    [Weekly Compilation of Presidential Documents Volume 29, Number 31 (Monday, August 9, 1993)]
    [Pages 1531-1537]
    [Online from the Government Publishing Office, www.gpo.gov]

    <R04>
    Interview With Newspaper Editors

     August 2, 1993

    Economic Program

        Q. As you are well aware, Louisiana's Senator, Bennett Johnston, is
    or was at last report among the small, key group of Democrat Senators
    who've indicated reluctance to vote for your deficit reduction package.
    What are you doing or what can you do to get Senator Johnston's vote?
    And do you think you will ultimately get it?
        The President. I don't know the answer to the last question, but
    what I've done is to try to take the strengths of both House and Senate
    versions of the bill and try to put them together. The strength of the
    Senate version was it had fewer overall taxes and was even more
    progressive. The strength of the House version was it had much more
    economic incentives, more economic growth incentives, for research and
    development, for investment in new firms, for small business, the things
    of that kind.
        So the argument that I'm going to be making to all these Senators is
    that this plan now clearly has $500 billion in deficit reduction; it
    will now have more spending cuts than tax increases in it; it will have
    over 75 percent of the new tax burden now borne by people with incomes
    above $200,000; that the middle class tax burden is now down to $33 a
    year; and that the economic growth incentives qualifying, for example,
    90 percent plus of the small businesses in the country for a reduction
    in taxes if they invest more in their companies; and enabling the
    working poor through the earned-income tax credit to lift themselves
    above poverty by working full time, these are very, very important
    things. And the time has come to act.
        Now, let me say just as a generic thing, since this may help to
    shape some of the other questions: The people who are leaning against
    this program or have announced against it--not the Republicans, that's
    almost entirely a political deal; the Republicans have even opposed the
    conservative amendments to our budget to control entitlements and impose
    discipline. But the Democrats basically fall into two categories: There
    are those who think it's the right thing for the country, but they're
    afraid there's been so much misinformation out there about it that
    they'll get beat if they vote for it. And then there are those who think
    that it's a good first step, but it doesn't go far enough.
        The only thing I would say to the latter group is that we do have to
    do something on entitlements, but we can't get there until we do
    something to reform health care spending overall, and that this is a
    major step that will stabilize the financial markets, keep interest
    rates down, and enable us to move on to health care reform, to getting a
    world trade agreement, to welfare reform, to the crime bill, to all
    these things that are out there crying for attention that we can't even
    address if we don't go ahead and get this budget out of the way. And
    also, there will be further budget cuts. The Vice President's report on
    reinventing Government is due next month. It will have many more
    suggested budget cuts. And the House of Representatives has already cut
    another $10 billion off the budget that we can't fully count yet because
    the Senate hasn't acted. But when they do, we'll have even more cuts.

    Deficit Reduction and Taxes

        Q. Mr. President, good afternoon.
        The President. Good afternoon.
        Q. Let me pass on to you a question I'm getting increasingly from
    Constitution readers. How can you assure that your tax increase package
    does not have the same result as Mr. Bush's 1990 tax increase package,
    which is to say no result at all except higher taxes?
        The President. I can do that in two ways. First of all, let's look
    at what happened in 1990. Why did the deficit reduction package in 1990
    not produce the deficit reduction it was intended to? There were
    basically two or three reasons. But one big reason is that they
    overestimated how much the revenues

    [[Page 1532]]

    would bring in; that is, they had some very, very liberal revenue
    estimates, and those revenues did not materialize. So that within 60
    days after the package passed, they revised downward the amount of
    deficit reduction by $130 billion. Now, we have instead taken the most
    conservative revenue estimates we could get.
        The second thing is that I have pledged to the Congress that by
    Executive order, I will put all of this money, the spending cuts and the
    revenue increases, into a trust fund and that every year if we miss the
    deficit reduction target, I will come forward to the Congress and give
    them a plan to meet the target, that is, to have further cuts to meet
    the target, and ask them to vote on it. I might say that we had those
    requirements in the law, and through the parliamentary rules of the
    Senate, the Republicans took it out of the law. One hundred percent of
    the Republicans agree with that budgetary discipline, and they took it
    out because they thought it was good politics for them to take it out
    and weaken the bill further. So I'm going to do it by Executive order.
    So it is different.
        Now, let me say, there was one other thing different from 1990.
    Because this plan has been taken much more seriously by the financial
    markets, it has already had a big impact in bringing down long-term
    interest rates, and that has led millions of people to refinance their
    homes and their business loans. And I'm convinced once we actually pass
    the plan, we'll release a lot of investment into the economy. The other
    thing we do that was not done in 1990 is have investment incentives: the
    75-percent in small business expensing--that will qualify over 90
    percent of the small businesses in the country for a tax cut if they
    invest more in their business; a new business capital gains tax which
    will really help in high technology areas; we've got incentives to
    reinvest in homebuilding and to reinvest in new plant and equipment
    through changes in the alternative minimum tax. So there are a lot of
    pro-growth incentives in this plan that were not there in 1990, and
    those are the principal differences.

