[Weekly Compilation of Presidential Documents Volume 29, Number 49 (Monday, December 13, 1993)]
[Pages 2523-2526]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
Remarks in a Roundtable Discussion on the California Economy in Canoga 
Park, California

 December 4, 1993

    Thank you very much, Mayor, and thank you, Secretary Brown. I want 
to say a few words and then introduce your State's two Senators, after 
which we will begin the program. First, let me thank all of you who are 
here today, those of you around the table and those of you who are out 
in the audience.
    I wanted to do this in California, this meeting, as a necessary 
followup to what many of us have been doing here in the last year and 
also because I thought it would be useful to do this in light of the 
economic conference we had in Little Rock one year ago this month, that 
some of you here in this room attended. I held that conference in an 
attempt to get the best ideas I could from all kinds of people all over 
the country about how to implement the economic strategy that I had run 
for President to put into effect. I wanted to get our country moving 
again. I wanted to try to restore jobs and incomes, to make us more 
competitive as we move toward the 21st century, and to give people who 
were outside the mainstream of economic life a chance to get in it.

[[Page 2524]]

    As Secretary Brown has said, we have been convinced all along, just 
looking at the numbers, that we couldn't restore the American economy 
without restoring the California economy. Most of this year, the 
unemployment rate here has been roughly 3 percent above the national 
average and has been aggravated into two areas which are causing us the 
most trouble nationwide, that is, the huge numbers of poor people in 
inner cities who can't get jobs at all and the very large number of 
middle class workers who have lost jobs who can't get new jobs or can't 
get jobs as good as the ones that they lost. Those two problems together 
are bearing down on the Nation and are certainly a big problem here.
    We've learned some things in the last year. We've learned that there 
is no silver bullet, that the problems are complex and require a broad-
base approach. We've learned that you can make real progress, especially 
if you're willing to be disciplined and pay the price of time. We've 
learned that national action is not sufficient, that there has to be a 
partnership that is public and private and that is State and local and 
sometimes community based as well as a national effort. And we've 
learned that you can't really leave any stone unturned. I want to refer 
in a minute to a point the mayor made.
    I'd like to briefly summarize what's happened in the last year 
that's affected California in terms of our national policies and some 
California-specific efforts. First of all, the deficit reduction part of 
our economic plan that went into effect on October 1st actually has real 
reductions in spending in 356 separate accounts in the Federal budget. 
That's not lesser increases, that's actual reductions this year over 
what we spent last year.
    We did raise income taxes on something less than 2 percent of the 
American people, but we also lowered taxes for 90 percent of the small 
businesses in the country, passed the venture capital gains tax that the 
venture capitalists heavily concentrated in California have been asking 
for for years, passed some passive-loss rules that the real estate folks 
in California have been pleading for for years, expanded the research 
and development tax credit which is very important to this State.
    Over the last 10\1/2\ months, you see a remarkable thing in a world 
economy that's in recession. In America, interest rates have stayed down 
at historic levels; inflation has been at historically low levels; 
investment is up; personal income is up; more private sector jobs, 
almost 50 percent more private sector jobs now in the first 10\1/2\ 
months of this year than in the previous 4 years; over 5 million 
Americans have refinanced their homes. And we see the beginning of a 
national economic recovery that is quite impressive. So that part of the 
economic strategy--keep inflation down, keep interest rates down, get 
investment up--is working.
    The second part of our strategy was to have more sales, more 
markets, and more products. We sought more sales through removing 
controls on exports that had previously been controlled during the cold 
war, $37 billion in computers and telecommunications equipment alone. 
About one-third of that market comes out of the State of California. So 
in the years ahead that will create tens of thousands of new jobs in 
this State, just by a national economic policy that was clearly in the 
interests of our country. Now, the Secretary has already mentioned the 
national export strategy.
    With regard to markets, we pursued NAFTA; we pursued a new 
relationship with Japan; we have reached out to the other countries in 
Asia. We are doing our best in the remaining 11 days to reach a world 
trade agreement with GATT. I don't know if we're going to get there, but 
it won't be for lack of effort.
    I want to say since we are in southern California, I want to say 
that I think that Mickey Kantor has done an absolutely brilliant job as 
our Trade Ambassador, fighting for the economic interests of this 
country and still trying to promote an expanded system of global trade. 
If we get a good agreement, the manufacturing opportunities there and 
the opportunities for the audiovisual folks that are heavily 
concentrated in both California and New York, our first and second 
largest States with the second and third highest unemployment rates in 
the country, are absolutely astounding. So we're working very, very hard 
on that.
    With regard to more products, we've got an unprecedented partnership 
with the Big Three auto makers to produce a clean car,

