[Weekly Compilation of Presidential Documents Volume 33, Number 21 (Monday, May 26, 1997)]
[Pages 733-738]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
Remarks to Young Presidents and World Presidents Organizations

May 19, 1997

    Thank you very much. Please be seated. First of all, welcome back to 
Washington. I'm delighted to see you. I always enjoy meeting with this 
group. I think a lot of you know that at least--I've identified at least 
three errant members of my administration who have been associated with 
YPO, Erskine Bowles, Mack McLarty, and Phil Lader. There may be more, 
and if there are, they'd probably like to be back with you instead of 
over here with me. [Laughter]
    I will try to be succinct about what I want to say. I know that the 
Treasury Secretary and others are coming on in a few moments to talk 
about the details of our budget agreement and some of the other issues 
that are cooking around here in Washington today. But I'd like to use 
this opportunity to make an official announcement about China. And let 
me just sort of set the stage by saying I think that our country has 
three huge questions that we are in the process of answering as we move 
into a new century and a very different time.
    One is, how are we going to preserve a structure of opportunity for 
the next generation to keep the country going and growing? The second 
is, what kind of society are we going to be? Is this country going to 
work as a whole? Can we deal with problems of crime and welfare and the 
intergenerational responsibilities as the baby boom generation retires? 
And can we learn to live in what is rapidly becoming the world's most 
rapidly multiracial, multireligious, multiethnic democracy? There are 
four school districts in America now where the children come from more 
than 100 different ethnic groups in one school district. And the third 
great question is, are we prepared to do what it takes to see the United 
States continue to be the world's leading force for peace and freedom 
and prosperity? Because ironically, at the end of the cold war, because 
we are not in two

[[Page 734]]

armed camps in the world, all of our economic and military strength can 
only be brought to bear if we're willing to become more interdependent 
with the rest of the world and recognize our linkages.
    In some ways, the decision that we have to make every year about 
China reflects elements of all three of those great questions, our 
prosperity, the kind of society we are, and how we're going to deal with 
the rest of the world. The United States has a huge stake in the 
continued emergence of China in a way that is open economically and 
stable politically. Of course, we hope it will come to respect human 
rights more and the rule of law more and that China will work with us to 
secure an international order that is lawful and decent.
    I have decided, as all my predecessors have since 1980, to extend 
most-favored-nation status to China for the coming year. Every 
Republican and Democratic President since 1980 has made the same 
decision. This simply means that we extend to China the same normal 
trade treatment that virtually every other country on Earth receives 
from the United States. We believe it's the best way to integrate China 
further into the family of nations and to secure our interests and our 
ideals.
    But as we have had controversies and differences with China over the 
years, this decision itself has become more controversial, because there 
are those in both parties in the Congress who believe that if we hold 
our trade relationship hostage to China because of our differences on 
human rights, our weapons technology, or the future of Hong Kong, we 
will have more influence since we buy about 30 percent of China's 
exports every year--sometimes we buy even more.
    But I believe if we were to revoke normal trade status, it would cut 
off our contact with the Chinese people and undermine our influence with 
the Chinese Government. This is a big issue this year because, as many 
of you know, under the agreement signed more than a decade ago between 
Great Britain and China, Hong Kong is reverting to China shortly.
    I think it's interesting that Hong Kong, which has the world's most 
open trading system, has vociferously argued to the United States that 
we should extend most-favored-nation status. Even those people in Hong 
Kong that have been most passionately identified with the cause of 
freedom and human rights and have been most in conflict with the Chinese 
have argued that we have to maintain an open trading relationship with 
them so that we can continue to work with them. I might also say that if 
we were to revoke their normal trading status it would close one of the 
world's most rapidly growing, emerging markets, one that already 
supports 170,000 American jobs and doubtless will support more in the 
years ahead.
    So our broad policy is engagement. That doesn't mean that we win 
every point, but it means we work together when we can and we're honest 
in our disagreements when they exist. For example--and I think it's 
important to point this out--we actually work together with China quite 
a lot. We worked with them to extend the nonproliferation treaty 
indefinitely. That means that we've got over 170 countries in the world 
that say they will never develop any kind of capacity to proliferate 
nuclear weapons around the world in other countries, and they agreed to 
be tested for it.
    We worked with China to get a historic accord on the comprehensive 
ban of nuclear testing. We worked with them to freeze North Korea's 
nuclear weapons program, which, when I became President 4 years and 4 
months ago, I was told was the most immediate major security concern of 
the Nation at the time. We work with them now to advance the 
possibilities that there will actually be a lasting peace on the Korean 
Peninsula, which is the last frontier of the cold war.
    We also work with them on drug-trafficking, terrorism, alien 
smuggling, and environmental decay. And when we don't agree with them, 
we have found ways to say so without cutting off all of our contacts. We 
pressed them to stop assistance to unsafeguarded nuclear facilities in 
other countries. We insisted that they protect the intellectual property 
rights of American videotape and compact disc makers. That's a huge 
economic issue for America. And so far China has done what they said 
they would do in closing down its facilities that were essentially 
stealing money and jobs from America's businesses. That's

