Weekly Compilation of Presidential Documents Volume 30 Issue 29 (Monday, July 25, 1994)

[Weekly Compilation of Presidential Documents Volume 30, Number 29 (Monday, July 25, 1994)]
[Pages 1511-1522]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
Remarks and a Question-and-Answer Session With the National Governors'
Association in Boston, Massachusetts

July 19, 1994

The President. Thank you. Thank you very much. Thank you very much,
Governor Campbell. Governor Dean, Governor Weld, thank you for hosting
the Governors in your latest expression of bipartisan support, showing
up at the Democratic Governors' party last night. That's broadening your
base here.

[[Page 1512]]

I want to join many others here in saying a word of best wishes to
Governor Edgar as he continues his recovery and to say to all of you who
are leaving the Governors conference this year who served with me, how
much I wish you well and how much I enjoyed serving with you over the
years.
I always look forward to this day every year. I feel that I have in
many ways come home whenever I come back here. There are many ways in
which I miss being a Governor, because Governors are so much less
isolated from real life than Presidents. Neighbors stop you on the
street and talk about their jobs and businesses, about their children
and their parents, and the things that we in Washington call issues take
on a very human face. And I must say I have worked hard to try to find
ways to keep the human face on the issues with which we all deal.
It was as a Governor that I learned and lived the idea that the
purpose of public life is actually to get people together to solve
problems, not to posture for the next election with rhetoric. In my time
in the NGA I was proud to work in a bipartisan fashion on issues of
education and welfare reform, on trade and economic development and,
yes, on bipartisan suggestions we Governors had for reducing the Federal
deficit.
I ran for President because I did not want us to go into the 21st
century without a vision of how we could restore our economy and unite
our people, make Government work for ordinary Americans again because I
thought that our politics was too burdened by partisan rhetoric and too
little concerned with practical progress. In the last year and a half I
have set about to implement the vision that I brought to that campaign,
one that grew directly out of the experiences I had with most of you
around this table. We worked to get our economic house in order, to
reverse the trend of exploding deficits and declining investments in
America.
The economic plan the Congress adopted last year contained $255
billion in spending cuts, tax cuts for 15 billion working families, made
90 percent of the small businesses in American eligible for tax cuts,
increased taxes on the wealthiest 1.5 percent of our people, reduced the
Federal payroll by a quarter million, and will give us--along with this
year's budget which eliminated over 100 Government programs, cuts 200
others, and takes the payroll deduction to 272,000, meaning that in 1999
the Federal Government will be below 2 million for the first time since
John Kennedy was President--these two budgets will give us 3 years of
deficit reduction in a row for the first time since Harry Truman was the
President of the United States.
In the aftermath of that, our economy has produced 3.8 million jobs
in 18 months; the unemployment rate is down 1.7 percent. In 1993 we had
the largest number of new businesses incorporated in America in any year
since the end of World War II. In the first quarter of this year, it was
the first time in 16 years we'd gone for a quarter without a bank
failure in America. So I believe that we are moving in the right
direction.
I want to thank the Governors, in particular, for your continued and
consistent support for expanding trade, for NAFTA which is working
superbly, by the way. Our trade to Mexico is growing dramatically.
Mexico's trade to us is growing as well, but our trade to Mexico is
growing more rapidly than that with any other country. We have already
sold 5 times more automobiles to Mexico this year than last year.
I thank you for your statement of support on GATT. We must muster
through the bipartisan majority we need in Congress to ratify the GATT
this year. It will create a half million high-wage jobs in America
between now and the end of the decade.
I thank you for your support of the Asian-Pacific initiative we
began in Seattle, Washington, last year. And I was with Governor Chiles
yesterday in Florida to meet with the committee on the Summit of the
Americas which we will have with all the democratic governments in this
hemisphere in South America at the end of this year.
These are things which will make a huge difference in our economic
future. There are many of you who have also helped us to invest more in
defense conversion and new technology, saving the space station, trying
to move from a defense to a domestic economy, trying to develop
technologies which clean the environment and produce jobs at the same
time.