[[Page 2525]]

a whole strategy with environmental products in general, and the 
technology reinvestment project, which all of you know about and which 
California has done very well in, indeed, getting about 15 percent of 
the grants but 30 percent of the money that's come out of our effort to 
work in partnership with the private sector to take defense technologies 
to create jobs for the commercial economy at home and abroad.
    The next part of our strategy has been to invest more in people and 
communities. The Mayor mentioned our family preservation strategy. There 
have been many other things. We changed the education formulas in ways 
that have benefited California. We have provided hundreds of millions of 
dollars of more money to help deal with the burden of immigration here 
in health care and in education. We have supported the Community 
Development Bank, the empowerment zones, and increasing infrastructure 
in the Red Line extension here. These things are all very necessary. And 
I want to come back to that in a minute as I sort of leave you with the 
questions that I have.
    The last point I want to make in terms of looking toward the future 
is that we've got to do something about crime and violence if we want 
the whole California economy to recover. Look at the cover of Business 
Week here: ``Rampant crime is costing America $425 billion a year. What 
can be done?'' Plenty. Now, if you assume this number is right, let me 
just give you some feel for what $425 billion a year is. Our annual 
deficit is $255 billion this year. It was about $50 billion less than it 
was supposed to be when we took office; $425 billion is considerably 
more than that. If we had $425 billion to invest in this country, we 
could lower the unemployment rate by 3 percent in California within a 
year, just if we had it to invest in the whole country. This is a very 
serious thing. It says, ``What can be done?'' Plenty. And Business Week 
sort of advocated the administration's and the mayor's crime prevention, 
crime reduction strategy. More police reduces crime; it doesn't just 
help you catch criminals. If you deploy police in community settings, it 
reduces crime. It reduces the incidence of crime.
    Focus on punishment. Do the right things by the juveniles, have boot 
camps, have alternative systems that give people hope that haven't done 
things so serious that you have to lock them up for long periods of 
time. Do more on drug treatment and drug rehabilitation and drug 
testing. Do more on job training and reinvestment and neighborhood 
safety. And do more to get the huge volume of guns out of the hands of 
teenagers and others who should not have them. That's what this says. 
And it's a money issue that is directly affecting the capacity of 
southern California to recover economically--don't ever think it's not 
for a minute--and every other urban area in this country.
    So, having said that, we will have more investments as we can. Let 
me just leave you with the problems from my perspective at the national 
level, if I might. Number one, we've got to be willing to pay the price 
of time. Middle class wages have been stagnant or declining for 20 years 
under the pressure of the global economy. We have huge increases in 
productivity now in the manufacturing and in the service sector. That's 
the good news. But what that means is fewer people can produce more 
things. So we've got to have a lot more customers. We've got to have a 
lot more customers around the world. That's why trade's so important.
    We've had social decline in this country for 30 years. A lot of the 
problems that we're dealing with now are the tail end of a 30-year 
downward spiral that all of us bear some responsibility for not 
addressing earlier and more vigorously. We can turn it around. We 
absolutely can, but it's going to take some time.
    Number two is the changing nature of jobless people. It used to be 
people would lose their jobs; they'd be called back to their old jobs 
after a certain period of unemployment. Now it's much more structural, 
and people are not likely to get their same old job back. We have to 
revolutionize our approach to unemployed people. We need to scrap the 
present unemployment system and convert it into a reemployment system to 
move people through this economy more quickly. It's very, very 
important, especially when you go through the same kind of restructuring 
you're going through here.

[[Page 2526]]

    Number three is, we're still not making, in my judgment, enough 
investment in the areas--and this is not just California--but enough 
investment in the areas that have been disproportionately hurt by either 
defense cuts or by disinvestment in our urban areas.
    And finally, our problem is, at the national level, we have a real 
conflict that the American people have imposed on the Congress and on me 
that can't--we don't need to glaze it over. We know we need to invest 
more money all across the country, pure investments, things that create 
jobs. At the same time, the American people are telling the Congress to 
adopt a balanced budget amendment. And we have already adopted a 5-year 
budget which cuts defense, holds domestic spending flat, and is 
increasing only in retirement and health care costs. So every time I 
spend more money as the President or the Congress appropriates more 
money to invest in defense conversion, we have to cut something else out 
of the domestic budget right now. And all those people who said we 
haven't made any cuts, you just wait until we show up in January and I 
put that new budget on.
    So all I'm saying is we have to keep bringing this deficit down. But 
we need the support of thoughtful people in the business community, in 
the labor community, and community leaders to work through these things 
with us. We also have to keep investing. This mayor and this city need 
the police officers on the street. We need investment, and we need 
partnerships in areas hit by defense conversion and in areas of the 
inner cities where there's been total disinvestment.
    So we can do these things together but not if the political 
pressures force us to overlook the economic realities. And we're going 
to have to have really thoughtful support from the private sector if 
we're going to make the right kind of decisions, and it needs to be as 
nonpartisan or bipartisan as possible. We need to try to make our 
economic policies a matter of our national security. Those are the 
problems from my perspective. I'd like to now call on Senator Feinstein 
and Senator Boxer to talk.
    Thank you.

Note: The President spoke at 10:20 a.m. at the space shuttle main engine 
final assembly area, Rockwell International/Rocketdyne Division. In his 
remarks, he referred to Mayor Dick Riordan of Los Angeles.