[Weekly Compilation of Presidential Documents Volume 31, Number 43 (Monday, October 30, 1995)]
[Pages 1933-1937]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
The President's News Conference

October 25, 1995

Budget Legislation

    The President. Good afternoon. Three years ago, I ran for President 
promising to put the American economy back on track and to cut the 
Federal deficit in half. In 1993, without a single Republican vote, the 
Democratic Congress adopted our deficit reduction plan. It was a plan 
that shrunk the deficit, while investing in our people, their education, 
and the technological future of America.
    We took firm steps toward a balanced budget, but we did it in a way 
that honors our values of responsibility and opportunity, work and 
family, a strong American community, and a strong America around the 
world. We did deficit reduction consistent with our values, and it was 
very good economic policy.
    Today, America is on the move. The economy is growing. The American 
people have produced 7\1/2\ million new jobs, 2\1/2\ million new 
homeowners, over 2 million new small businesses, and the lowest combined 
rates of unemployment and inflation in 25 years. And I am pleased to 
announce today that the deficit in fiscal year '95 is $164 billion, cut 
almost in half in just 3 years. The deficit was projected to be $302 
billion, as you can see here, before our plan was adopted. It was $290 
billion in 1992. We began immediately to bring it down. It came down to 
$255 billion, to $203 billion, now to $164 billion in 3 years.
    This is the first time since Harry Truman was President that the 
deficit has actually dropped 3 years in a row. The plan has worked 
better than we projected that it would. And as the chart shows, the 
deficit reduction is for real.
    Now it is time to finish this job, to take that red line down to 
zero. We must balance the budget to take the burden of debt off of our 
children and to free up more funds for investing in our future. But we 
have to do it in the way we did it in 1993, that is in a way that is 
consistent with our values and consistent with a strategy that will 
actually grow the American economy. I have proposed a plan that cuts 
wasteful Government spending and reflects our values. It is the right 
way to balance the budget.
    By contrast, the Republican Congress is taking the wrong way. Last 
week it passed the biggest Medicare cuts in our history. They're about 
to pass about $148 billion in taxes and fees on working families and 
elderly people and low-income Americans. And their budget slashes 
education and technology. It undercuts the environment. In other words, 
it balances the budget, but it still mortgages our future. That's the 
wrong way to go, and I don't intend to let it happen.

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If the Republicans plunge ahead and pass this budget, I will veto it and 
demand a budget that is balanced in a way that reflects our values and 
promotes our economy.
    Before I close, I'd like to be very clear on my determination that 
no one should toy with the full faith and credit of the United States. 
Republican congressional leaders have said they won't pass a debt 
ceiling bill unless I accept their misguided budget priorities.
    For more than two centuries, through wars and depression, our Nation 
has always paid its bills and honored its obligations. For all their 
loose talk, the congressional leaders know that if they were to allow us 
to go into default, this would have a severe impact on our economy, on 
financial markets, and on the interest rates paid by Government, thereby 
increasing the deficit; paid by business, therefore slowing economic 
growth; and paid by millions of homeowners, thereby increasing their 
mortgage rates. That is not a responsible thing to do for the United 
States, and it is certainly not responsible budget strategy. It is 
economic blackmail, pure and simple.
    The Republicans are saying, either you accept what we're doing to 
Medicare, what we're doing to health care, what we're doing to 
educational opportunities, what we're doing to the environment, what 
we're doing to raise taxes on working families with incomes of $25,000 a 
year or less and children in their homes, or we'll just stop America 
from honoring its obligations for the first time in history.
    I am not going to let anybody hold Medicare or education or the 
environment or the future of this country hostage. If they send me a 
budget that says simply, ``You take our cuts, or we'll let the country 
go into default,'' I will veto it. Threats to our future are not an 
acceptable basis for good-faith efforts to resolve our differences.
    The most important thing about this, folks, is that America is 
moving in the right direction. The deficit is coming down. The jobs are 
going up. The crime rate is down. The welfare rolls are down. The food 
stamp rolls are down. Defaults in child support are down. The poverty 
rate is down. The teen pregnancy rate is down. Small businesses are up. 
Business failures are down. We are moving in the right direction. We 
know what strategy works. The strategy that works is to reduce the 
deficit and invest in people, invest in technology, and grow the 
economy. Why would we abandon a proven strategy that works and that will 
take us all the way to a balanced budget to adopt an extreme budget that 
absolutely shreds our values and will weaken our economy?
    We should pass the right kind of balanced budget and finish this 
job. But if people want to know what kind of balanced budget is right, 
look at the record, look at what works. We ought to do what's right for 
America.
    This country is on a roll economically. There is no nation in the 
world better positioned than the United States for the 21st century. And 
all we have to do is to honor our values, learn how to live with all of 
our diversity, and have sound, sensible policies. That's what I'm 
fighting for. And this number today shows that we're on the right side 
of this battle.
    Q. What are your options, and what do you think is going to happen 
if you do veto? Then where--then where do we go?
    The President. Well, we'll do what we've always done in cases like 
this. I will veto, and then they'll either pass legislation that's 
acceptable or they won't. But that is their choice.
    You know, before they ever adopted a budget resolution, as soon as 
they proposed a balanced budget I proposed one. I proposed one without 
frills, one that eliminated hundreds of programs, one that continues to 
shrink the Federal Government, one that continues to invest in our 
future, and one with the kind of sensible economic assumptions that have 
characterized my first budgets. And so far, the response was, ``Well, 
we'd be glad to talk to you, but we're not going to change anything.'' 
So the ball is basically in their court. They have to enact the laws.
    Yes, Rita [Rita Braver, CBS News].
    Q. Mr. President, what have you done to reach out to the Republicans 
and try to talk with them? Have you made any personal calls?
    The President. Absolutely.
    Q. Have you been rebuffed? Can you tell us what's been going on?

