[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

[[Page 1537]]

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.