[Weekly Compilation of Presidential Documents Volume 33, Number 24 (Monday, June 16, 1997)]
[Pages 861-867]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
Remarks to the Business Roundtable

June 12, 1997

    Thank you very much, ladies and gentlemen. Thank you, Don, for your 
introduction and for the good work that you do and that we have tried to 
do together. I'm delighted to be joined here today by several members of 
the administration. I see Secretary Daley, Secretary Herman, our NEC 
Chair, Gene Sperling, my Presidential Adviser for Public Liaison, Maria 
Echaveste, and Mack McLarty, who is known to many of you for the many 
hats he has worn and now, among other things, is my special envoy to 
Latin America.
    I wanted to come today to talk to you at what we all know is a very 
hopeful time, about what we have to do together to keep our economy 
growing and to prepare America for the 21st century, with the lowest 
unemployment in 24 years, the lowest inflation in 30 years, the highest 
corporate profit in more than two decades, the biggest drop in 
inequality of incomes among working people last year since the 1960's, 
and a stock market that has done reasonably well. [Laughter] We also 
have had the biggest drop in crime last year in 35 years and now 5 years 
in a row of crime going down, by far the largest drop in the welfare 
rolls ever since 1994 when it reached its all time peak. Our country is 
also leading the world again in exports and cutting edge technologies. 
And we can be forgiven if we now hope that we can make the 21st century, 
like the 20th century, another American century.
    The great credit for this remarkable economic turnaround goes 
primarily to American businesses and workers, to small businesses and 
entrepreneurs, to those on the cutting edge of research and development, 
to the responsible policies of the Federal Reserve. But I also like to 
think that our new economic policy had a little something to do with it 
as well.
    In 1993, we replaced trickle-down economics, which had quadrupled 
the Nation's debt, with invest-and-grow economics, starting with cutting 
the deficit. We cut it from $290 billion a year to what is estimated to 
be about $67 billion this year. That is a 77 percent reduction based on 
the 1993 plan. Now, with the balanced budget agreement that the 
administration has reached with the Congress, it will go to zero.
    Second, we have invested in the skills and education of our people, 
beginning to put in place a system of life-long learning for all 
Americans, which starts with expanding Head Start and includes raising 
academic standards, opening wider the doors of college, improving job 
training for employees, and developing with the business community, in 
every State, school-to-work partnerships for those who don't go on to 4-
year colleges or universities.
    Third, we have vigorously worked to open markets for American 
products. With NAFTA, GATT, and over 200 other hard-won trade 
agreements, our exports are at an all-time high and will be further 
advanced by the agreements recently reached in telecommunications and 
information technology. Fiscal responsibility, investing in people, free 
and fair trade, that has been our economic strategy.
    We have also tried to modernize and improve the way the Government 
works with the private sector. The Federal Government now has 300,000 
fewer people working for

[[Page 862]]