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    The President. I don't think that going into the details of what's 
going on would be helpful. But I have--I talk--every time I meet with or 
see Republican Members of Congress, every time I talk to Republican 
business leaders, every time I talk to anybody that I think can have any 
influence in this process, I make privately and in greater detail and 
with more specifics the argument I have just made to you. So I have not 
shut the door; I have kept the door open. And every time there has been 
any kind of public discussion of this, the leaders of the Congress have 
said, ``Well, we'd be glad to talk, but we're not going to change 
anything.''
    Q. Mr. President, you went from a 10-year balanced budget plan down 
to 9 years based on improved economic conditions. Based on this, with 
this decline, can you see it going down every further? Is there any 
narrowing?
    The President. Well, the question is--let me just say, I don't want 
to get into all the complex, technical details. But one of the things 
that has caused all this difference between us is their assumption that 
if their budget is passed, we will have lower growth and lower business 
profits than we have averaged for the last 25 years.
    Now that's amazing to me. They're saying to America, on the one 
hand, ``Support our plan. We have to slash Medicare and slash medical 
care for poor children so we can have a big tax cut and so we can 
balance the budget. But if we do it, it will give you lower economic 
growth for the next 7 years than we've averaged for the last 25.'' To 
me, that is an amazing admission by them. I don't know why they're doing 
that. But that requires them to make hundreds of billions of dollars in 
cuts in education, in technology, in the environment, and aid to poor 
children and needy elderly people that would otherwise not be there.
    So that is a big part of the difference between us. They say, 
``Well, if you adopt this incredibly complicated Medicare plan that we 
only allowed one day of public hearings on--we have lots of time for 
hearings on other subjects, but only one day for this profoundly 
important issue--well, it will control medical costs.'' And then they 
turn around and estimate a rate of inflation a half a percent higher 
than mine. That's over $100 billion dollars of difference between us.
    So I think it's interesting. There's a lot of extreme ideology going 
on here that is driving them under the guise of balancing the budget to 
make cuts that will undermine the ability of our Nation to honor its 
commitment, to give all children a chance at an opportunity in life, to 
honor its commitment to our parents and to our environment, to many 
other things. And I think that's something that we ought to look at.
    We have proven what works. Cut and invest works. Reduce the deficit, 
but invest in our future works. That's what works.
    Q. Mr. President, politically, though--politically, doesn't this 
chart allow you now, after you cast your veto, to come back and 
compromise to something closer to the Republican 7-year model if you're 
both heading toward ground zero?
    The President. That depends entirely on what is in the budget. It 
depends entirely on what is in the budget.
    You know, my idea of what America should look like in the 21st 
century does not include denying tens of thousands of children the 
chance to be in a Head Start program or raising the cost of college 
loans or cutting the number of scholarships by hundreds of thousands or 
putting the biggest burden for Medicare changes on the seniors in our 
country who are the poorest, the eldest, and the sickest. My idea is not 
raising taxes on working families to give people in my income group a 
tax break. I just don't understand that. So it depends on what is there.
    Yes, sir, in the back.

Canada-U.S. Relations

    Q. Mr. President, are you concerned about the possible breakup of 
Canada and the impact that could have on the North American economy and 
Canada-U.S. trade relations?
    The President. Let me give you a careful answer. When I was in 
Canada last year, I said that I thought Canada had served as a model to 
the United States and to the entire world about how people of different 
cultures could live together in harmony, respecting their differences, 
but working together. This vote is a Canadian internal issue for the 
Canadian people to decide. And I would not

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presume to interfere with that. I can tell you that a strong and united 
Canada has been a wonderful partner for the United States and an 
incredibly important and constructive citizen throughout the entire 
world.
    Just since I have been President, I have seen how it works, how our 
partnership works, how the leadership of Canada in so many ways 
throughout the world works, and what it means to the rest of the world 
to think that there's a country like Canada where things basically work. 
Everybody's got problems, but it looks like a country that's doing the 
right things, moving in the right direction, has the kind of values that 
we'd all be proud of. And they've been a strong and powerful ally of 
ours. And I have to tell you that I hope we'll be able to continue that. 
I have to say that I hope that will continue. That's been good for the 
United States.
    Now the Canadian people, the people of Quebec will have to cast 
their votes as their lights guide them. But Canada has been a great 
model for the rest of the world and has been a great partner for the 
United States, and I hope that can continue.