    Ross Perot and the Economic Program

        Q. Mr. President, good afternoon. Ross Perot is saying that this
    proposal should be rejected so Members of Congress can go back home,
    visit with their constituents, get a better feel for the spending cuts
    that would be accepted, come back in September and cut some more. Why
    should that not be done?
        The President. Well, because we've already got more spending cuts
    than revenue increases, number one; because we're going to keep cutting
    spending, as I have said. But no one who looks at this budget deficit
    believes it can seriously be brought under control unless there are some
    revenue increases. And you know, I think it's pretty funny--I mean, I've
    got a 4.3 cent gas tax in my plan. Ross Perot proposed a dime a year for
    5 years or a 50 cent gas tax increase in his plan, something he was
    running from yesterday on television. I have more verifiable spending
    cuts than he proposed in his plan. We have done what we need to do here
    to get a budget out.
        Here is the problem: Nothing precludes us from cutting more
    spending. We're going to cut more spending. But until we pass this
    budget, we are paralyzed from going on to the next big problem with the
    deficit, which is health care costs and entitlements there. And that's
    got to be dealt with in the context of health care reform. We can't get
    to health care reform; we can't consider the next big round of spending
    cuts through reinventing Government; we can't do the crime bill, which
    is very, very important; we can't do welfare reform; we can't do
    anything until we pass a budget. And we've debated this from February to
    August. These Members have been going home every weekend. There will be
    more spending cuts. There will be more spending cuts in every year I'm
    here. But the time has come to pass this budget and get on with it. The
    tax burden is fair. Spending cuts now will exceed the tax increases. And
    we're going to put it all against the deficit. And we've just got to do
    this so we can go on and do the rest of it. To keep wallowing around in
    it won't serve anybody very well.
        Q. What do you do about Mr. Perot?
        The President. Well, nothing. He doesn't have a vote in Congress. I
    think what was done yesterday was wonderful. The press kept saying,
    ``Well, what would you do?

    [[Page 1533]]

    Here's your plan; how can you criticize the President? Yours was off by
    $400 billion. You're going to raise the gas tax by 50 cents.'' And so I
    don't have to do anything. I think, you know, it was nice to see him
    answer some questions for a change. There's nothing for me to do. I've
    got a plan, and it'll work, and I want to pass it. And it's good for the
    country.
        Let me just say this: We had 67 business executives here from big
    and small companies last week, 4 energy company executives--half of them
    were Republicans, one of them was President Bush's cochairman--
    supporting this plan. And every one of them said we've got to do it
    because we've got to bring the deficit down, we've got to keep interest
    rates down, we've got to stabilize the economy, we need some incentives
    to grow--every one of them. I mean, there is very broad support for this
    program among people who really understand it.
        When I went to Tokyo to meet with the leaders of other industrial
    nations at the G-7 summit, for 10 years the statement coming out of that
    meeting had criticized the United States for its budget deficit. For the
    first time in 10 years, they complimented the United States. And they
    agree with me that we ought to go and try to get the 111 countries that
    are in the General Agreement on Tariffs and Trade to lower tariffs on a
    whole range of issues, eliminate them on a lot of other products. And
    everybody concedes, who's studied this, that this could add hundreds of
    thousands of jobs to the American manufacturing sector this year. Why?
    Because we're doing something about our deficit.
        We have got to move. We don't need to delay this another month or 2
    months or 3 months. That's what they did in 1990, by the way. One of
    your questions was what didn't work in 1990. In 1990 they said, well, we
    just can't make up our mind, so we'll delay. So instead of adopting it
    in August, they adopted it at the end of October. That's 90 precious
    days almost from the first week in August to the end of October, 90 days
    we could be dealing with health care; we could be passing the Vice
    President's recommendations on reinventing Government, which would be
    even more spending cuts; we could be passing a crime bill to help make
    our streets safer; that we could be dealing with welfare reform; all
    these things to strengthen the economy. None of this can be done unless
    we get this out of the way.