[[Page 735]]

still an ongoing problem; it will continue to be one, as it has been in 
every emerging country a long way from the United States that can copy 
things that we do here. But we have certainly fought to reduce the 
problem. We also took action to show our displeasure with provocative 
military actions in the Taiwan Straits last year, and we

stood up for human rights at the Human Rights Commission meeting of the 
United Nations.

    So we have ways to deal with our differences. There are those who 
believe that our differences are so profound they would--we would get 
our way more, if you will, or our position would be more likely to 
prevail, if we cut off all trade contact. I believe that is wrong. And 
we're going to have a big debate about it in the Congress. But today, in 
front of you, I thought I would make this formal announcement that I do 
intend to extend most-favored-nation status. The way it works under the 
law is, now Congress has a chance to try to undo this, and we will have 
a big debate in the Congress. While you're here, if you have an opinion 
on it, I hope you'll express it to your Senator or Member of Congress.
    But how we deal with this goes back to the larger question: What is 
our role in the world? Do you believe we should continue to be the 
world's leading force for peace and freedom and prosperity? If so, how? 
What kind of society are we going to create? Are we going to be one 
nation, or are we going to become more divided by race, by generation, 
by income? And how are we going to preserve a structure of opportunity?
    Now, let me say when I came here, I felt very strongly that we would 
have to change the economic policy, the social policy of the country, 
the way the Government worked--the Federal Government worked--and we 
would have to have a much more aggressive and comprehensive approach to 
the world. On the economic policy, when I came here we had a $290 
billion annual deficit with no end in sight. I was told it would be way 
over $300 billion by this year. It's going to be $67 billion this year, 
77 percent less than it was the day I took office.
    And we also have been very aggressive about trade. Again, there are 
people in both parties who seem to believe that America is disadvantaged 
by open trading systems because we pay higher wages than other countries 
and because many other countries, especially developing countries, have 
more closed economies than ours. Well, now we have some evidence to 
judge which theory is right.
    I've always believed that open trading was good for us because it 
kept us on our toes. It also helps to keep inflation down and 
productivity up. We've got some evidence now, because in the last 4 
years, we've had 200 new trade agreements as well as the big NAFTA 
agreement and the World Trade Organization being set up and an agreement 
in principle with the Asian-Pacific countries to go to a free-trade area 
there by early in the next century and an agreement with the Latin 
American countries to go to a free-trade area of the Americas early in 
the next century.
    In the midst of the welter of all that activity, we can see what the 
consequences were. We also downsized the Government and increased our 
investment in education, technology and science, and medical research. 
Now, after 4\1/2\ years, the deficit's come down by 77 percent, we have 
the lowest unemployment rate in 24 years, the lowest inflation rate in 
30 years, the highest business investment in 35 years, the smallest 
Federal Government in 35 years, and as a percentage of the civilian work 
force, it is the same size it was in 1933 when President Roosevelt took 
office before the New Deal.
    So I think it's hard to argue that we're not moving in the right 
direction. We've also, parenthetically, had the biggest decline in 
inequality among classes of working people in over 30 years. So America 
does not have to be afraid of competition.

America can balance the budget and increase investment where we need to 
increase investment, and we can do this in a disciplined way.

    In the area of social policy, we've passed a new crime bill, took a 
different approach to welfare, basically tried to put the family back at 
the center of social policy and reconcile a lot of the emerging 
conflicts between family and work, which is bedeviling most working 
families throughout the country, including people in rather high-income 
brackets. It is a general problem of our society.

