[Weekly Compilation of Presidential Documents Volume 29, Number 30 (Monday, August 2, 1993)]
[Pages 1466-1474]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
Interview With the Georgia Media

 July 27, 1993

    The President. Well, first of all, I want to thank you for coming. 
Welcome. As you

[[Page 1467]]

probably know, we've been doing a whole series of these press 
conferences, both when I'm out and when I'm here and also some of it 
electronically, but as much in person-to-person as possible. And I would 
like to give as much time as possible to answer your questions.
    But I think I should begin with a story that Charles Stenholm told 
this morning. He's the chairman of the Conservative Caucus in the House 
who, by the way, thinks we should make some changes in the program 
during the conference. But he acknowledged today that--he said every 
time someone calls me criticizing this program, they've normally had 
their heads filled full of misinformation by people who are criticizing 
them without telling everything. And every time I talk somebody through 
it, they wind up thinking it's not so bad.
    Last night Leon Panetta went to a Maryland district that's fairly 
representative of the United States with Congressman Cardin and went 
through the whole program. And afterward the Congressman asked the 
people, ``Do you want me to vote for this, or do you want me to delay it 
60 days more or just let it to go to pieces and see what happens?'' And 
three to one, they wanted him to support it.
    Then the Wall Street Journal last week finally began something that 
has not happened up here. This is not your issue but ours in Washington. 
They actually went around and started asking people who said they were 
with small business groups opposed to this plan if they knew what was in 
it, and it turned out they didn't. And over 90 percent of the small 
businesses in America will actually be eligible for a tax reduction 
under this program, because they have no tax increase on the income 
taxes, and we doubled the expensing provisions for small businesses.
    So the program--I just want to emphasize again--is the only program 
presented that provides $500 billion of deficit reduction, an equal 
balance between spending cuts and tax increases. For every $5 in 
spending cuts, there are $5 in tax increases; $4 of those come from 
people with incomes in the upper 5 percent of the income brackets; $1 
comes from the middle class. Working families with incomes of under 
$30,000--and there are a bunch of them in Georgia--are held harmless in 
this program. An average family of four with an income of $50,000, we're 
looking at a ceiling of about $50 a year, which is less than a buck a 
month to get the deficit down and provide some of the economic 
incentives to grow some jobs, which I think is very, very important. So 
I think it's a balanced plan. I think it's a fair plan. And if you look 
at the alternative that was presented in the Senate, it's the only 
serious plan so far that's been up that really has big deficit reduction 
in a fair way.
    Questions? Go ahead.

Georgia Congressional Support

    Q. As you're meeting with us, obviously, some of this is directed at 
reaching our congressional delegation as well. We had conservative 
Democrats in the House, and obviously Senator Nunn in the Senate, who 
had voted against the plan. How are you approaching our delegation? Are 
you meeting with them personally? How are you lobbying them? Are you 
disappointed that you haven't had them with you? And do you think you 
can turn them around?
    The President. First of all, we got a good number of votes from 
Georgia for which I am very grateful. But let me tell you how I'm doing 
it generally. I'm trying to meet with the House Members in the big 
caucuses first: the Conservative Caucus; the Mainstream Forum, which is 
sort of the DLC group; the Black Caucus; the Hispanic Caucus; the 
Women's Caucus. I've met with all of them, except I'm meeting with the 
Mainstream Forum tonight, and then talking to individual Members about 
individual concerns.
    In the Senate we pretty well know the 10 or 15 Senators that could 
go either way and what the issues are for them, and so I'm trying to 
talk to each of them individually about their concerns. I met with four 
Senators over the weekend, and I have talked to a number of others over 
the phone.
    The concerns basically are twofold. They break down into two broad 
categories. Some are just worried about a political reaction. And many 
of them have said to me, ``Look, if our constituents knew what was in 
this, we know they would support it.''