    Spending Cuts

        Q. Sir, there's been a good bit of discussion about the timing of
    the spending cuts, particularly saying that they mostly come in the
    later years. Could you please comment on the timing of the spending
    cuts?
        The President. Well, they weren't timed to do that. The fact is that
    we have more control--when I took over this budget--these budgets are
    done on a 5-year cycle. If you're going to make deep cuts, it's easier
    to plan for them if you have a little time to plan for them. And also
    under the previous budget that we inherited, the budgets were already
    tighter in the early years, and they were much looser, I thought, in the
    later years.
        But I assure you, we're not waiting for that. I've already given
    instructions to my Cabinet to prepare more budget cuts for the coming
    year. We have reduced the deficit in this year since I've been in
    office, mostly because of lower interest rates, by about $25 billion
    over and above where it was projected to be. So there are budget cuts in
    the early years, but it's like planning anything else. If you're going
    to take big whacks out of a large organization, the longer time goes on,
    the more you have to plan, the bigger the cuts you can make.
        Now, let me say one other thing. Other people talk about ``cut first
    and tax later;'' most of their cuts are in the later years, too. They
    just want to pass them first and then avoid the tough decisions on the
    taxes. But if you look at the cuts that are proposed by others, if you
    look at Senator Boren's cuts on entitlements, almost all of them come in
    the later years, the meaningful ones. That's where they come, except the
    proposals that would have raised the costs of health care to middle
    class Medicare recipients or upper class ones. I'm not against, for
    example, raising the premiums on Part B. That's what he called a
    spending cut. But if you're going to do it, it ought to be done in the
    context of overall health care reform and not just trying

    [[Page 1534]]

    to get more money from those folks. I think we need to reform the health
    care system.
        The people who talk about spending cuts first are basically saying
    this. If you ask the people who say they're opposed to this but they
    understand the budget, they will tell you the following things: We are
    cutting defense sharply and about all we can. I'm concerned that we
    should not do more. We've cut it quite deeply. There is an overall
    freeze on domestic spending. For example, that means every dollar we
    increase Head Start, every dollar we increase education and training for
    workers that have been displaced by defense plants closing down, every
    dollar we put into new technologies for defense conversion--those are
    the three areas where we basically have increased--we have to cut in
    veterans affairs, in agriculture, in all these other areas. Already we
    have a budget that will reduce the Federal work force by over 100,000
    people in the next 5 years, and there will be more cuts coming to that,
    so that's flat.
        The only thing that's increasing in this budget are the so-called
    entitlements, and that's basically Medicare and Medicaid and Social
    Security cost of living. We have restrained Federal pay increases and
    Federal pension increases below where they have been under the previous
    administrations. They are getting some cost of living, but less than
    they ordinarily would, and I called for a freeze in the first year. So
    the real growth is in Medicare and Medicaid, in the health care
    programs. If you put a lid on them now without reforming the health care
    system, you must do one of two things that I think are not good. One is
    to charge middle class elderly people more for their Medicare and much
    more if you're going to make them pay it all. Or the second is to not
    charge them any more, just limit how much the Federal Government pays,
    and force the doctors and hospitals to shift all the costs to the
    private sector, which would raise the health insurance premiums of every
    newspaper on this telephone. That's what's been going on for years.
        I guess I need to say this as clearly as I can: I do not dispute
    those who say if you want to take the deficit from where I take it to
    down to zero, you have to deal with entitlements. And it will require
    more spending cuts, not more tax increases beyond where we are. I agree
    with that. But my point is you don't get to that until you do this
    first. You've got to pass the budget first, then reform the health care
    spending in the country. Otherwise, what's going to happen with health
    care cuts, it's going to be very, very unfair to the elderly on Medicare
    or to people who are paying private insurance. They're going to bear the
    costs.