Political Strategist Dick Morris

    Q. Mr. President, in the last few days you've probably read several 
articles about Dick Morris. Would you care to tell us about your 
relationship with Dick Morris, given all of these stories that have 
surfaced?
    The President. Well, the only thing I can tell you is that he worked 
in my first campaign for Governor, and I think he's an able man; he's a 
creative man. And when you have a long-time relationship with somebody, 
you know when to listen and then you do what you think is right, and 
that's the kind of relationship I have. I listen to him, he's been 
helpful to me, and I do what I think is right.

Budget Legislation

    Q. Mr. President, the chart you point out here today indicates that 
things have turned out a lot better than you thought they would, even a 
year ago. Why then would you propose now to go all the way to zero and 
balance the budget, which is something you did not propose to do a year 
ago when things looked a lot worse?
    The President. Because now I believe we can do the job. Keep in 
mind--look here, we're going from $290 billion to $164 billion. That's 
why I proposed to do it over a 9-year period.
    I believe that economic growth--to go back to the question that, I 
think, Brian [Brian Williams, NBC News] asked earlier, someone asked 
this earlier--I think it's quite conceivable that if my budget were 
adopted just as I propose it, that economic growth could take the 
deficit down even more quickly. But I didn't estimate, that is--my 
budget is premised on the economy growing at about the same rate it has 
for the last 25 years, with the profits of our business enterprises at 
about the same level. If the same thing happens in the next 3 to 5 years 
as happened in the last 3, we would have quicker growth and a quicker 
resolution of this.
    But that's why I think we should not be pessimistic about the 
future. The more we can get this deficit down, the lower interest rates 
will be for people in the private sector; that means they'll borrow more 
money, they'll build more houses, they'll have more home mortgages, 
they'll invest in more plant and equipment, and the economy will grow 
quicker; also, the lower our interest payments on our own debt will be, 
which means we'll have more funds to invest in education, health care, 
and the environment.
    So I now believe--I just didn't want to over-promise, Brit [Brit 
Hume, ABC News]. I didn't want to say that I knew we could do something 
we couldn't. I know we can take this down to balance, and we can do it 
in a disciplined way. But I have ordered--excuse me--offered a balanced 
plan that says, let's keep doing what works, and let's don't over-
promise, and let's don't pretend that we can do things we can't do, like 
tell you right now we can jerk $450 billion out of the health care 
system with no adverse consequences.
    Q. You don't mean to be saying--take it to balance now because it 
would be easier, do you?
    The President. No. I believe--what we know, though, is that we can--
when I ran for President, I didn't think I should make more than a 4-
year pledge. [Laughter] And what I said was that I thought we could get

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the deficit to half what it was when I took office as a percentage of 
our income. That's been done, and it's nearly, in real dollar numbers, 
half of what it was. Now, we've had a lot of success with our 
reinventing Government program. We know--I know a lot more about how the 
Federal Government and the budget works than I did the day I showed up 
here. I believe we can take it into balance. But we've got to do it in a 
way that permits us to invest in education, invest in technology, and do 
right by people that have a right to rely on things like Medicare and 
Medicaid.
    Q. Mr. President, you know that eventually you'll have to work out 
this budget dispute with Congress, assuming that they can't override 
your veto. Instead of going through the veto scenario and tip-toeing 
right up to default, why don't you just invite the Republican leaders 
over here and work it out ahead of all of that?
    The President. Well, let me say again, when I proposed this budget, 
before they even voted for their budget resolution, I had my hand 
outstretched. My hand has been outstretched ever since, in all kinds of 
public and private ways. And I believe--frankly, let me say, that I 
believe the same is the case of the vast majority of the Democrats in 
the Congress. I believe we'd like to have a huge bipartisan vote for the 
right sort of balanced budget.
    But at every turn, what have I been told? ``We'll be glad to talk to 
you, but we're not changing anything. If you don't change our deficit, 
we just won't pay the debts of the United States. We'll abandon a 200-
year history of honoring our obligations to pay our debts.''
    So that really is not a question that should properly be directed to 
me. The Congress has to finish its business, and they will make a 
decision. They know exactly where I stand. They know what my principles 
are. And now the American people know that the philosophy that I have, 
the ideas that I have, the values that are in my budget also turn out to 
be very good for the economy and good for reducing the deficit.
    Thank you very much.

Note: The President's 105th news conference began at 4:15 p.m. in the 
Briefing Room at the White House.