[[Page 1468]]

    This is the only political issue in my lifetime where people have 
known less about it as it's gone on; that is, known less about the issue 
as time has gone on. The night I gave the State of the Union Address 
when there was a great deal of support for this was really the time when 
people had the largest number of facts. And then all the groups that 
ginned up opposition to it--it's like this spokesperson for a small 
business group last week ran a car washing service; turned out she got a 
tax reduction, not a tax increase out of this plan, and she didn't know 
it. And the people that had gotten her to stand up and speak against 
something she didn't know what was in.
    So for those folks we have really got work on just making sure that 
they understand, that we now have an aggressive effort to get the 
evidence out that this is fair, progressive, real deficit reduction and 
real job creation. It's going to keep interest rates down and get jobs 
up. I mean, that's just a--that's reality, and I think that's important.
    To the second argument is that the country wants us to make a 
decision and go on about other things. They don't want us to fool around 
for 60 more days without a budget. They want us to make a decision and 
then deal with health care, the crime bill, the welfare reform bill, all 
the other issues out there facing us.
    Now, there's another group of people who basically didn't like 
either the bill that passed the Senate or the bill that passed the House 
but are more than prepared to take the political heat associated with 
serious deficit reduction if they can get a bill that they agree with. 
Senator Nunn, for example, told me that there were basically two big 
issues for him. And he told me that he might have reluctantly voted for 
the House bill because the House bill addressed one issue, which is that 
we need some more incentives in the Tax Code for people to invest their 
money in job-creating activities. And in the House, you know, we had 
incentives for new and small business capital gains tax. You invest your 
money in a business capitalized at $15 million a year less; if you hold 
it for 5 years, you cut your tax rate in half on the gain.
    By raising personal income tax rates, we created a significant 
incentive to halve capital gains generally by investing in new 
businesses. We had some new incentives for new plant and equipment. We 
had new incentives to revive real estate and homebuilding. We had 
incentives to do more research and development.
    When the Senate passed its bill to move from the Btu tax down to the 
fuel tax at 4.3 percent, one of the ways they did it was just to 
eliminate all that stuff, as well as the empowerment zones to try to get 
free enterprise into the depressed urban and rural areas. They cut that 
way, way back, so--no, they eliminated it in the Senate bill.
    So, I believe that that concern will be addressed in the conference 
report. That is, I think the final bill will, through a combination of 
other spending cuts and maybe some just minor modifications to the 
revenue package, put a lot of those job incentives back in there.
    The other issue that Senator Nunn raises is one with which I am very 
sympathetic but one that I am absolutely convinced we cannot deal with 
right now but that we have to deal with. And that is that there needs to 
be some limits, some discipline on the growth of entitlement spending. 
Let me just give you an example. The budget that was passed last year 
before I became President had an estimated 12 percent a year increase in 
health care costs, Medicare and Medicaid, 12 percent a year. Now, the 
rolls were growing some, but most of it was just inflation, paying more 
for the same health care.
    We cut that back to 9 percent a year and saved $55 billion or so off 
the previous budget, a big shave. But still if you look at this budget 
now, you've got defense going down, many domestic programs going down, 
and an overall freeze on domestic spending. That is, for all the 
increases we have in Head Start and worker training and new technologies 
and defense conversions, we have offsetting decreases in something else. 
And the only thing that's really increasing in this budget are the 
retirement programs, Social Security cost-of-living increases, which are 
at least covered by the Social Security tax, and other cost-of-living 
increases on retirement programs and health care. That's what's going 
up.

[[Page 1469]]

    So Senator Nunn and others believe, and I do, that you have to find 
a way to control health care costs. Otherwise, you're going to give the 
whole budget over to health care. You wind up cutting defense too much, 
and you don't have enough money left to spend where you ought to spend 
it, which is in revitalizing this economy. The problem is that if you 
put a cap on health care costs in this budget without reforming health 
care, which is the next big issue I want Congress to take up, if you did 
that, then all that would happen is you'd impose a hidden tax on every 
American with health insurance. Because what happens is if you just quit 
paying doctors and hospitals at the Federal level, then they just send a 
bill to your employers and to you if you pay part of your health 
insurance.
    And that's why I don't think we can pass this cap now. I think we 
can pass the controls on health care costs by the Government if we 
reform health care. So anyway, that's a long answer. But you're 
interested in the Georgia politicians. I'm dealing with the political 
concerns and the substantive concerns as they come up.

