[Weekly Compilation of Presidential Documents Volume 29, Number 30 (Monday, August 2, 1993)]
[Pages 1495-1501]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
Interview With the Nevada Media

 July 29, 1993

    The President. It's nice to hear your voice. I want to thank all of 
you for participating in this radio press conference or town hall 
meeting or whatever we want to call it. I'm glad to have the chance to 
talk with you.
    Let me just say very briefly by way of summary, the Senate and the 
House are meeting today, trying to agree on a final version of the 
economic program which could then be presented for a vote next week. 
Obviously, I'm trying to secure passage of the program. I believe it is 
very important. I want to emphasize, if I might, some of the major 
features.
    First, this is the largest program for deficit reduction in the 
history of the country, $500 billion. Of every $10 of deficit reduction, 
half of it is in spending cuts, very significant ones in nondefense as 
well as in defense, including 150,000-person reduction in the Federal

[[Page 1496]]

work force and big cuts across the board in many other programs.
    Second thing I want to say is that of the $5 in new revenues, about 
80 percent of them come from the top 5 percent of the American work 
force. There are no income tax increases on couples with incomes below 
$180,000 a year.
    Third thing I want to say is that in addition to reducing the 
deficit and imposing a fair tax burden, this program does an awful lot 
to promote job growth. It holds families with incomes of under $30,000 a 
year harmless. It doubles the expensing provision of small business and 
makes over 90 percent of the small businesses in America eligible for a 
tax reduction if they invest more in their businesses. It has a very 
innovative capital gains tax for investment in small new companies that 
are capitalized at $50 million a year or less, which should benefit a 
fast-growing State like Nevada. It has any number of other very 
important things that could help the technology jobs in your State, 
including an extension of the research and development tax credit, as 
well as real initiatives to revive homebuilding and real estate which is 
why the National Home Builders and the National Realtors, two groups not 
normally associated with Democratic Party initiatives, have endorsed 
this program.
    Yesterday we had almost 70 business executives from all over the 
country, including 4 big energy company executives, about half of them 
Republican and of course the other half Democratic, endorsing the 
program and saying it was important because we had a 20-year low in 
interest rates, and we had to restore certainty to the economy, keep 
these interest rates down because we're bringing the deficit down, and 
get on with other business. We've got a health care issue to deal with, 
a crime bill to deal with, welfare reform to deal with, all these things 
that have to be done but can't be done until we first pass the economic 
plan.
    With that, I'll be glad to take as many questions as we can.

Economic Program

    Q. Thank you, Mr. President, for allowing us this opportunity. Why 
have you had such a tough time selling your economic plan to not only 
Congress but to the American public?
    The President. I think until the last couple of weeks, the 
opposition did a better job than we did because they had a simpler job 
of selling it. We had some overtures to the Republicans, and especially 
in the Senate, before I even unveiled this program about whether there 
was a possibility of a real bipartisan effort to deal with this deficit. 
And we were basically told that if we were going to have any taxes on 
upper income people, they weren't interested. And they basically wanted 
to take it all out of Medicare and other things that we think there's a 
limit to how much you can cut. And we've cut Medicare as much or more 
than they have in the past but not as much as they wanted.
    So when you've got a program of spending cuts, tax increases that 
are overwhelmingly on the wealthy with an enormous number of economic 
incentives to grow, you'd think it would be quite popular. In fact, it 
is when people know the details of it. But what happened is, you had 
everybody from the Republican Senators to a lot of the House Members to 
Rush Limbaugh just trying to convince the American people that there 
were no spending cuts, no deficit reduction, and no taxes on anybody but 
the middle class. None of that was true. But it's a lot easier to bad-
mouth something like that and just scream ``taxes'' than it is to deal 
with the specifics.
    Let me just give you one example. Just in the last couple of weeks, 
it's been very impressive to me that the Wall Street Journal, a 
newspaper that's not editorially on my side often, that their news 
columns have repeatedly shown how most small businesses benefit from 
this program, but most of them didn't know. Their communications job, 
those that are against us, was simpler than ours, and we've only begun 
to do what we should in the last couple of weeks.
    But the more people know about this, the more likely they are to 
support it. The details of the plan are friendly to support; it's all 
this rhetoric that's hurt us so bad.

