of the kinds of relief available.
    For individuals who have been thrown out of work and who don't have 
enough money to live on--and there are many hundreds of them that are 
flooded out that badly in the Midwest--FEMA takes disaster applications 
and can provide cash funds for living expenses as well as emergency 
unemployment, even for self-employed people and other contractors who 
are not eligible for unemployment normally.
    Secondly, for small businesses, they are available for small 
business disaster loans, and the SBA is working now with FEMA to handle 
a lot of those applications even over

[[Page 1387]]

the phone. Of course, the agriculture programs are, I think, quite well-
known by the farmers, and they understand them. There are some 
operational problems with those agriculture programs based on the way 
they were handled, I think, after Hurricane Andrew that we're trying to 
work out.
    And finally, there will be some direct aid to communities who have 
been hurt, who have lost public facilities and roads and bridges and 
things of that kind. The Federal programs cannot and are not designed to 
absolutely make whole every loss from every individual business or 
community. But they will make a big difference. And I think that the 
general consensus is that our administration has been more aggressive 
and more coordinated and more prompt in dealing with this than has been 
the experience in the past. And we're going to continue to try to do 
that.

Defense Cuts

    Q. Mr. President, I attended a make-believe budget-cutting public 
hearing Monday night in Madison in which some 80 Madison area citizens 
were asked to write their own Federal budget. Some of the trimmers 
favored President Bush's defense cuts because they dealt with some 
specific high-profile weapons: a cap on B-2 bombers, cancellation of the 
Seawolf submarine, and a new air defense system--forego a new air 
system. While your defense budget requests go far beyond the $97 billion 
that Mr. Bush recommended, I wonder if you could spell out some of the 
specific cuts that you propose to make in the defense budget.
    The President. Yes, sir, I can. First of all, we kept the B-2 
bombers at the level recommended last year, so that is something we did. 
The Seawolf program is phased out, and other weapons systems are scaled 
down, including Star Wars, rather dramatically. Over and above that, we 
plan to reduce the aggregate size of the armed services by about 200,000 
more than in the last Bush budget, and we asked the employees of the 
Department of Defense, both military and civilian, to take the same 
reductions in pay that other Federal employees are going to take.
    Those are the three areas which we make up the basic difference 
between the budget we presented and the last budget presented by 
President Bush. Let me say, we do not reduce our presence in Asia at 
this time, and I do not think we should because of the ongoing 
controversy we're having over North Korea and whether they're going to 
withdraw from the regime which commits them never to develop nuclear 
weapons. Until that is resolved, I think we have to maintain a strong 
presence in Asia. But otherwise, we're having substantial cuts in troop 
levels in Europe and some in the United States.

Welfare Reform

    Q. I'd like to ask you about welfare reform. When you were in 
Milwaukee on June 1st, you made a passing favorable reference to the 
notion of eliminating welfare benefits after 2 years, limiting the time 
on welfare to 2 years. It was something you had talked about in the 
campaign last fall. Now Governor Thompson of Wisconsin, a Republican as 
you know, has suggested a pilot program of that sort in Wisconsin, and 
he has asked for waivers from your Department of Health and Human 
Services. I have a twofold question: Are you in favor of the waiver to 
start the Wisconsin pilot program, and as a concept, do you really, 
Federally or in Wisconsin, intend to kick people off welfare after 2 
years, even if they are able-bodied and refuse to work? If you do that, 
what happens to them?
    The President. Let me answer the second question first. Yes, I want 
to end welfare as we know it, and if people are able-bodied, able to 
work and there's a job available for them, and they refuse to work, I 
think they should live with the consequences. I don't think many people 
will refuse to work. The evidence is that most people on welfare, once 
their children are taken care of, are eager to go to work if they have 
the skills necessary to succeed in the work force.
    I want to back up in a minute and tell you the sequence of events 
that we intend to follow here to put us in a position to end welfare as 
we know it. But let me answer your specific question now on the 
Wisconsin program. I talked with Governor Thompson about this briefly, 
not when I saw him on Saturday but the last time I saw him when I was in 
Wisconsin. And I urged him to put the plan together and get it through 
and send