[[Page 736]]

And we have had the biggest drop in welfare rolls in 50 years in America 
in the last 4 years, before the impact of the new welfare reform law. 
And I'll say more about that in a minute.
    The crime rate has gone down 5 years in a row in America for the 
first time in 22 years. And we now know exactly what to do about it. 
It's just a question of whether we will. Not only that, on the more 
troubling problem of youth and gang violence, the city of Boston, the 
city of Houston, and a few other big cities in America have seen big 
declines in youth crime. And in Boston, Massachusetts, not a single 
child under the age of 18 has been killed with a gun in a year and half 
now.
    So there is a lot of confidence in this country now that we can 
actually make sense out of our common life, that we can actually deal 
with these problems. And that's very important. And for the rest of us, 
it's great because we don't have to think up something to do. We've got 
a roadmap out there; we can just try to replicate it, community by 
community, to make it work.
    In the area of our relationships with each other and our diversity, 
I would say that we have made some significant progress. We now--I think 
as a country we've still debating a lot of these things, like 
affirmative action, and I have my own views about that. But I would hope 
that the American people at least understand that if you look at how big 
the world is getting and the fact that our population is relatively 
smaller as a percentage of the whole than it used to be, less than 5 
percent, and our economy is not as big as it once was as a percentage of 
the whole, although still over 20 percent, the fact that we have people 
in the United States from everywhere else is an enormous asset to us in 
a global economy.
    But we have to learn to find a way to respect our differences and be 
bound together by our shared values. And it sounds so simple, it may 
sound almost trite, but when you consider what people do with 
differences in Bosnia, in Northern Ireland, in the Middle East, and in 
countless other places around the world, you sometimes wonder whether 
there is not some primitive urge in all of us that unless it's 
consistently tended to can cause enormous difficulties. And so I think 
that we cannot spend enough time on figuring out a way to make sure that 
we're a very different country but we're still one America.
    Finally, let me say I'm quite determined that we have got to fight 
through all these successive issues here about America's role in the 
world. I've tried to be very careful not to send our troops into harm's 
way and in an indiscreet way, not to pretend that we could solve all the 
problems of the world. But I know that we have an opportunity here and a 
responsibility unlike any ever imposed on a nation in history. Because 
of the way the cold war ended with a victory for freedom and for free 
markets, because other countries are willing to work with us and even 
give higher percentages of their income that we do to the work of 
development and expanding the capacity of people in other countries, we 
have a significant responsibility here to try to fulfill these 
incredible opportunities.
    And every one of you needs to spend some time thinking about this. 
Because historically, our country--historically--has been relatively 
isolationist. If you go through the whole

history of America--George Washington told us that we should beware of 
foreign entanglements, and all of our--we've always been somewhat reluctant 
to get involved in the world.

    I think the only reason we did it after World War II is the Soviet 
Union was there, there was a cold war, the threat was clear and 
apparent. And now--sometimes I think we don't see our own best 
interests. We're going to have another big trade issue coming up after 
MFN, and that's the question about whether the President should be given 
what is called fast-track authority. And for those of you who aren't 
familiar with the trade lingo, all that means is that we can negotiate a 
trade agreement with another country and present it to Congress, and 
they have to vote it up or down instead of, in effect, being able to 
amend it 100 times so that, in effect, it would no longer be the 
agreement that we made with another country--treats is almost like a 
treaty, except it just requires a majority vote.
    I can't see why we wouldn't want to do that when we got 4.9 percent 
unemployment. And another statistic I didn't give you is for the last 2 
years, more than half of the new

[[Page 737]]