[[Page 1513]]

I want to especially thank you also for the work we have been able
to do, probably the most in education and training that's been done in
any single year in the last 30 years. And the Governors, on a bipartisan
basis, have supported that. We have expanded and reformed the Head Start
program, increased immunizations, passed the Goals 2000 bill which
ratifies your national education goals in Federal law with bipartisan
support, passed the school-to-work bill, which will support your efforts
to help young people who leave high school and don't go on to 4-year
colleges but do need 2 years of further education and training. We also
have reformed the student loan laws which will make 20 million young
Americans eligible for lower interest and better repayment schedules
under the student loan program of the United States.
And finally, we have still pending in the Congress this year the
reemployment bill which will change the whole focus of the unemployment
systems in ways that will benefit the economy of every State represented
around these tables because for too long our unemployment system has
been just that. It has paid people while they exhausted their
unemployment on the assumption they would be called back to their old
jobs when as a practical matter few of them, one in five Americans, are
called back to their old jobs these days. They need to begin immediately
retraining for the new jobs of the future. That's what the reemployment
system will do. And I look forward to working with you on that, the last
leg in this revolution in the lifetime learning system of the United
States.
Let me just mention a couple of other issues, if I might, before
moving to health care. The Governors have been concerned, some of us
almost obsessed, with the question of welfare reform for many years now.
Our State was one of the first States selected to be a demonstration
project for a lot of these ideas way back in 1980, in the last year of
the Carter administration.
The work the Governors did together on the Family Support Act of
1988 is still the best example of anything that's been done in the
welfare reform area. Now we are seeking to go beyond that. Many of you
with your State initiatives--we have granted several welfare waivers and
expect to grant some more, and with the debate about to start in the
Congress, I just want to say a couple of words about it. It is important
that we pass a new welfare reform bill that builds on what we did in
1988 and what those of you who have worked hard to do right in your
States are doing. It is important that we dramatically increase the
national efforts to do what you need the National Government to do,
including adopting some national rules on tough enforcement of child
support. Some of you have done remarkable things there, but if we have
some national systems we can do a much better job in collecting billions
and billions of dollars in overdue child support, the absence of which
drives people into welfare.
It is important that we provide maximum leeway for continuing State
experimentation. I have said over and over again to members of both
parties in the Congress, no one understands how to fully solve this
riddle. So, whatever we do in the national welfare reform legislation,
it is imperative that we still leave the States some room to continue to
experiment.
Finally, I hope that all of us will support the notion that there
ought to be some period after which we end welfare as we know it.
Yesterday I was in Florida, and I shook hands with a lot of people who
came to this reception. We were talking about the Summit of the
Americas, after which these two young women who were born in another
country, I think--they spoke English with very pronounced accents--but
they were working at the hotel. They said they were American citizens.
They wanted to know if they could have their picture taken with the
President, and they wanted to tell me something about the welfare
system, these two young women that were working at the hotel. And both
of them said, ``Take all that money and spend it on child care and
training and incentives and whatever, but make all those folks go to
work if they can go to work,'' two people at the hotel, just
spontaneous.
So, I say to you, we need to act on that. Both Houses have had
hearings: there's a great deal of bipartisan support. I think we have a
chance to do it. We have some chance to do it this year, although no one
really

[[Page 1514]]

thinks we can. If we don't, we certainly ought to pass it early next
year.
Let me mention now the crime bill. This crime bill is the most
important anticrime legislation ever considered by the Congress. It has
broad bipartisan support. There are one or two areas of continuing
disagreement, but let me mention what's important about it. It puts
100,000 police on the street over the next 5 years. That's a 20 percent
increase. There's been a 300 percent increase in violent crime in the
last 30 years and a 10 percent increase in the number of policemen in
America. It shouldn't surprise anybody that we have problems dealing
with this. We now know that violent crime has shifted downward along the
age scale and that people between the ages of 12 and 17 are 5 times more
likely to suffer from violent crime than older people. We need community
policing. It is in many ways the most important part of the crime bill.
The crime bill has tougher punishment, including the ``Three strikes
and you're out'' law. It bans assault weapons but protects hunting
weapons in an innovative and I think very important piece of Federal
legislation. It provides more money for prisons, but it also provides
billions for prevention.
I must take some exception to what the Republican leader of the
Senate said earlier here today on this issue. The prevention money is in
there in large measure because the law enforcement officials of the
country told us it ought to be in there. It is in there because the
people who go out and put their lives on the line every day said to us
over and over and over again, ``You've got to give these kids something
to say yes to as well as something to say no to. If they do something
terrible and you have to put them away for a long time, fine. But if you
can prevent that through summer jobs, through job training, through
midnight basketball, through more people in the Boys Clubs, through
these things which work, to give kids who live in neighborhoods that are
burdened by the lack of family structure, community structure, and the
structure of work, do it. Give them something to say yes to again.''
It is a very serious prevention effort. And I think it ought to be
supported along with the tougher punishment. And since the law
enforcement officials--the law enforcement coordinating committee
represents half a million law enforcement officials in this country, I
think that we ought to have that kind of support on a bipartisan basis
for continuing the prevention initiative as well.
Let me just mention one other subject before I go on to health care.
A big part of reinventing Government to me--and you've heard the Vice
President use that slogan. We're coming up on our first anniversary of
our reinventing Government kickoff, and he and I will be trying to give
you a progress report at the end of the summer when we do that. But let
me just say that we've done some things that I think are very important.
We're paying for this crime bill not with a tax increase but with a
savings which will be achieved by reducing the Federal payroll by
272,000 people, taking people out of the Federal bureaucracy and putting
them on the streets of our cities and towns. I think that's reinventing
Government at its best. We'll give the money to you, and you spend it to
keep the American people safer.
We are trying to make agencies work that for too long were political
and ineffective, like the Federal Emergency Management Agency--and I was
just with the Governors of Georgia, Florida, and Alabama in the
aftermath of their terrible floods--and the Small Business
Administration, which I think is commonly recognized as probably at its
most effective state in its history.
We have tried to deal with the fact that you bear a disproportionate
share of the cost of immigration, those of you with high immigrant
populations, and we have increased by one third funding to the States
for dealing with immigration problems in the last year and a half. I
support the modified Glenn-Kempthorne initiative, and I agree with
Senator Dole we ought to pass it, we ought to pass it now, and we ought
to put the issue of unfunded mandates behind us. I think it's a very
important thing to do.
Finally, let me make this statement and ask for your help, I very
strongly support the continued issues of comprehensive waivers in the
areas of health care and welfare reform. We have issued, by my last
count, 21 comprehensive, sweeping waivers, a lot of little ones but 21
very large ones, 15 or 16 in