Taxes

    Q. Mr. President, I am here, and on behalf of our audience in 
northern Nevada, I would

[[Page 1497]]

like to thank you for this opportunity. We've had quite a lot of 
interest at our station today particularly in the subject of the cost of 
your economic program to our people here in northern Nevada. Mr. 
President, the deficit is something that most people cannot reach out 
and touch or feel, and yet taxes, whether we're talking income taxes, a 
gas tax, a value-added tax, those are very real to our people here in 
northern Nevada. Is there too much emphasis in your program on reducing 
the deficit through taxes and not enough on cutting the burden to the 
American people?
    The President. Well, let's talk about that. I think from the day I 
made it clear that we were going to bring down the deficit and then the 
Chairman of the Federal Reserve Board, a Republican, Alan Greenspan, 
came out and supported it, long-term interest rates began to drop. When 
the House passed my bill, they dropped some more. When the Senate passed 
my bill, they dropped some more.
    So here's why average people should be for bringing the deficit 
down. Number one, that's the way to keep long-term interest rates down. 
That means you can refinance your home or your business loan or take out 
a car loan, a consumer loan, or a college loan at lower interest rates. 
Millions and millions of Americans have refinanced their homes just in 
the last 5 or 6 months with these lower interest rates that are a direct 
result of our serious attempt to bring the deficit down. And if we pass 
the program, the interest rates will stay down until the economy really, 
really starts to boom again. That's good news.
    Here's another reason ordinary people should be for bringing the 
deficit down. We are spending more and more of taxpayers' money just to 
pay interest on the debt. In 1980 our debt was $1 trillion. By 1992 our 
debt was $4 trillion. Today every Nevadan puts 15 cents of every tax 
dollar to the Federal Government just to pay interest on the debt. That 
means middle class people are paying interest payments to upper income 
bond holders who hold that money, instead of using the money to educate 
their children or to build roads or otherwise develop the economy of 
Nevada.
    The third thing I would say is that this deficit has clearly made 
our economy weaker. It is one reason we cannot grow jobs and increase 
incomes. Now, Nevada has been the fastest growing State in the country 
for new jobs for the last 6 or 7 years. But even that cannot go on 
forever.
    Finally, let me say, let's talk about what this burden really is. 
Keep in mind that half of this deficit reduction is coming from spending 
cuts. Of the taxes which will be paid, basically, for a family of four 
with an income of $50,000 or $60,000 or what we're talking about today, 
the costs will be no more--and this is the outside--than $50 a year, or 
less than a dollar a week. For a family with income of under $30,000, 
they'll be held harmless. And the income tax increases only trigger on 
people whose taxes were lowered in the 1980's while middle class taxes 
went up, families in the upper 6 percent of the income earners. So I 
think it is a fair and balanced program.
    Q. Thank you, Mr. President.
    Q. Good afternoon, thank you.
    The President. Thanks.

Senator Richard Bryan

    Q. Are you speaking to residents of the Silver State today mainly at 
an attempt to change Senator Richard Bryan's opposition to your deficit 
reduction plan?
    The President. Yes, but not only that, also to point out why Senator 
Reid and Congressman Bilbray voted for it. They've all been good friends 
of mine. And Senator Bryan has some very legitimate concerns which I've 
tried to address, and I think when this conference report comes out, 
that is, the final form comes out, the bill will be more to his liking.
    One of the things that Senator Bryan, himself, thought the Btu tax 
was a little better than the gas tax. He also felt very strongly that we 
ought to have more economic growth incentives in this bill than the 
Senate originally provided. And we're putting some of those growth 
incentives that I proposed in the beginning back in there: the new 
business capital gains tax, the incentives to rebuild the homebuilding 
industry in America, the incentives for industry to invest in new plant 
and equipment, doubling the expensing provision for small business, more 
incentives for research and development, the things that

[[Page 1498]]

will cause business and individuals to invest to grow jobs. Dick Bryan 
said he thought that too much of that had been taken out when the Senate 
bill passed, and I agree with him. And I hope when we get this final 
bill out there he'll see it as a projobs bill that will be good for 
Nevada, and then he'll feel that he can vote for it.