[[Page 1388]]

it to us. And I assured him that we would give it quick consideration. I 
can't commit to support something the details of which I have not 
reviewed, but in general I've been very favorable to pilot projects in 
the welfare reform and in the health care reform area.
    Now, let me back up very briefly and tell you what I think we have 
to do to end welfare as we know it, if I might. Number one, you've got 
to make work pay. That's one of the most important parts of this 
economic program. Under our economic program, we use something called 
the earned-income tax credit which basically is a tax credit which can 
even lead to a refund to people. If they work 40 hours a week and have 
children in the home, we don't believe people should live in poverty. 
This is a dramatic improvement in promoting work over welfare. So if the 
budget passes, you'll have a principle that has to be established: If 
you work 40 hours a week, you have children in the home, you won't be in 
poverty. Number two, we have to toughen child support enforcement 
dramatically. Wisconsin has done a lot of good work on that, and we're 
going to build on that and the work of other States to do that. Number 
three, we have to pass a health reform plan that guarantees that the 
children in this country will have health care. A lot of people don't 
leave welfare for work because they think their kids will lose their 
health care coverage. Number four, we've got to make sure we educate and 
train workers. And then, five, if we're going to call an end to welfare 
after 2 years, we have to know that there will be work available. So if 
there is not a private sector job we're going to have to offer work as 
an alternative to welfare. Those things will be done in order, and as 
they are done, we literally will change the whole focus of this social 
program from welfare to work, from dependence to independence.

NAFTA

    Q. Mr. President, the North American Free Trade Agreement is on the 
minds of every union member. And Milwaukee has lost thousands of good-
paying jobs to Mexico. Recently, the manufacturing policy project, which 
was funded by U.S. businesses, did a study that said Wisconsin can 
expect to lose 178,000 more manufacturing jobs. How do you reconcile 
these facts with your support of NAFTA, and what happens to these 
people?
    The President. Well, first of all, I just don't agree that NAFTA is 
going to cost us a lot of jobs if we do it right. Secondly, if we don't 
conclude the trade agreement, anybody who wants to move their 
manufacturing facility to Mexico to get lower wages can do it now. There 
is absolutely no restriction at this moment on moving a plant to Mexico. 
The purpose of NAFTA is to lower Mexican and United States tariffs--the 
Mexican tariffs are even higher--so we can sell more products to Mexico 
from the United States.
    And let me just make two points, if I might. Point number one, 5 
years ago we had a $500 billion trade deficit with Mexico. Now we have a 
$6 billion trade surplus because we have lowered tariffs. So that even 
though we've lost jobs in America, we've gained more jobs than we've 
lost because our trade has gone from a deficit to a surplus position. 
Secondly, people are going to find out, who want to go to Mexico just 
for low wages, that good transportation, well-trained and skilled 
workers, and high productivity are more important. General Motors just 
the other day announced that they were going to close a plant in Mexico 
and move it back to the United States and put 1,000 Americans to work 
because they weren't having the success they needed in Mexico. When I 
was Governor of Arkansas, we had one or two small plants--I can't 
remember whether it was one or two--close down and do the same thing, 
because they'd had an unsuccessful move.
    Now, there are some problems with this trade agreement which I am 
trying to fix right now through negotiations to get the Mexican 
Government to agree to higher labor standards, tougher environmental 
standards, and to work with us on dealing with these common problems, 
and a consequence if the standards they agree to are not observed. But 
my own view is that America has to have more exports in order to create 
more manufacturing jobs.
    As I said, if we make this deal with the world trading powers to 
lower tariffs all across the world on manufacturing products, it will 
create U.S. manufacturing jobs. So my opinion is if we don't have NAFTA, 
people

[[Page 1389]]

who want to chase low-wage jobs, will still move their jobs to Mexico, 
just like they're doing today. If we do have it, we'll create more jobs 
than we'll lose. And for those who lose their jobs, let me say, I do 
have a plan. I have a plan to improve education and training and 
community economic development, and that's a big part of this program. 
That's part of what I've been criticized for. While I have cut spending 
dramatically in some areas, I recommend spending more in education and 
training, on defense conversion and new technologies so we can deal with 
people who lose their jobs.