it than it did the day I became President in 1993, some 16,000 fewer 
pages of regulations, hundreds of fewer Government programs but, more 
importantly, genuine partnerships with all different kinds of industries 
to grow the economy and preserve the environment and to reach other 
genuine and legitimate aims of the American people, including moving 
people from welfare to work and giving our children a greater future, 
things to which Don alluded.
    The results of your efforts and ours and our partnership have made 
the United States once again the envy of the world. I read the business 
magazines when they come out, and they're a long way from where they 
were in 1993, when I didn't enjoy reading them so much. Now there is a 
hyperbole contest. One says this is the best economy in 30 years; 
another says it's the best it's ever been. I don't feel the need to 
resolve that debate. [Laughter] Regardless, that's a high-class problem.
    But we know that underneath that there are other challenges facing 
us, so I came here to say I think we can keep this going. I believe we 
can do better. But it will require us to make some critical choices in 
the coming months that will determine whether we will keep to the vision 
and the partnership and the forward march that we are on, or abandon it.
    First, we have to finish the job of balancing the budget, and that 
means we have to implement this budget agreement in good faith. It will 
happen in two steps. In the beginning, there will be votes on what's 
called a reconciliation package for the multi-year spending and the 
multi-year tax cut between now and 2002, and then there must be votes on 
next year's appropriations which are faithful to the budget agreement 
and to the reconciliation package.
    It is absolutely essential for both Republicans and Democrats, 
especially those who voted for the agreement--in the House, nearly two-
thirds of the Democrats and nearly 90 percent of the Republicans; in the 
Senate over 80 percent of the Democrats and just over 70 percent of the 
Republicans, who carried with overwhelming bipartisan support in both 
Houses with one party having the greater percentage in one House, the 
other in the other House--it is essential now to implement the agreement 
in good faith. It is quite specific, and ambiguous on very, very few 
points.
    If we had enough changes around the edges that some want to make, 
pretty soon we could make the edges ragged enough to unravel the fabric 
of the agreement. I do not expect that to happen. I expect it to be 
implemented. But you will see a lot of efforts, I think, in the next few 
weeks and months to get people to hold to the terms of the agreement. 
And since you support the agreement, I hope you will support the 
discipline necessary to hold to its terms.
    The second test will be whether we can make good on the critical 
need to invest in our people and especially in education and training. 
This budget contains the biggest increase in educational investment 
since the 1960's. And arguably, in making universal access to the first 
2 years of college after high school, so that it can become just as 
prevalent as a high school diploma is today, it is the biggest advance 
in opportunity for all Americans in education since the GI bill.
    In addition to that, it contains the funding necessary for us to 
conduct a national examination of all fourth graders in reading and all 
eighth graders in math, according to generally accepted national 
standards in 1999. I want to again say, of all the things the Business 
Roundtable has done that I am grateful for, there is nothing that I 
appreciate more than your steadfast adherence to the cause of high 
national academic standards and the proposition that all our children 
can learn, should be expected to learn, and should be measured against 
those standards. I want to particularly thank you and thank my long-time 
friend and fellow Arkansan, Brooks Robinson, for going public on this, 
and thank you for mobilizing other baseball players and getting the 
Orioles involved. Stay with this.
    Even though we just this week had evidence that our fourth graders 
rank well above the national average in the Third International Math and 
Science Test, there are States that are reluctant to participate, and it 
is wrong. It is wrong to pretend that this is some sort of a Government 
plot to take over the schools, which it isn't, or that somehow math is 
different in Washington State than it is in Maine, and that physics is 
dif

[[Page 863]]

ferent in Miami than it is in Montana. That is not true. And we, and you 
especially, have an interest in our hanging tough on this.
    So we can do it. Already, since I called for this in the State of 
the Union, we have education leaders in States reflecting about--now 
over 20 percent of the school students in our country willing to 
participate, but we ought not to stop until we have 100 percent. And I 
thank you for your support of that.
    And let me finally say just one more word about the budget 
agreement. The budget agreement has a unique provision for tax relief, 
and I think that the amount can be afforded and the framework of the tax 
relief is set out in the budget agreement. For me, the tax package that 
they will send to my desk should meet five tests. One, and most 
important, it's got to be faithful to the agreement. If you want to know 
what it can do, just read the agreement. Second, it should help the 
economy grow. Third, it should be fair to working families. Fourth, it 
should target our top priority of education. And finally, it should not 
explode the deficit in later years and make it more difficult to meet 
the fiscal challenges we will face as the baby boom nears retirement.
    Now, the amount fixed in the agreement was $85 billion in the first 
year--first 5 years, and a little less than twice that in the second 5 
years, which allows for natural growth. In the 10-year window that we 
have agreed to, this is--to give you some perspective--will provide for 
a lot of possibilities, but it's about one-tenth the total cost of the 
1981 tax cut, much of which, as you'll remember, had to be undone in 
1982 and then in subsequent years because of what happened to the 
deficit. We don't want to go down that road again, so there are strict 
limits.
    Within these limits, I favor tax relief to help families raise their 
children and send them to college, to pay for lifetime learning, to own 
a home. I could support a pro-growth capital gains tax relief package, 
along with some help to ease the burdens of estate taxes on small 
businesses and family farms, as long as these tax relief measures are 
consistent with the budget agreement and especially consistent not only 
with the 5-year time window but the 10-year time window. We are trying 
to balance the budget over a long period of time, not just have it 
balanced in one year and have it bump up again the next year and leave 
our successors here another set of headaches.
    Now, from my point of view, the tax package revealed by the 
Republicans in the House Ways and Means Committee does not meet all 
those standards. One of the biggest challenges Americans have today--and 
you know this, all your employees do, even upper income people--is 
balancing the demands of work and family, raising a child, and doing 
your job.
    I believe the package that was revealed this week by the House 
committee would make that job more difficult for millions of Americans 
for the following reasons. First, it explicitly excludes 4 million of 
our hardest pressed families from receiving the child tax credit. I 
think that's a mistake because their incomes are so modest, they qualify 
for the earned-income tax credit under present tax law.
    Another provision actually penalizes families with working mothers 
by saying that parents who receive tax relief for child care under 
present tax law will have their children's tax credit cut. I think that 
is wrong. I don't think that we should single out working families who 
need child care for less tax relief. I cannot let that provision stand. 
And since a lot of you employ members of those working families, I hope 
you will stand with me on that in opposing it.
    Nonetheless, let me say that, on balance, I think good things are 
happening. It is bound to be that in the beginning of this skirmish 
there will be a lot of particular proposals made that are inconsistent 
with the budget agreement. Why? Because the budget agreement, while it 
was voted on by the whole Congress, was developed by just a few people. 
And I would dare say that not everybody who voted on it has read every 
word of it.
    So don't get too upset or distracted or think that things are 
hopeless if we get into a big fight here over an issue or two, because 
it's part of the inevitable process of going from the terms of the 
budget agreement to the specifics of a reconciliation package and then 
to the even more specific appropriation bills that will have to pass 
later in the year.