[[Page 1515]]

the welfare area and 5 or 6 in the health care area, in the last year
and a half, slightly more than half of them since I last met with you. I
received a report before I came here on all the applications that any of
you have pending for comprehensive waivers, and I reviewed them, and I
have taken a personal interest in trying to push them through.
I, like you, am concerned by the recent court decision on this
issue, and I appreciate your response to that. I just want you to know
that we need to work together to figure out what to do about the court
decision so we can go on with waivers. I am determined not to permit
that court decision to become an excuse to slow down the dramatic
increase in experimentation we have at the State level in health care
and welfare reform. And I ask you for your support in that.
Now, of course the most politically difficult and politically
charged issue we are facing today is the issue of health care. It
shouldn't be surprising that for 60 years the American people have seen
their leaders periodically try to provide coverage to all Americans and
to reform the health care system, only to fail. The most encouraging
thing perhaps that has happened today so far is the comment that Senator
Dole made that now is the time to act, and he is willing to work all
through August and September and October to get something done. That is
what we ought to do. We ought to do whatever it takes and work however
long it takes on whatever days to takes to get something done.
I would like to set this again into some context. You gave me the
privilege of coming to speak with you about this last year, and I don't
want to be just going over old ground. But I think it's important, when
we decide what it is we should do or shouldn't do, to talk again about
what the problem is.
First of all, in the United States we are the only country in the
world with an advanced economy that doesn't provide functional full
coverage, that is, somewhere 96, 97, 98 percent. Social security has 98
percent. You've always got a few people just walking around out there,
so it's impossible to have 100 percent coverage of anything. But all
other major nations do this. We don't.
Secondly, in spite of the fact that we don't, we spend 40 percent
more of our income on health care than anybody else. This year we're at
about 14.2 percent of our income going to health care. Canada is at 10;
Germany is at 8.5. And Germany, as you know, has a very fine
pharmaceutical industry, a very fine research industry, and high-quality
health care as well.
Because health care costs have been going up faster than the rate of
inflation, they have been eating up an ever larger percentage of both
national and State budgets. You know this. A lot of you who served for
some time have seen your budgets every year go more and more and more
for health care, less and less and less for education and for economic
development, for tax relief, for whatever else you might wish to do.
If you look at the chart of the Federal budget, it's absolutely
stunning. Now, if you start next year and string it out until the end of
the decade, we're pretty flat in all discretionary spending. Defense is
coming down, and I would argue it's coming down just as much as it can,
and it should not be cut more. And health care costs are exploding. The
job of being a Congressman or a Senator within 4 or 5 years will amount
to showing up in Washington and writing health care checks and going
home unless we do something to reverse these trends.
And yet, in spite of the fact that we're spending much more money,
we are the only nation in the world that's going in reverse in coverage.
Ten years ago, 88 percent of the American people were covered; today, 83
percent are. Now, you may say, ``Well, that's just one in six. Well,
that's good; 83 percent are covered.'' The problem is that 16 percent is
a lot of folks, for one thing--17 percent.
Secondly and perhaps more importantly, the number of people who are
at risk of losing their coverage is far greater. Who's locked into
coverage, who's locked in? If you're on Medicaid or you're very poor,
you're locked in. If you have Medicare, you're locked in. If you're in
jail, you're locked in; you get coverage. If you're very wealthy, you're
locked in because you can buy it. If you're a politician or you work for
government, you're locked in; you get it. Almost everybody else is at
risk of losing their health care. And keep in mind, you have pushed for
lifetime learning, you have, be-