Senator Sam Nunn

    Q. Can I follow up? Why could you not convince Nunn of that, given 
the fact that here's a guy who supported you in the campaign and sold 
you, in effect, to Georgia voters in campaign ads? And it would seem 
like, this being as important to you as it is, that you would be able to 
persuade him to accept the logic of that and wait for health care reform 
down the road.
    The President. I'm not sure he won't. I mean, he told me clearly 
that he found that he thought the Senate was wrong to take out all the 
job incentives, and of course, I did, too. But my argument to him was 
don't let the thing get defeated. Let's send it to Congress and see if 
we can put them back in. But you know, he and Senator Domenici worked 
for years on this program of strength in America. I think he's got a lot 
vested in it. He's got some very strong convictions about it. But all of 
us, including the President, in order to get anything done in a tough 
time, we've got to be willing to compromise some. And I hope we will get 
his support at the end.
    But I just wanted to tell you what I think the roots of it are. I 
think they're--and that I'm very sympathetic with a lot of what he was 
saying. And I think in the end we'll get where he wants to go.
    Let me just mention one other thing I have to tell you. If you get 
the budget out of the way and you start health care reform, which is the 
only way to ever get the deficit down to zero, by the way--I'm not 
satisfied with going down to $200 billion a year and then going back up 
again in 5 years; we've got to do something about health care to move it 
to zero. Then the other big issue that's coming up this fall that I 
think is terribly important is the Vice President's report on 
reinventing the Government. That's been a big issue that Senator Nunn 
and I worked on through the Democratic Leadership Council. He is going 
to offer some very controversial but very important suggestions to cut 
the overhead costs of the Federal Government and make it more efficient, 
make it more user-friendly to the taxpayers, and free up some money 
which can itself be used to reduce the deficit or to invest in our 
future. So all these things have to be seen together.
    And the argument I have to make to Senator Nunn--and I'm trying to 
make to some others, and a lot of the moderate Republicans who basically 
think they ought to support me if they could get out from under the 
partisan deal--is that you cannot solve every problem with the Federal 
budget with this act. We cannot solve all the problems. But if you put 
the budget and economic program with the Gore reinventing Government 
initiatives, with health care reform, you can bring this deficit down to 
zero, and you can really revitalize the economy, and you can do it in a 
way that's fair to all the American people. But you can't do it in one 
bill. And I guess that's the--a lot of the people who are holding out 
are saying, ``Well, we want it to be perfect.'' Well, it can't be 
perfect. It's just got to be a big advance. It's given us the 
dramatically lower interest rates, and it's a good thing.
    Q. Can you tell us a little about your relationship to Senator Nunn? 
I'm belaboring the point a little bit, but we have watched this over the 
last 6 months. How often do

[[Page 1470]]

you talk with him? How is your personal relationship, despite all of the 
thing with gays in the military----
    The President. Probably--I don't know--anyway, often. I talk to him 
often on the phone. And I see him with some frequency, and I hope to see 
him again pretty soon to discuss this. But you know, it's not unusual 
for me every week, a time or two, to pick up the phone and call him on 
something.
    Q. Are you frustrated with him?
    The President. No. No, I mean, I think--you know, I don't agree with 
the decision he made on the budget bill. But I agree with the reasons he 
had for not liking the way it came out. I didn't like the way it came 
out. But I think we should have kicked it into the conference--the 
Senate did the right thing--so we could keep the process going. Because 
the Republicans have not offered any credible alternatives, so there's 
no basis for us to build a bipartisan coalition. I hope we never have 
another bill without a bipartisan coalition, because I'm not comfortable 
with that. But in general I think it's going pretty well. I mean, the 
other issues--you know, he never made any pretense. He never agreed with 
me on the gays in the military issue. He made it clear in the campaign. 
He made it clear during the transition. He made it clear after the 
election. And we wound up--he wound up in a place where I don't think he 
expected to wind up either. I mean, I think we moved this thing quite a 
long way.
    As a practical matter, if you read this policy, it differs from what 
I said in the campaign in only one respect: You still can't openly 
declare your homosexuality without some fear of being severed from the 
service. If you do that, the burden is then on you to demonstrate you 
are not going to violate the Code of Conduct. But I never said one word, 
not a word, about changing anything about the Code of Conduct. And yet 
the military leaders themselves decided to go further than they had ever 
gone in protecting the privacy and association rights of all members of 
the military in ways that Colin Powell summed up as a policy of ``live 
and let live.'' That goes well beyond anything I even talked about in 
the campaign. Senator Nunn endorsed that. The Joint Chiefs endorsed 
that. The House leadership yesterday endorsed that. So I'm very 
encouraged about where we are on it.