Economic Program

    Q. Mr. President, thanks for making yourself available. As to why 
we're here, though, today, how worried are you about losing support in 
the Wisconsin congressional delegation for the deficit reduction package 
you're talking about? Is it Senator Kohl in the Senate, Representative 
Barca? Who are you trying to get us to jawbone, so to speak?
    The President. Well, you don't have to jawbone anybody. I want the 
people of Wisconsin to know directly from me what I think is good about 
this program and why I think it's important. And I think it's support 
that I owe to any Member of Congress that I would ask to vote for this.
    But let me just say, Senator Feingold has made it clear to me that 
he supports our objectives and in general that he is very supportive of 
the program. Senator Kohl has said he is generally supportive of the 
program, but is worried about the fuel tax at any level. And my view is 
that when you tell working families with incomes between $30,000 and 
$180,000 that you're asking them to pay $50 a year, but that 70 percent 
of this program will be paid for by people with incomes above $200,000 
and that over half the money will come from spending cuts, that folks 
will think it's fair and will want to make a contribution to bringing 
this terrible deficit down.

Welfare Reform

    Q. Mr. President, if I could, I'd like to return just a moment to a 
question that was asked earlier and drive a little closer to the answer, 
perhaps.
    I had lunch today with a man from Milwaukee you've just hired to 
come into Washington to work with Donna Shalala. He has a lifetime of 
experience in community service work, and he said that he is concerned 
that in the process of welfare reform what's going to happen is 500,000 
or so people are going to drop off the bottom of the page because they 
are not going to have jobs no matter what happens at the end of 2 years, 
they are just going to be out there. And I suggested to him, well, maybe 
they'll turn to crime or maybe they'll just quietly starve to death. And 
he said, ``Well, I'll tell you they won't quietly starve to death.'' So 
just to reiterate a question asked earlier, what happens to those people 
who don't have jobs? You have said--if there aren't jobs for them, well, 
what happens to them then?
    The President. I think we have to provide community service type 
jobs if there are no private sector jobs available in order to justify 
cutting off the benefits. I don't think you can do it in any other way. 
You can't tell people they have to work if there are no jobs. Once they 
get into the work force, then if they lose their jobs and get them back, 
they'll be like other people, they'll have access to unemployment. But 
for people who have not been in the work force, I think there has to be 
some sort of access to community service jobs if the private sector jobs 
aren't there.

Economic Program

    Q. Mr. President, many of our readers are the people you are 
addressing, the middle class. But a good number of them are what many 
people call upper middle class, and it's a group that is--it's just not 
fashionable right now in Washington, or maybe among this group here, to 
speak in any way in favor of them. But they tell us in letters to the 
editor, in stories to reporters, that they are very concerned about, 
well, taxes.
    Their point is this: They've put in the hours to get where they are 
now. They've worked the 70, 80, sometimes 90 hours a week. You 
understand those hours, sir. Why should they be singled out? And I don't 
know the ceiling you're putting on, your definition of upper middle 
class or wealthy. We're speaking about people who make maybe $90,000 to 
$100,000 combined, have a house, have a family, paying off the 
mortgages, paying off the cars and the bills and the property

[[Page 1390]]

taxes which in this area are going up. Why should they be singled out 
after putting in those many hours for so many years to see it taken away 
so easily?
    The President. First of all, if it's a family with a joint income of 
$100,000, they won't have an income tax increase. Under this plan they 
would pay the fuel tax, which will be about $50 a year for normal fuel 
usage for a family of four. The income taxes trigger in at adjusted 
gross income of roughly $180,000 per couple and about $40,000 less than 
that for individual. Taxable income is somewhat lower, but even taxable 
income for individuals is above $100,000 and about $140,000 per couple. 
But in terms of salary, net income, the way people think of their 
incomes, it's about $180,000 when the taxes trigger in.
    Why should they pay? A lot of those people work hard and got 
themselves to a point of success. We do not seek to punish success, we 
just seek to balance the scales. If you go back through the 1980's you 
will see that what happened in the eighties was that middle class 
incomes--that is, people with incomes from, let's say, $20,000 to 
$90,000 or $70,000--basically were stagnant, but their taxes were raised 
at the national, State, and local level. Upper income people, who got 
most of the gains of the 1980's, actually had their taxes lowered by the 
National Government.
    So I'm not trying to punish anybody, even people with incomes above 
$200,000 who will pay 70 percent of the cost of this program and 
virtually 100 percent of the income taxes. I'm not trying to punish 
them, I'm just trying to balance the scales to get a little back to 
where we were a few years ago when we were generating plenty of jobs and 
growing. No one seriously disputes the fact that a major cause of the 
Federal deficit being as big as it is, is that there was a huge cut in 
income taxes on upper income people, which has to be addressed if we're 
going to get this deficit down. Even then, I think those folks are 
entitled to know that there will be spending cuts at least equal to if 
not greater than the tax increases.
    Let me make one last point. Since we started working to bring the 
deficit down, long-term interest rates have dropped. Alan Greenspan, the 
Republican Chairman of the Federal Reserve Board, has acknowledged that 
the primary reason that long-term interest rates have dropped is the 
administration's serious attempt to cut the deficit. And many of these 
same people have refinanced their homes or their business loans or taken 
advantage of low-interest rates in ways that will give them more gains 
from lower interest rates than they will pay in higher taxes. And that's 
a very important point, I think, that has to be driven home.