[[Page 1516]]

cause you recognize that younger workers are going to change jobs seven
times in a lifetime.
Now, how are we going to provide that kind of security? And let me
say there is a human face behind this. I don't want class warfare, but
let's look at the facts. Over 80 percent of all the people without
insurance in America are people who work for a living; they're working
people. This morning I had coffee with a man named Jim Bryant and his
wife, Mary, and their two children because I read about him in the
Boston Globe. He works 60 hours a week and doesn't have any health
insurance. And they talked about how much they worked and said they had
a good life and all the extra money they had they were putting away for
their kids' college education, but they would be ruined if they ever had
an illness.
And I asked him if he could afford to pay something, and he said,
``Sure.'' I said, ``Would you like to know how much I pay a month for
health care as the President of the United States, or Members of
Congress or members of the Federal Government?'' He said, ``Yes.'' I
said, ``We pay about $100 a month, and our employer, you, pays $300 a
month. And he said, ``I could pay that easy.'' He said, ``I could pay
twice that.''
I was in western Pennsylvania, Governor Casey's State. And by the
way, I appreciate your support for reform and your attempt to resolve
the abortion issue, Governor Casey. But I was in western Pennsylvania,
Greensburg, Pennsylvania; two women got up and spoke before me. I don't
know if they were Republicans or Democrats, don't have any idea who they
voted for. One of them was a dairy farmer, 62 years old. And you know,
that's about the hardest farming there is. You've got to work 7 days a
week because you can't tell the cows to quit producing milk. Sixty-two
years old, they finally had to give up health care at the time she
needed it most, this woman did, she and her husband, because they just
couldn't afford it anymore.
And then, after that, a woman spoke who was a mother of five
children, and she introduced her husband. She had had cancer, and he had
had to change jobs and didn't have health insurance. And there are lots
of people out there like that. We're talking millions of people, not
just a few. And the issue is not just them but it's everybody else that
could be in that position.
Now, the reason I'm bringing this up is that it is important to
understand what the problem is when you analyze what the solution should
be. And the problem is not just that one-sixth of the American people
don't have health care and that the costs are running out of control but
that many, many more Americans are at risk of losing their health care.
So, the question is, what should we do? I recommended a system of
private insurance participated in by everybody, with a break for small
business that gives them lower cost and allows them to buy insurance,
small business and self-employed people and farmers, in big groups the
way governments and big employers do, maintaining consumer choice but
with cost constraints like managed care. And then I went around the
country and listened to people and listened to you all tell me what you
thought was wrong with it. And we came back with modifications that had
less bureaucracy, fewer boards and commissions, more flexibility for the
States, less burden on small business than we originally proposed, more
choices for the American people in health care, and a longer phase-in
period because there is always a law of intended consequences in
everything.
So everybody in this debate agrees we have to phase this in. No one
believes we can do it next year. Everybody believes this has to be a
multiyear phase-in. Now, that's what we offered, and you can find that
in some form or fashion in the bills which are working their way through
the Congress.
Now, what is the alternative? If you want to cover everybody, or
nearly everybody, near as I can tell there are only three ways to do it.
You can do it the way Canada does and the way we do for seniors through
Medicare, by having a tax that does it. That didn't seem to me to be
feasible, abolishing all private health insurance and replacing it with
a tax, although you could do it for even less money than we're spending
today and cover everybody.
You can do it the way Hawaii does and the way Germany does and the
way most of us do it, by just extending the system we have