    Space Station and Super Collider

        Q. Mr. President, down here you're talking about budget cutting in
    Texas; that means two things basically, the SSC and the space station.
    How do you see their future? Are they going to hang in there? And if
    push comes to shove, how would you put them in priority of importance if
    you have to keep one and get rid of one?
        The President. Well, let me just say this. They're both very
    important to me for different reasons. And I think they're both
    important to the country. I think, if you're asking how they're doing
    now, I think the space station is more secure than the super collider,
    because the space station passed a House vote. It was a narrow vote, as
    you probably know, the first time. The second time we got some more
    votes. But the first time we only carried it by a couple of votes when
    two good friends of mine who went down to vote against it stayed to the
    end and changed their vote so we could save it because they knew it was
    important to me and, I think, to the country, as I said.
        So we have redesigned the space station after a serious review by an
    eminent team of national scientists. It is very important to maintain
    our leadership in space technology. It's very important in terms of new
    partnerships with Russia to keep them involved in this kind of
    technology, to reduce the incentive they have to sell weapons and keep
    them taking their nuclear force down. But most important, it's a big
    economic boom to us. If we get out of this, the Europeans will move
    right in, take this over, and have a lot of those high-wage jobs that
    Americans should have. So I think it is critically important.
        The super collider is important, in my judgment, for science and for
    research, not so much for applied technology now. We

    [[Page 1535]]

    don't know for sure what it will produce, but we know that it has the
    potential to produce a great deal, and we know that other major science
    research projects like this have often had unintended benefits.
        It's in more trouble now. And frankly, whether we can save it or not
    depends entirely on whether we can save it in the Senate. And the
    climate's not as good as it was last year when it was saved. I think
    then-Senator Bentsen clearly saved it in the Senate last time. It got
    beat by 70 more votes in the House this time than it did last year. I
    really don't know whether that's the real sentiment of the House or not.
    And then I don't know how much that had to do with the fact that, at the
    moment they were voting on the super collider, your Senators and Mr.
    Perot were out on the steps of the Capitol screaming at them to cut more
    spending, at the very moment the bill came up. I don't know whether that
    had anything to do with it or not, but I know it lost by 70 more votes
    than it did last year.
        And you know, it's pretty tense in the Senate now over a lot of
    these issues. But I am strongly supporting it. I'm going to do what I
    can to pass it, and I think we've got a chance to pass it. The key to
    passing it, frankly, is asking the Senate to look at the national
    interest and look at the fact that we have to make a significant
    investment in nondefense research and development and technology. Now
    that we've cut defense a great deal and we have not offset all the cuts
    in technology with domestic investments in technology, and that's where
    a lot of these high wage jobs of the future come from, we can't permit
    this to become a debate where the people in California took 40 percent
    of the base closing cuts last time and they complained that Texas took
    no cuts and that they're voting for new revenues and the Texas Senators
    want--I mean, if it becomes a deal, you know, a State-by-State deal, I
    think it's gone. The only way we can save it is if people will recognize
    that it is in the national interest to do so. I'm hoping we can do it.
        Q. There's time for one more question.
        The President. I can't believe all these editorial writers don't
    have another question. [Laughter]

    Economic Program

        Q. You spoke about now having more spending cuts than tax increases.
    I wonder if you could give us the figures, the current state of affairs.
        The President. Well, you know, they're still negotiating. It could
    change, but the last time I talked to Senator Mitchell it was about $254
    billion in spending cuts and about $242 billion or $241 in taxes, or
    something like that. They were at about $496 billion. And like I said,
    it could change in the next few days, but--I mean in the next day or so.
    You know, let me close by, if I might--you asked me a question when you
    started, and I didn't really give you a very good answer about how I
    could get Senator Johnston's vote. I think, frankly, he's worried about
    looking like he reversed himself from voting against it the first time,
    and I can understand that.
        But let me say, without identifying anybody, if you look at the
    people who have opposed the program or the people who voted for it with
    reluctance, their basic objections break down into two categories. One
    is a political one, pure and simple: ``I think this is the right thing
    to do for the country, and I hope it passes, but I'm scared I'll get
    beat if I vote for it.'' And we have tried to help in several ways:
    first of all, by recreating an aggressive communications strategy, more
    like what we did in the campaign, to try to combat what we think are
    false claims against this plan and just to get the information out about
    it; and secondly, to ask everybody to imagine what it's going to be
    like, not the day after the vote but after we've had a chance to
    continue our spending cut program through the Vice President's
    reinventing Government initiative and through other cuts that will come
    when we've got a chance to deal with health care and welfare reform and
    the crime bill and these other issues.
        Then there's a whole second category of people who say that this is
    okay, this is a legitimate and honest effort to do better, and it does,
    but it doesn't do enough. Senator Nunn, for example--we've got the
    Atlanta Journal on here--Senator Nunn is sort of in that category, you
    know, said you've got to deal with entitlement costs, too. And my
    argument to that group of people--and that's the argument that Senator
    Boren made yes-