Job Creation

    Q. We seemed to be losing jobs nationally faster than they can be 
generated: last week Procter & Gamble, this week IBM, not to mention the 
jobs that have been lost through the cutback in the Sears catalog 
stores. How do you propose to reverse that process, and is there 
something specific that the private sector can do to help?
    The President. Yes, there are some specific things that the private 
sector can do, and let me make two comments, if I might, to the 
statement you made by way of introduction. Number one, every rich 
country in the world is now having trouble creating jobs, even when 
they're having economic growth. We've seen that in Germany. We've seen 
it in France. We've seen it in Japan. That's cold comfort for America, 
but our unemployment rate is actually lower than all those countries 
now, as tough as it is here.
    Number two, in our country and in all other advanced countries, big, 
big companies like IBM, Procter & Gamble, Sears are going through a 
process of restructuring where they're eliminating middle layers of 
management, getting rid of unprofitable businesses, and cutting down so 
they can be more flexible and so they can compete. That is very tough, 
and it's tough for our economy.
    So how are we going to generate more jobs? These are the things that 
have to be done. First of all, what can the private sector do? They can 
invest more, create more jobs here, and sell more products and services 
at home and abroad.
    What is the Government going to do to help them do that? The first 
thing I want to do is get the deficit down so we can keep interest rates 
down. The second thing I want to do is to change the Tax Code so that we 
favor investment for jobs, that we give people ways to lower their tax 
burden by investing to create jobs. The third thing I'm trying my heart 
out to do is to open new markets for our American products and services 
around the world. If we do those three things and we provide a better 
system for educating and training the work force, control health care 
costs, which is a big problem for a lot of these big companies--a lot of 
them are going into real trouble because they can't control health care 
costs--and then have a better system for developing our people's ability 
to work, reducing the welfare rolls, increasing the work rolls, training 
people better, those are the kinds of things that will change the future 
of this country. And that's what my economic plan is designed to do. The 
deficit reduction program and the jobs incentives, that's only the first 
step. We've still got to do these other things as well.

Economic Program

    Q. Of all the things in the budget and the deficit reduction 
package, several of the things which seem to hurt Nevada the most--we're 
basically a service economy; we depend on tourists arriving here. We're 
not a manufacturing State; we're not really an agricultural State; we 
don't export a lot of things anywhere. And yet, the proposal for a 
nickel more a gallon on gas--the Btu tax may or may not be dead--all of 
those things would tend to drive down tourism, the very thing that 
Nevada thrives on. What is there in your program, since we're already 
the second fastest growing State job-wise and we have among the highest 
in new construction and what have you in our State--what is there 
specifically in your plan that will actually be of benefit and not of 
cost to the people of Nevada?
    The President. Well, first, let me make a comment about--there will 
not be a Btu tax. If it is an energy tax, it will only be the fuel tax. 
I think it will pass at a low enough level so that it will not burden 
travel any. Keep in mind that gasoline in America is the cheapest of any 
country in the world, and gasoline is now at its lowest price in 30 
years in America when you make adjustments for inflation. So we've got 
very low fuel costs, and we're proposing a very modest gas tax, not a 
big one.
    Secondly, there are a lot of things that are good for Nevada, are 
the incentives to revital- 

[[Page 1499]]

ize the homebuilding and real estate--homebuilding's slow everywhere, 
just about--the incentives for all small businesses to invest more, to 
increase their profitability and their employment, which is a dramatic 
thing. We've qualified over 90 percent of the small businesses in this 
country for a tax break. And then the incentives for new high-tech 
industry and research and development and investment in new companies, 
that's very important, because among other things, we're trying to find 
alternative developments uses for the nuclear test site while we've got 
this moratorium on nuclear testing. You've got a big sort of technology-
based infrastructure up there because of the past nuclear tests, and the 
Governor's economic development task force is working with us now to 
determine whether there are alternative uses and projects and spinoffs. 
And this would help a great deal because it would make this kind of 
investment more attractive to more capital by giving tax incentives to 
attract it.
    So all those things are important. And in the end, I'll say every 
State in the country will have a more attractive, effective economy if 
the deficit stays down and we can keep interest rates down. Low interest 
rates for a sustained period of time will make available more money to 
more business people and lower cost in every State in America, and 
that's very, very important. That's a big issue in every State.
    We can take a few more questions if you like. Let me go back to the 
top.