[[Page 1517]]

now and asking employers to pay some portion of their employee health
insurance and asking the employees to pick up the rest.
You could ask the employees who don't have insurance to cover their
own insurance and give them a break, if they're low-income people, to do
it. The problem with that, obviously, is whether you would encourage
everybody who is on the margins to dump their employees.
There may be some other way to do it, but I'm not sure what that
would be. You could get close to that, maybe, by a system of subsidies
to middle class and lower middle class people and by putting all the
small businesses, giving them at least a chance to be in buyers' co-ops
and doing something like what Governor McWherter and others have done
with the Medicaid program to put it in some sort of managed care
situation so you can save some money and provide some money to cover
others.
But I ask you to look at the evidence. More than 45 States have
passed some sort of partial health care reform and insurance reform in
the last few years. But State spending has continued to go up, business
spending on health care has continued to go up, and coverage has
continued to go down. Indeed, in a study I recently saw, only 10 States
actually had reduced the number of uninsured people after all their
reforms were implemented, and 5 of them only had reduced the number of
uninsured working people, mostly States that had provided very generous
benefits for people who would move from welfare to work.
So what are we to do? There was a recent Wall Street Journal article
which said that even in States that had insurance reforms without
universal coverage, ``fewer people have coverage than under the old
system.'' Now, why is this? Why is this? Because the system we have
encourages waste and inefficiency and irresponsibility. Under the system
we have, people who cover their employees pay for those who don't,
indirectly, because people who don't have coverage when they get real
sick show up at the emergency room, they get health care, and the costs
are passed along. Because, under the system we have, without more people
in managed competition environments, the more you do, the more you earn,
whether it's needed or not. Pennsylvania has had a very valuable reform
in this regard by simply publishing the costs of various procedures
across the State of Pennsylvania, and the results showing that there is
not necessarily a correlation between the most expensive care and the
best results care. That's something that can be done everywhere.
And finally, it's very expensive because we're the only country in
the world that has 1,500 separate companies writing thousands of
different policies so that every doctor's office, every hospital, and
every insurance company has to hire a slew of clerical people to figure
out who is not covered for what. And we pay for all that. That's 4.2
percent difference in America and Canada. Let me just give you an idea
about how much that is: That's about $250 billion a year. That's not
chicken feed.
Some of that money is because of medical technology and high quality
care; some of that money is because of violence and illness and AIDS;
but a lot of that money is pure, old-fashioned inefficiency. And so we
have to ask ourselves: What should we do? You have already said no to an
alternative proposal that would cap the Federal share of Medicaid, cut
Medicare without giving any extra benefits to senior citizens, use money
to help the poor, and do nothing for the middle class. I think it is
important to take the rhetoric out of this and ask what will work.
I heard again the litany of things that people have said, that we
don't want a Government takeover of one-seventh of our economy. No, we
don't. That's why I propose doing what Hawaii did. Hawaii is not in
control of the health care system, are you, Governor? Private insurance,
not a Government takeover.
We don't want job loss. The Congressional Budget Office says there
will be job gain if you stop all this cost shifting over a 10-year
period. And Hawaii's experience indicates that there will be job gain.
We do not want to bankrupt the States, and we don't want to bankrupt the
Federal Government. That's why we have to have hard cost estimates. At
least we have them on our plan.
Now, I read your proposal, and we have made some changes in our plan
to reflect

[[Page 1518]]

