[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.