Federal Lands

    Q. Yes, sir. Mr. President. Do you see there being increases in 
grazing fees for public lands, and also on mining royalties?
    The President. I think the Congress will pass some increase on 
mining royalties with a bipartisan consensus that has some support from 
the West this year. I think they will be pretty modest and the subject 
of a lot of discussion. But it appears to me that they're going to pass 
a bill to do that.
    With regard to the grazing issue, Secretary Babbitt has visited 
Nevada as part of his western swing to talk to people about that. What 
we had hoped to do is to turn that whole issue into an environmental 
one, that is, to give ranchers incentives to continually restore the 
ranchland as a way of avoiding higher fees and also to make sure that 
any fees that were imposed were not economically crippling to the people 
involved.
    As you may know, if you've been reading the press back East, that we 
took a lot of criticism, Secretary Babbitt and I did, from a lot of 
legislators from places other than the West who wanted to mandate by law 
much, much higher grazing fees. And we took the position that the 
Secretary ought to go out West, ought to sit and visit with the ranchers 
and cattlemen and talk to them about what we could do to make sure we're 
being environmentally responsible with this Federal land and how we can 
use the grazing fee structure in a way that would encourage that. So 
that's where that issue is now.

Energy Tax

    Q. A fuel tax increase will not only be felt at the gas pumps, sir, 
but in people's pocketbooks as well, in regard to the price of goods and 
services at the consumer level. Now, the Fed has indicated that interest 
rates will be raised if inflation starts to rise. How do you justify a 
double whammy or a double blow like that? How can that be good for the 
economy, sir?
    The President. Well, the Fed has basically indicated that they're 
going to raise interest rates if this deficit reduction package doesn't 
pass. Alan Greenspan has repeatedly told the Congress that the size of 
the Federal deficit and the accumulated Federal debt from the last 12 
years was the biggest threat to the health of the American economy. And 
he was up there just last week saying that if this plan is derailed and 
we don't, in fact, come up with a plan for just about $500 billion of 
deficit reduction, that in his view interest rates are going to go up, 
and that will cripple the economy.
    As I said, everybody we have talked to has suggested that this level 
of fuel tax increase will be very modest and have virtually no impact on 
the economies of the various States in the country. Virtually all States 
in America have raised fuel taxes more than this for their road programs 
over the last 10 years without adverse economic impact.
    Q. Early on in the proposition on the Btu tax, you mentioned that 
one of the reasons

[[Page 1500]]

for such a tax was to provide an incentive for alternate energy sources. 
Now, Nevada has tremendous geothermal energy resources here that are 
being developed on a somewhat small scale. Without that Btu tax and that 
incentive, what kind of an incentive are you going to provide down the 
road for developing alternative energy such as geothermal?
    The President. We're going to have to come up with another approach. 
The reason I liked the Btu tax is that it promoted the development of 
American clean energy: natural gas, geothermal, methane, ethanol, solar 
energy, all kinds of things which would have led to big investments in 
the West particularly to try to develop the technologies. But there was 
so much misinformation and such an effective special interest campaign 
carried out against the Btu tax that it was killed. We just had no way 
to save it.
    I will say this in response to the gas tax question: The fuel tax 
now being considered is a smaller amount per gallon than the Btu tax 
was. But Nevada would have gotten the benefit of having a greater 
economic incentive to develop geothermal and alternative sources of 
energy. I haven't given up on that, but I can't do everything in this 
bill. In order to get on to energy policy, control of health care costs, 
which is a huge economic issue for America, welfare reform, all these 
other issues, we've got to pass the economic plan first.