your proposal, to make it more flexible, respect State initiatives more,
have less regulation, don't have mandatory alliances. But the question
is, what are we going to do that works?
Just yesterday, the Catholic Health Association released a study
conducted by Lewin-VHI which says that if you have insurance reforms and
low-income subsidies without having coverage for everybody, middle class
people earning between $20,000 and $29,000 a year will wind up paying
$484 a year more for their insurance.
Why is that? Because if you require everybody to be covered, and you
say they can take it from job to job, but you don't have everyone
covered, then more single individuals who think they'll be healthy and
live forever won't buy health insurance, more small businesses on the
margin will drop it, and the cost will rise for everybody that's left.
So I say to you, you know, it was Senator Chafee, a distinguished
Republican Senator from Rhode Island, who said that you can't have these
insurance reforms without universal coverage. He said that. I didn't. He
said it was difficult to conceive of how you could have a right of
people to carry their insurance policies from job to job, to job, unless
you had some system in which virtually everybody was covered.
Now, if you look at the Hawaii experience, they have had a program
based on employer-employee shared responsibility since 1974, 2 years
after it was first proposed by President Nixon and Senator Packwood.
They have had it. What's happened? Infant mortality is down by 50
percent. The number of people without insurance has shrunk dramatically.
Unemployment has fallen. The cost of living is higher in Hawaii than
almost any place in America, with small business premiums at 30 percent
below the national average. Why? Because everybody participates, nobody
bumps anybody else out of it, and everybody's in big buying pools.
Now, what are we going to do? I will say again, we have to do
something that works. We have to do something that works for families
like Jim Bryant and his wife and two kids, something that works for the
people that are out there in all of your States who are working, who are
not.
I was in Columbus, Ohio, the other day, and I talked to a woman who
ran a delicatessen. She had 20 full-time employees, 20 part-time
employees, and she had had cancer 5 years ago. And she said, ``I'm in
the worst of all worlds. I cover my 20 full-time employees, and we pay
too much because I'm a small business person and I've got a preexisting
condition. And I'm at a disadvantage with all my competitors. But I feel
guilty that I don't cover my part-time employees. If you had a system
where I could buy insurance at a rate competitive with government and
big business and where my competitors had no advantage over me, I would
gladly do it.''
So again I say, I am open to any solution to this. And I believe the
States ought to be the laboratories of democracy, and I want you to have
more flexibility. But at a certain time, I heard Governor Romer's
comment earlier, we have to look at the evidence. And so I say, if you
imagine what the world will be like when the century turns and we start
a new millennium, if you'll imagine what it would be like in America and
what you want it to be like and what you've worked so hard for it to be
like, you want us to have a competitive economy; you want our deficit to
be under control; you want our debt to be a smaller percentage of our
income; you want us to have a system of lifetime learning; you want us
to have a trading system where we can grow in a world economy.
You do not want every Governor and every President of both parties
in the future to spend all their time writing checks where they're
paying more every year for the same health care, and they haven't solved
a problem which has been solved elsewhere. All I ask in these closing
weeks of this debate is that we take the political air out of the
balloon and ask ourselves what will work for ordinary Americans.
Now, let me close just by asking every one of you to read this
letter that was published in the Boston Globe this morning because one
thing I think every Democrat, every Republican, every independent in
America agrees is that for people who have it, we have the best health
care in the world. We have the finest medical schools, the finest
medical centers, the best medical research. Every-

[[Page 1519]]

body agrees on that. Senator Dole and I agree on that. Everybody does.
This is a letter from the people who are providing it in this area.
They are part of the 100 people who came to the White House the other
day representing academic medical centers who said, if you want to keep
what is best about American health care, you will have to fix what
doesn't work about it. You will have to find a way to cover all
Americans because we are being hurt now. We used to pass our costs on to
everybody else, but States are controlling their costs. The Federal
Government's controlling their costs. These big companies that used to
send their employees to our medical center, they're controlling their
costs. And we're left holding the bill for all the poor people we have
to care for and all the middle class people with horrible problems that
show up without insurance. And please give us universal coverage if you
want the medical schools of America to continue to work. Read this.
All I have tried to do, folks, is to consult with everybody from Dr.
Koop who was President Reagan's Surgeon General to the heads of our
biggest medical schools to the heads of our biggest corporations that
can't deal with their medical problems to the small businesses that want
to buy insurance who can't to come up with something that works. I have
no pride of authorship and no pride of details. I just want to do what
will work for people like Jim Bryant and his wife and kids. And I think
you do too. If we'll keep that attitude, we'll find a solution in the
next 3 months to the problem of health care.
Thank you, and God bless you all.

[At this point, Gov. Carroll Campbell, Jr., of South Carolina opened the
floor for questions. Gov. Terry Branstad of Iowa then noted that there
was no consensus on employer mandates and asked if a consensus agreement
could be reached on reform of the tax system, the medical malpractice
system, and the insurance system.]

The President. Let me--I'm glad you asked the question like you did
because it gives me a chance to maybe be a little more direct in what I
was trying to say before. If you look at the experience of the States,
my answer to you is it depends upon whether in the aggregate, based on
the evidence that we have and the best opinion of the medical experts,
we increase coverage. And we're moving toward what I think we all want,
which is a phased-in deliberate effort to get toward universal.
The evidence is, Governor, that if you do these insurance reforms
and you don't do something that you know will increase coverage among
working people the impact of the insurance reforms will be to decrease
coverage among working people. That is what happened in a number of
States in the last 3 years.
We've got 5 million more Americans without insurance coverage now
than we had in 1988, and we only have 1.3 million more people living in
America. So the rest of them lost their coverage. And most of them were
living in States where insurance reforms occurred.
So I will say again, it depends on what else is in there. There may
be some way other than an employer mandate to do this. I heard Governor
Waihee say that this morning on television. There may be some other way
to do this, but the real issue--the test ought to be the test you apply
to yourselves. That's the only test I have. Will it do what we say it's
going to do? We could pass a bill and all shout hallelujah and get by
the November elections. But there will be real consequences to what
happens here. And those consequences will be apparent in '95, '96, '97,
'98, '99. The answer is, what will happen to the people.
I just think we have to be careful. We have evidence; we know now
what happens. A lot of these insurance reforms very much need to be
implemented. But if they're not implemented in the right way, they will
simply raise the price of insurance for everybody else, causing more
single individuals and more marginal small businesses to drop coverage,
which will shrink the pool and increase the rates. And the cycle will
continue.
I mean, it's almost unbelievable when you look at it that we've gone
from 88 percent coverage, backsliding down to 83 percent as a nation.
And I will say again, only five States have been able to show in the
last 5 years an increase in coverage among the working uninsured. That's
no offense to you; I ap-