Economic Program

    Q. I've asked this question of a couple of your people, and I'd 
really like to hear your response on it as well. You last week released 
the jobs State by State that you think the plan will generate. Now, this 
morning in a session, Roger Altman's staff basically said, ``Gee, we 
probably shouldn't have been so specific. We should have rounded these 
numbers a little bit. We're not going to create 238,416, or whatever, 
for the State of Georgia.''
    The President. It might be more; it might be less. I think everybody 
knows projections are approximations.
    Q. But the choice was to release very specific numbers and now to 
round them. And now the administration is getting some criticism for 
that. Do you not think it may have been a mistake to have tried to put 
such specific numbers together in an attempt to sell this plan?
    The President. Well, it may have been, but let me tell you why we 
did it. What we're trying to do is to avoid--frankly, the main reason we 
did it was to avoid overpromising, because I don't believe that this 
plan alone can restore America's health. I just think it is the 
critical, it is the critical first step. Without it I think you have 
total uncertainty; you have chaos; you have interest rates going back up 
again, and you have a Government that can't get anything done.
    With it you begin the march to progress. I think to get total 
economic health you have to do something about the health care crisis, 
do something about the way the Government does its business, deal with 
the welfare reform issue. And then there has to be a whole set of other 
economic strategies to help people convert from a defense to a domestic 
economy, continue the education and training of the work force, open new 
markets, all those other things.
    So I think what they were trying to do was to say yes, it will do 
something, but we don't want to overpromise. Here's a model we ran 
through, and this is where we got. It may or may not have been a 
mistake, but we were

[[Page 1471]]

trying to give people a sense of what our own research had produced.

Media Coverage

    Q. Could I ask a followup please? One of the reasons for days like 
today is that people acknowledge that you have been misunderstood to 
some extent in terms of this plan. As you well know, there's been a 
fairly constant sense among some people in the administration, and 
sometimes you're one of them, that you've been misunderstood a lot on 
issues like gays in the military and what you first meant and what you 
really meant and on the economic plan, that sort of thing. Why, now that 
you've been here for a while, do you feel there is something systemic 
that's wrong with the way the media covers the White House? Why have you 
been so misunderstood by the people who cover this administration?
    The President. Oh, I don't know. I think that for one thing if you 
throw something really controversial out there, and are new and 
different, it is very difficult for anything but the controversy to get 
constant coverage. And I don't say this so much about you but I mean, 
just in all the stories that compete for time on the national news. For 
example, let's suppose you're--and this is not a criticism more than an 
observation--suppose you are the producer of ABC News or wherever. 
You've got to put the flood on, right? The Israelis bomb the Bekaa 
Valley or attack the--you've got to put that on. So instead of, I mean, 
you can't go back through every night all the essence of the economic 
plan. And if our adversaries decide just to scream, ``taxes,'' it's just 
easier to cover that story and to get it in the timeslots you can cover 
it.
    I think that a big part of it is when there is just a huge volume of 
news and you've got somebody like me who's very much into trying to 
solve problems and get them out of the way, whether it's the test ban 
issue or the POW issue or the Northwest United States forest issue, I 
just try to take all these things and move through them. If you get 
something really controversial like gays in the military, it's not as if 
I had a chance to sit in the home in a fireside chat with the American 
people and walk them through my position and then walk them through why 
we came up with this compromise and why I think it is the principle 
right thing to do.
    And on the economic plan, I think it's just clear, I think--let me 
just give you--Bernie Sanders from Vermont is an independent from 
Vermont, the only independent in the Congress. He called me the other 
day and he said, ``I have done you a terrible disservice.'' I said, 
``What do you mean? You voted for me on everything.'' He said, ``That's 
what I'm telling you.'' He said, ``If the progressives in the Congress 
had burned you in effigy for all these spending cuts, then America would 
know you had made spending cuts.''
    But because the entire Democratic Party and I--on the spending cuts 
it was never newsworthy. They weren't newsworthy. The newsworthy thing 
was the fight over the taxes, so that even when the Republicans--they 
were so smart about it--when the Republicans in the Senate Finance 
Committee offered all kinds of things to water down the tax program, but 
they did not offer one, not one red cent in spending cuts, because they 
didn't want to take any tough decisions. They knew we already made a lot 
of spending cuts, and they just wanted a lot of tax on the taxes.
    So I think, frankly, anytime you do hard things and you try to 
change, you have to expect to be misunderstood. But when you've got more 
than one thing out there at once, you have to really work on talking it 
through, which is why I think I should have been doing this from 
February the 18th until today, not just for the last month or so.
    Q. But is any of this your fault, sir?
    The President. Sure it is. Sure it is. I mean, I'm sure it is. I've 
got to learn--you know it is. But I'll tell you this, I've got an 
administration that's tried to face the problems of this country. 
Everybody up here is trying to do right by America. We get up every day 
and go to work, and we have taken on things that have been ignored for a 
long time. And I do not believe, frankly, that the evaluation of the 
administration by the press or the people has fairly compared us with 
what got done in previous administrations. I mean, I could have been, I 
guess, immensely popular if all I'd done is make speeches for the last 6 
months and not try to do anything.