Presidential Leadership

    Q. Mr. President, rightly or wrongly, public opinion polls have 
suggested that a number of people see you as not being a strong leader. 
They also see your position on gays in the military as having been a bit 
of a compromise. Would you expect to continue to compromise on important 
issues in the future, or do you see yourself as becoming a stronger 
leader on those key issues?
    The President. Let me tell you, I regret those opinion polls. I 
think they have something to do, frankly, with the way you folks discuss 
these issues. Now, let me just run through this. I am the first 
President in a decade who has had his budget considered seriously by 
Congress. After Ronald Reagan's first budget, every budget that he and 
George Bush presented was laughed off as a political document. Seventy-
five percent of the Republicans in the House of Representatives--the 
Republicans in the House of Representatives--voted against the last Bush 
budget. This one is being taken seriously. I am the first President in a 
decade that was complimented, not criticized, at the recent meeting of 
the world's great industrial countries, because we're doing something 
serious about our economy. I immediately organized the G-7 nations to 
support Boris Yeltsin when he was in the ropes last spring. That's not a 
sign of weakness. And we had a major role in the preservation of 
democracy in Russia. We passed the family leave bill, the motor voter 
bill through Congress quickly. We have three major pieces of political 
reform moving through Congress, already passed one House: campaign 
finance reform, lobby reform, and the line-item veto. I don't think that 
is a sign of weakness.

[[Page 1391]]

    When you live in a democratic society and you're elected President, 
you are not a dictator. The resolution we had on the gays in the 
military, which was worked out by Les Aspin from Wisconsin, was a slight 
compromise from my position in this way: If it were up to me alone, I 
would say that a person could acknowledge being gay openly, clearly, but 
say that he or she was completely conforming to the Military Code of 
Conduct and be able to serve. In this policy, if a person does that, 
that raises the presumption that the person intends to do something that 
the Code of Conduct forbids. But then the service man or woman is given 
the opportunity to demonstrate that he or she will abide by the code. 
That's the rule. The second thing this policy does, which goes well 
beyond anything I discussed in the campaign, is to provide very 
explicit, explicit, protections for privacy and associational rights by 
service members without regard to their sexual orientation, going well 
beyond anything I ever discussed in the election.
    I am the first President who ever took on this issue. Is that a sign 
of weakness? It may be a sign of madness, sir, but it is not a sign of 
weakness. And I think that we need to get our heads on straight about 
what is strong and what is weak. When a President takes on tough issues, 
takes tough stands, tries to get things done in a democracy, you may not 
get 100 percent. Was I wrong to take 85? What would have happened if I 
had just put my campaign pledge into play? What would have happened? You 
know and I know and Les Aspin will tell you, the United States Congress 
would immediately have reversed it. So I would have the great good 
fortune of being able to say I'm ``Simon Pure,'' and the people in the 
military who are serving well and honorably who happen to be homosexual 
would not be one step further ahead than they were when I got elected. 
They're much better off today because we took an honorable compromise.
    That's what democracy is about. Read the United States Constitution. 
It's about honorable compromise. And that is not weakness if you're 
making progress.
    Q. Mr. President, thank you for answering questions from reporters 
from Wisconsin.
    The President. Thank you.

Note: The President spoke at 5:05 p.m. via satellite from Room 459 of 
the Old Executive Office Building.