[[Page 1520]]

plaud all of you. I tried to do it, too. I'm not criticizing anybody.
I'm just saying at some point we have to look at what the evidence
shows. And I don't think we should do something that will not work. But
I would not rule out a health bill that didn't have an employer mandate
if we knew we were moving toward full coverage and we had some evidence
that it would work.

[Gov. Roy Romer of Colorado advocated a phased-in expansion of the
employer based system for health care.]

The President. Governor Romer, I'm very much in favor of a phase-in.
I don't think anybody--you can't mess with something this big unless you
do it over a period of years. And the message I got after meeting with a
lot of you and with others and people in the Congress is we ought to
lengthen the phase-in a little bit; we agreed to do that.
Let me just say one thing to go back to your question and the
question Governor Branstad raised, is, there is some reason to believe
that if we--and I'm not for unfunded mandates, but one of the things I
think we have to do in this bill is, I think that enrollment in these
alliances, purchasing alliances, these buying co-ops should be
voluntary, but I think every State should have one. And they don't cost
very much; California has only got 11 folks working in theirs, but I
think we ought to pay the bill for it. I don't think we should have an
unfunded mandate, but I think that every State ought to set some network
up.
If you look at what's happened in Florida, for example, where--I
wish Governor Chiles were here--they have very restrictive rules on who
can get in. I believe you have to be in a business with 50 or fewer
employees, and I believe you have to have been without insurance for a
year, and they still have very heavy subscription.
In the State of California--I don't think Governor--is Governor
Wilson here? In the State of California where they had 2,400 businesses
enrolled, which is not an enormous number in a State as big as
California, but it's not insignificant, they had 40,000 employees in the
pool, and every single one of them got the same or better health
insurance for lower premium costs.
So we know that there are certain economies of scale that can be
achieved here. The question is, will they be offset by the insurance
reforms if you don't also do something to increase the pool of the
covered people. That's really what we've got to deal with. As you know,
I basically agree with you. I know Governor Lowry--and they wrestled
with this in Washington--essentially reached the same conclusion. There
are lots of adjustments that can be made: You can make adjustments in
the benefit package; you can make adjustments in what's the percentage
that the employer and the employee should pay.
But the main thing we have to do is to keep increasing the coverage.
If you keep sliding back, you're looking at a system now that's headed
toward a financial disaster. And in the end, Government will wind up
picking up a bigger and bigger share of the bill, which is just what we
don't want to happen, I think.

[Gov. E. Benjamin Nelson of Nebraska thanked the President for his
bipartisan comments and requested the maximum amount of flexibility for
the States.]

The President. I am very open to that, Governor Nelson. For one
thing, if you look at it, some States--we've got a couple of States
besides Hawaii that are already at or above 90 percent, where they can
imagine themselves reaching, through various mechanisms, 95 percent, 96
percent, 97 percent coverage.
As I said, I think we have moved in Social Security. We were at 97
percent Social Security for many years. I think we're just by
improvements in bookkeeping, up to a little above 98 percent now. So we
know we're not going to get right at 100 percent, but we know that
you've got to get somewhere in the ballpark of 95 percent or upwards so
you stop the cost shifting and you have economies of scale for all of
the small businesses that are participating.
But there are differences. The economic realities and the
demographic realities are so different from State to State, I think
you're going to have to have some more flexibility. And I'm quite open
on that, to doing some more on that.

[[Page 1521]]

[Gov. Brereton Jones of Kentucky discussed the need for universal
coverage and an employer mandate and the need for these changes to come
from the Federal Government.]