jobs in this country have paid above average wages. So I think we should 
feel good about these things. And I certainly do, and I want you to.
    Now, let me just say in closing, they're going to come on and tell 
you a little about the budget agreement. But in the last 4\1/2\ months, 
in the categories I gave you, if you look, it's creating a structure of 
opportunity for America. We've agreed to the first balanced budget in 
over three decades. And it is a compromise agreement between the 
Republicans and the administration and the Democrats in Congress and the 
leadership; it is a principled one. Does it solve all of America's 
problems? No. Will it get us to a balanced budget? Yes, it will.
    And I might say, when I got here, a lot of times there were overly 
optimistic economic assumptions used in putting these budgets together, 
especially by the executive branch, in both parties. Every year I've 
been here, the deficit's been lower by several billion dollars than we 
estimated it would, every single year. So I want to assure you that we 
didn't cook up a bunch of numbers. Now, if we have a horrible recession, 
will the deficit be bigger? Yes, it will. But at least we've been quite 
responsible in the numbers that we've used here to try to make sure we 
were not misleading the American people about this.
    So we got a budget agreement, which is important. We had a new 
telecommunications agreement, which will open 90 percent of the world's 
markets to American producers of telecommunications services and create 
hundreds of thousands of good jobs in this country over the next several 
years. We have had--we got the Chemical Weapons Convention ratified, 
which is a huge problem because we've got to stop the proliferation of 
chemical weapons and it could affect you and your life and your 
community. The guy that blew up the Federal building in Oklahoma City, 
in that truck was fertilizer, a chemical weapon. But in Japan, a lot of 
people died in the subway because they had a laboratory that made sarin 
gas. So this is a major issue. Can we guarantee that there will never be 
anybody in a laboratory making chemical weapons? No. But we can 
dramatically reduce the chances that terrorists can get them in ways 
that make Americans safer all across the country.
    We have reached this historic agreement between NATO and Russia to 
expand NATO and have a partnership with Russia which will enable us to 
have a unified Europe and, hopefully, avoid what destroyed millions and 
millions of people in the last century, in the 20th century, which was 
all these fights in Europe.
    So the country is in good shape. We're moving in the right 
direction. We're dealing with all these issues. Are there things that 
still have to be done? Yes. Have we made adequate provision for the 
retirement of the baby boomers and not imposing undue burdens on our 
children? Not yet. Will we do so? I'm absolutely convinced we will. But 
you have to understand this system will only accommodate so much change 
at one time. I've thought about that a lot in the last 4 years. And the 
fact that we have a budget that will balance the budget, meet our 
national security needs, have the biggest increase in investment in 
education in a generation, continue our progress in the environment and 
medical research and technology, I think is a very significant thing 
and, parenthetically, provide health care coverage to 5 million kids 
that don't have it is very encouraging.
    The last point I want to make is this. The biggest near-term problem 
we have in the country is that 20 percent of the kids who are born in 
this country are born below the poverty line, and many of them are still 
living in completely dysfunctional environments. When the Presidents, 
all of us, the living Presidents, and General Powell sponsored that 
summit of service in Philadelphia, it was about more than trying to get 
everybody to do more community service. It was about trying to focus 
attention on having every community in the country develop a strategy to 
make sure every child has a healthy start, a decent education, a safe 
place to live, a mentor, and a place to serve the community and feel 
worthwhile. That is the biggest near-term problem of the country.
    You live in a nation where drug use is dropping dramatically among 
young adults and still going up among juveniles, where crime is going 
down dramatically around the country but still going up among juveniles,

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except in the instances that I cited and others like that.
    So as you look ahead to your own responsibilities, I would just 
mention two things. Number one, every community needs to develop a 
system of dealing with the children of the community. Number two, the 
welfare reform bill in the budget that we just agreed to will include 
tax incentives that are very tightly targeted to move people from 
welfare to work. And States have the power actually to give employers 
what used to be the welfare check as an employment and training subsidy.
    I would hope that the members of the YPO would consider whether or 
not there is a role for you to play in your States and your communities, 
because under the welfare reform law, we have to move almost a million 
people from welfare to work in the next 4 years. We moved a million 
people from welfare to work in the last 4 years, but over 40 percent of 
that was the growth of the economy, and we produced 12.5 million new 
jobs. Maybe we can do it again. It's never happened in the history of 
the country before that we've had 8 years that good, back to back. Maybe 
we can do it again.
    But under the law, we have to move that many people from welfare to 
work, whether the private economy produces 40 percent of those jobs or 
not, in the ordinary course of growth. There will be incentives there, 
but we had to do this--I would argue we had to do something like this to 
break the cycle of dependency that so many people were trapped in. But 
having now told people, most of whom are single mothers with very small 
children, that there is a limit to how much public assistance you can 
have, and you have to go to work at the end of a certain amount of time, 
period, we have to make sure that there are jobs there for them.
    The communities of our country are going to get about $3 billion 
that will go into the high unemployment areas to do community service 
work when there's no way the private sector could do it. But for the 
rest, it will have to be done by the private sector. So I hope that 
while you're here and after you go home, you will be willing to consider 
whether there's something you could do to help us deal with this 
problem. Because if we can break the cycle of dependency and all people 
who are out of work who are adult, able-bodied, and otherwise have the 
capacity to work, begin to be treated the same instead of having some 
people disaggregated over here as being on welfare as if they couldn't 
work, we will have gone a long way toward changing the future of 
children in America and, therefore, changing the future of the country.
    Thank you very much.

Note: The President spoke at 2:48 p.m. in Room 450 of the Old Executive 
Office Building.