Federal Employees

    Q. We hear again and again how we all must make sacrifices to bring 
the deficit under control. What about the salaries and benefits that 
Federal employees earn? Will they too be asked to sacrifice?
    The President. Absolutely. First of all, let me repeat again, I 
recommended, number one, that we reduce the Federal work force by now a 
figure that is now 150,000, and I think it will be bigger before we 
finish, that is, I have another report coming out on this next month; 
number two, that we freeze the pay of Federal employees of next year, 
and for the next 5 years we not give them the cost-of-living increases 
that they got all during the eighties, that we give them less than the 
total cost-of-living increase.
    I think you can make a compelling argument that Federal employees 
are making from a percentage point of view, the biggest contribution to 
deficit reduction of any single group in America. And by and large, 
interestingly enough, they've been pretty supportive of this. They've 
recognized it that they have jobs with the Federal Government, that 
we've got to downsize the Government, and that they need to show some 
restraint, if other Americans are going to be asked to pay $50 a year in 
a fuel tax, that they need to show some restraint on their pay. But if 
you look at the automatic cost-of-living increases they've been getting 
for the last 12 years, it will cost them a lot more than $50 a year, 
this program will, before we're done, and they'll pay a much bigger 
share. But I think that's right; the Government should make a bigger 
sacrifice than the taxpayers. I believe that they should, and I believe 
they are.

Line-Item Veto

    Q. Our Senator Harry Reid recently had a small success in getting 
the 100-year-old Tea Tasting Board abolished and the funds for that. He 
proposes sunset legislation that would cut off funding for all programs 
after 10 years without a review, and President Bush and several others 
have proposed the line-item veto, something that the State Governors, 
many State Governors have. Why haven't we heard anything about that? It 
would seem to me and to many that it would be a way to cut a lot of pork 
out of the various national budgets.
    The President. I'm strongly in favor of it, and we have actually 
passed it through one House of the Congress already. A strict line-item 
veto would probably require a constitutional amendment. We had to modify 
it some to meet the requirements of the Federal Constitution, but we've 
passed a strong bill out of the House. It's in the Senate now. I think 
both Senator Reid and Senator Bryan support it, and I very much hope 
that we can pass it. If I had the line-item veto, I assure you that I 
would, myself, be able to deal with things like the Tea Tasting Board 
and some of the other subsidies.
    You know, Senator Bryan has proposed eliminating the mohair subsidy, 
which goes back to the Korean war, which was a pretty

[[Page 1501]]

gutsy thing for him to do, but it passed the Senate last week. So both 
Harry Reid and Dick Bryan have been working on this cost-cutting in the 
Senate. I want the line-item veto very badly. I pushed it as hard as I 
could. We got it through the House, and I think that the Senate will 
pass it, but everything is on hold while they deal with the budget. But 
you're absolutely right, it ought to be passed.
    As far as the sunset review goes, we had such a law in my State, and 
we tried to use it. My own experience would indicate that the Government 
could eliminate an agency a year and never miss it. That's basically 
what we'd try to do. Every time our legislature met every 2 years, we'd 
just try to eliminate a government agency. We did it, oh, three or four 
or five times, and I never heard any complaint from the taxpayers if it 
was something we didn't need anymore.
    So I think there is more specific cutting that we can do, but I 
would remind you that next month the Vice President is going to reveal 
his report on reinventing Government, and we'll have a lot more 
recommendations for further cuts in there.
    Let me take one last question--oh, they say I have to quit. I'm 
sorry. I'm having a good time, and I wish I could talk to you some more, 
but I've got to go to another meeting.
    Let me say how much I appreciate your giving me this opportunity to 
speak directly to the people of Nevada, and how much I hope that they 
will encourage their Senators and Congressman Bilbray to support this 
plan. It's clearly good for America. There is an enormous bipartisan 
support from people who know how badly this huge deficit has hurt our 
country and how much we need some more incentives in the Tax Code for 
people to invest where the new jobs are being created, in small 
businesses.
    We have done our best to ease the impact of this on middle class 
families and on any given State. Like Nevada, I live in a State with a 
high amount of gasoline usage. But the price of gasoline now, plus the 
relatively modest amount of the fuel tax, it seems to me is a small 
price to pay to get this Federal deficit under control and keep these 
interest rates down.
    So I hope you will support the plan. And we need it. And most 
importantly, I hope you will support the fact that your Senators and 
your Congressmen are up here in Washington really trying to honestly cut 
this budget and make some tough decisions, and I think they deserve 
support in that effort.
    Thank you very, very much.

Note: The interview began at 4:43 p.m. The President spoke via satellite 
from the Roosevelt Room at the White House. A tape was not available for 
verification of the content of this interview.