The President. Let me just say--[Applause] thank you--the reason I
proposed the shared responsibility requirement is the reason--there were
two reasons. One is the one mentioned by Governor Romer. It was the
natural outgrowth of what we had, and we knew that we could get studies
that would show that it would actually lower average costs of small
business. We also knew we could afford to subsidize the smallest
businesses and the people that were on the lowest profit margins so they
could make it. And we knew that if that happened on a national basis,
nobody would be at a competitive disadvantage.
I know that these ads that this other health reform group has been
running--I didn't even know about it until they were on the air--
involving the fast food operations and not covering their workers in
America and covering their workers in Japan and Germany have been
somewhat controversial, but they make the point, which is that if all
your competitors are in the same boat you're in, you don't go broke
doing this. They make that point. And so, I did it for that reason.
The second reason I recommended it, is that we had evidence. We had
the evidence of Hawaii; we had the evidence of Germany which has a mixed
system and which provides high-quality care at a lower cost even than
the Canadian system. So, we had evidence. We had a system that could be
expanded, and we had evidence. I have never ruled out another option. I
just have never seen one I thought would work. And I do believe we have
to keep working toward that.
And as I said, I keep saying there ought to be a middle ground here.
And I always enjoy reminding Senator Packwood that he and President
Nixon recommended the 50-50 employer-employee split in 1972, and I don't
believe that the Republican Party has moved that far from its moorings
in the last 22 years. So, I'm asking them to come home a little bit, and
I still think we can do it.
Q. Mr. President, I didn't mean to ask a question, but I cannot let
Governor Jones' statement go unanswered. That is not what Senator Dole
said. Senator Dole came in, and he indicated a willingness to move. What
he said was he didn't think we could get there all at once, and if we
couldn't we shouldn't abandon the effort.
The President. I agree with that.
Q. He didn't want you to think he was against ``all,'' and his
statement was, ``I'm not against coverage for all.'' He didn't think we
could get there, but he didn't think we should abandon the effort if we
didn't get 100 percent at once though. And I didn't think it's fair to
him to have it depicted that way, and I wanted to correct that, sir.
The President. Let's look at the political context in which we're
operating here, the context in the country and the context in the
Congress real quickly. I know I have to quit, but you can help to change
the context. If you're Democrat, you can help to change it; if you're
Republican, you can help to change it if you want us to get together.
Let's be fair now to everybody involved, including the leaders of the
other party. Let's look at what everybody's up against.
When I put out my plan, the Health Insurance Association didn't like
it because the alliances were mandatory which meant that fewer insurance
companies would get to compete for health insurance business and because
we had premium caps on there, and they didn't want that. They thought it
was too regulatory. So, they put Harry and Louise on television. And we
didn't have the money to answer that, and so, after the time they've
been on television, everybody else has done all their letter-writing
campaign and all that stuff had happened, they made something called the
Clinton plan unpopular even though the basic elements still have the
support of 60 percent or more of the American people when you strip it
away. So, that happened.
Ironically, the Health Insurance Association favors the employer
requirement. Who doesn't favor that? The NFIB is against it. They have a
lot of insurance agents in their membership, and they have small
business people who ideologically don't think they should be required to
offer insurance. And the conservative wing of the Republican

[[Page 1522]]

Party is against it. That's the context in which we meet and bring it to
the Congress.
Now, what do we try to do to offset that. First of all, we made some
changes in our plans, made it less bureaucratic, more flexible, more
open, and responded to you. I explained that. Secondly, we put together
a group of small business people, 29 different large groups with 600,000
small businesses to say ``we'd be better off if everybody had to pay and
our costs would go down. Please do this.''
In other words, what we're trying to do is to get back again to
where we can have a debate that's not so politically charged. The
problem you have, obviously, in the Congress now is--and the problem and
the opportunity--is that under the rules of the United States Senate
only the budget can be passed without a filibuster. No other bill can
pass the Senate not subject to a filibuster. So that means that if 41
Senators decide that bill X shouldn't come to a vote, it can't come to a
vote.
So that's why all the Democrats have been saying all along, we've
got to have some sort of bipartisan support here. And again I will say,
what I would like us to do is to come back to the principle that we must
do what we know will work to provide security, to provide control of
costs, to maintain choice and quality. And if we just will be guided by
that, we will come up with a bill that the American people will be proud
to have us sign without regard to their party.
We have been through a long period here of congressional debate and
discussion and everything, and the political atmosphere has been charged
and gone up and down. There's a lot of unreality out there. There's been
a lot of reality around this table today. If we can bring that back to
the Congress, we'll get a good bill, if everybody will just forget about
all the rhetoric and do something that will work.
But we must not blind ourselves to what these medical school deans
said. I mean there was 100 of them that came to see me. They know what
they're doing. They know what works. And we have to do something that
works. That's my only bottom line. Let's do not mislead the American
people. If we're going to act, let's do something that will leave the
people in New Mexico and Utah and Montana better off.
Thank you very much.

Note: The President spoke at 11:18 a.m. at the Hynes Convention Center.