    [[Page 1536]]

    terday--is that you're right, it doesn't do enough. But that's not a
    good reason to vote against this because what it does is very good,
    indeed. And unless you do this, you can't get to the second stage. That
    is, I completely agree we have to control entitlement costs and that
    that begins overwhelmingly with Medicare and Medicaid costs. I just
    don't think it's fair or right to do it unless it's part of an overall
    health care reform plan which brings down the cost of health care to all
    Americans and stops cost-shifting and doesn't impose unfair burdens on
    elderly people on Medicare. And my argument is, we're just beginning
    this process; we're not ending it. But if we don't pass this budget now,
    we'll fool around here for 60 or 90 more days debating the same old
    thing. We'll wind up with a program that may be marginally different
    than the one we've got, but it will in all probability have much less
    deficit reduction if we have to go into some sort of situation where
    we're paralyzed on this.
        So the real issue here--I think the reason that we've had so many
    Republican as well as Democratic business leaders supporting this is
    that they want a decision, they want certainty, they want real deficit
    reduction, and they think this meets all those criteria and also has
    some real incentives to grow the economy, and it will free us to move on
    to these other things. That's what I keep emphasizing to Members of
    Congress who say this is not perfect. I say, look, we've got a 4-year
    contract here to deal with all these problems, and you can't expect this
    one bill to solve all the problems of the country. It won't carry that
    much water. But this is very, very important, but only a first step.

    Health Care Reform

        Q. Mr. President, since you brought up health care reform, what do
    you say to reassure Americans--looming over this budget package with its
    various tax increases is the specter of more increases to pay for health
    care. How can you reassure Americans that they're not getting ready to
    get hit by a one-two punch?
        The President. First of all, I think we tried to be pretty clear
    from the beginning that a cigarette tax was just about the only thing we
    had under consideration to deal with the Government's part of this
    responsibility, which is how to provide health care for the unemployed
    uninsured.
        Now, the other big question that the small business community raised
    is what's going to happen to the employed uninsured, virtually all of
    whom work for small businesses. And I don't, myself, think that it's
    right to raise everybody else's taxes to cover those people because
    everybody else is paying too much already. I do think that if we're
    going to join the ranks of every other advanced country in the world and
    we're going to bring our costs down, we've got to cover everybody. An
    employer should bear some responsibility for their employees. And the
    employee should bear some responsibility, too. But my own view of that
    is that the best way to do that is to limit the ultimate cost to small
    business and phase any new requirements in over a period of years so
    that nobody is adversely affected too much.
        But let me say on that point, it's important to remember that 70
    percent of the small businesses in America already provide some coverage
    to their employees. Most of them pay too much for too little coverage
    because of the way our insurance market is organized. Most of them, in
    other words, are disadvantaged by the present system. For those who
    don't provide any coverage for themselves or their employees, they still
    get health care. But if they can't pay for it, the cost of that health
    care is simply shifted onto everybody else by the providers.
        So my argument there is that we're going to do this with extreme
    sensitivity to the economy. I think that most business groups will like
    this program. I think most provider groups will like the program. And I
    think everybody recognizes that there's something badly wrong when we're
    spending over 14 percent of our income as a country every year on health
    care and no other country in the world except for Canada is even over 9.
    They're just barely over 9. We're competing with the Germans, who are at
    8, and the Japanese, who are 8 percent of their income. And with no
    discernible effect on our life expectancy or anything else--we've got
    some serious problems they don't have.
        Now, we'll never get down to where they are because we have more
    poor people, more

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    violence, and because for good reasons we emphasize more technology and
    breakthroughs. So we'll never get down to where they are, but we have
    got to bring these costs under control or the deficit will never get
    down to zero, and we can't really restore the competitiveness of our
    private sector.

        So I would say that people should look forward to this with
    eagerness. Also, this is not going to be jammed through the Congress
    overnight. We're going to have an honest and open debate on this. I want
    the American community to sit down and really visit about this health
    care thing and talk it through. This is not going to be some sort of a
    blitzkrieg deal. We're going to take some time and really discuss it and
    debate it, just as we have for the last 6 months.

        Thank you very much.

    Note: The interview began at 3:49 p.m. The President spoke via satellite
    from Room 459 of the Old Executive Office Building. Participating in the
    interview were the editorial page editors of the New Orleans Times-
    Picayune, the Atlanta Journal, the Daily Oklahoman, the Dallas Morning
    News, the Houston Chronicle, and the Houston Post.