[[Page 1472]]

Taxes

    Q. Mr. President, this goes to what you've already been saying about 
American taxpayers. There are many people who have the perception that 
you are a taxaholic, that you didn't get the message that many people in 
this country want you to cut spending first, get rid of the bloat in the 
Federal Government and then talk about tax hikes.
    The President. But we are cutting spending. And if all you had was 
spending cuts, you would have a deficit reduction package in the 
neighborhood of $250 billion to $260 billion which no one--which the 
financial markets would not take seriously and interest rates would be 2 
percent higher and all these people refinancing their home and saving a 
ton of money on it wouldn't be saving it.
    In other words, let me give it to you in another way. We are cutting 
spending. We're going to cut more spending. But you'd be amazed how many 
of those same people, when you say, ``Okay, all the growth is in 
Medicare and Medicaid. You want me to cut Medicare?''--they say, ``No, 
don't do that.'' I mean, there are people who believe that all the 
Federal budget goes to welfare and foreign aid--which is something we 
cut, by the way, foreign aid--which is a tiny percentage of the total 
overall budget of the Federal Government.
    We are--this administration, not the two previous ones--that's 
really got the serious attempt going to reduce the Federal bureaucracy 
and to change the way the Federal Government relates to people. That's 
what the Vice President is working on, and we'll have our report out 
next month. But we don't have time to fool around.
    Let me just make one final point about this. David Stockman, who was 
Ronald Reagan's Budget Director when the '81 tax cuts were enacted, gave 
an interview last month in which he said it was folly to believe we 
could balance the budget on spending cuts alone, because in 1981 
President Reagan intended to cut taxes 3 percent of national income. And 
by the time he and the Congress got through with their bidding war, they 
had cut them 6 percent of national income, so much that some companies 
couldn't even handle all their tax cuts. They were selling them to 
others. And he said, ``That has to be reversed.'' That's what I'm trying 
to do.
    And you know, let me just point out for all those people who think 
I'm a taxaholic, for 12 years I was Governor of a State that was always 
in every year in the bottom five of the States in the country in the 
percentage of income going to State and local taxes, in every year. We 
had the toughest balanced budget law in the country, and the only time 
we raised money was when a majority of the people of my State supported 
it, and the money went to schools or roads. We didn't do anything but 
education and jobs with new taxes. In the late eighties, the percentage 
of our income going to taxes in Arkansas was the same as it was in the 
late seventies when I became Governor.
    But when you get up here, you see the problems we've got and you see 
how long they've been ignored. And keep in mind, families with incomes 
under $30,000 are going to be held harmless. Families with incomes 
between $30,000 and $140,000 are going to be asked to pay very modest 
amounts. The average payment for a family of four with a $50,000 income 
is $50 a year. To get this deficit under control, I think it's worth it. 
If the people don't think so, they can tell their Congressman. But the 
idea that there are no spending cuts in this thing is simply not true. 
The spending cuts have not been controversial, so they have not been 
reported, so people don't think they exist. But they do exist.

Legislative Action

    Q. Mr. President, what are the consequences of your not getting this 
budget plan passed as you want it by the August recess?
    The President. Well, the consequences of not passing a budget plan--
it won't be exactly as everybody wants it. That's what a democracy is 
about. People get together and work through. But if they don't pass the 
budget plan by the August recess, what will happen is we'll flail around 
here for a couple of months. You'll see interest rates start to go up 
again. Uncertainty will get worse, and you'll wind up with less deficit 
reduction. Politics will take over, and you'll wind up with less deficit 
reduction. So the thing we

[[Page 1473]]

need to do is to make a decision and get on with it. I mean, we've been 
fooling around with this for long enough.

    I realize that we're keeping a pace that's faster than normal for 
Washington; but for America, they want something done. It's time to do 
something. It means that if you fool around with it, it means we don't 
deal with health care; we don't deal with welfare reform; we don't deal 
with the crime bill; we don't deal with all these other issues that are 
out there crying for attention in America. Eight months is long enough 
to make a decision about a budget and an economic plan. It's just long 
enough.

    Q. Are you worried you're not going to be able to get it?

    The President. Well, I think in the end they will do it because I 
think that all the Republican Members have gone on strike basically. 
We've reached out to them. We've tried to negotiate with them. And they 
have basically said, you know, they don't want to talk unless we're 
willing to do things that aren't real, adopt these amorphous caps and 
slash Medicare even for middle class people, and I'm not willing to do 
that.

    Q. Did you talk to Senator Coverdell?

    The President. Yeah, I've met with the whole Republican caucus. And 
I meet with the Republican leadership, with the Democrats every other 
week.

    Q. What have you learned about your ability to rally your own 
troops? You talked about under Republican resistance, but some of the 
strongest resistance has come within the party.

    The President. Well, I think you should not assume--the Democratic 
Party, first of all, is much more diverse than the Republican Party but, 
secondly, has been much more unified with me than the Republicans were 
with President Bush.

    That's another thing. Look at the historical perspective. Here's a 
little question: There was a Republican House budget plan and my plan 
voted on back to back in the House. There are more Democrats than 
Republicans, right? Now, the Republican plan was no tax increases, the 
Kasich plan. He lost more Republicans for his plan than I lost Democrats 
for mine because it was so unfair to the elderly, the poor, the middle 
class. That was the other plan in the House. Last year, 1992, when the 
Bush budget came up in the House of Representatives, 75 percent of the 
Republicans, not the Democrats, the Republicans, voted against it. Why? 
Because it was a political document. I mean, I have given them a real 
budget, and it's tough.

    Let me just say one thing in closing. The reporter for the 
Philadelphia Inquirer, the political reporter, went out and did 
something that we should have arranged. I wish I had thought about it, 
but he did it about 2 weeks ago. He interviewed all these budget experts 
who work for private companies but whose job it is to know about the 
Federal budget. And he wrote an article which said that the consensus 
was that my claims were accurate and that Senator Dole's attacks were 
not. And the budget expert for Price Waterhouse, not an employee of my 
administration, said that the budget we had presented was the most 
honest budget in more than a decade and the only thing that was wrong 
with it was that it would produce more deficit reduction than I was 
claiming. And we can get you a copy of the article. It was very 
impressive.

    But I think the Democrats, when you think about the withering attack 
that they have been under, constant misinformation, and almost no way to 
get the facts out except through their newsletters--and we have begun to 
run ads for some of them now, those that have been subject to ad 
attacks--I think there's been a remarkable cohesion in a very diverse 
party because there is now a consensus that the time has come to do 
something about the deficit and to try to grow some jobs. And that's 
what we're trying to do. And I think they'll do it before August 5th. 
I'll be very surprised if they really want to go to an August recess, 
have all this unresolved, and come back here and fool around in 
September and October and not deal with the other problems of America. I 
think it will be a mistake, and I don't think they'll do it.

    Thanks.

Note: The interview began at 3:59 p.m. on the South Lawn at the White 
House.

[[Page 1474]]