[[Page 864]]

    The third big test, after our investment priorities and balancing 
the budget, is whether we will continue to lead the world in trade. I 
have to say that it is somewhat mysterious to me that we seem to have, 
if anything, even more opposition to expanding trade in 1997 than we did 
when we had the critical vote in 1993, and then again on GATT in 1994, 
when we have more evidence that our policy works.
    With the 200 trade agreements that were negotiated in the first 4 
years I was President went along over 12 million new jobs, the first 
time in history one 4-year term ever saw the American people produce 
over 12 million new jobs. The unemployment rate is at 4.8 percent for 
the fist time in 24 years, since 1973. And in the last 2 years, more 
than half of the new jobs created in this country have been in 
categories that pay wages above the average. We know that trade-related 
jobs pay above the average. So it's not like we don't have any evidence 
here.
    Yet, in the face of all this evidence, it appears to me that there 
are some people--in both parties, I might say--who are afraid to give 
the President the same authority that every President since Gerald Ford 
has had to negotiate fast-track agreements, not just with specific 
countries but within the framework of the general trade regimes of which 
we're a part.
    I do not believe we have anything to fear from more trade with 
Chile. I do not believe we have anything to fear from more trade with 
Argentina and Brazil. I believe we would be making a terrible political 
as well as a terrible economic mistake to walk away from the democratic 
and free market movement that is sweeping the world and especially our 
neighbors in South America, who have known so much heartache in the past 
from oppression and poverty, and have given us a lot of heartburn in the 
20th century, growing out of the Governments they had and the suffering 
of their own people. Now we have a chance to solidify a much more 
positive movement, and we know it is good for us because we have the 
evidence.

So I hope that you will help us win the fast-track vote.

    I also know that there is, if anything, even more at least emotional 
opposition to the extension of MFN to China. You know what a lot of our 
fellow country men and women don't, which is that MFN is the most 
wrongly worded term in Government language. And that's a mouthful. 
[Laughter] We do not seek any special favors for China. We seek simply 
to continue the status quo, treating them as we do other normal trading 
partners. We believe that it will help us to maintain a stable, open, 
and peaceful China. We believe that our interest is having a China that 
is not only stable and open but one that is nonaggressive, that respects 
human rights, works to strengthen the rule of law, and works with us to 
build a more secure international order.
    Now, we have great disagreements with China. The question is, can we 
influence China best by treating them differently from all of our other 
trading partners for the first time in a very long time, or can we 
influence them more by giving the possibility of genuine partnership?
    Every President since 1980 has extended MFN to China. Ending that 
would end our strategic dialog, which has led to cooperation on nuclear 
nonproliferation issues, to stability on the Korean Peninsula, to the 
protection of American intellectual property rights. All of that 
cooperation would go by the boards. It would close one of the world's 
largest markets to our people and our businesses and our exports. It 
could put in danger some 170,000 American jobs today. It would make 
China more isolated and remove incentives to play by the rules of 
international conduct.
    Revoking normal trade treatment would have grave consequences 
especially now, I'm afraid, as we stand on the eve of Hong Kong's 
reversion. In 1984, Great Britain and China made an agreement about the 
terms under which Hong Kong would revert and asked the United States, 
when President Reagan held this office, to bless the agreement. The 
United States did that. We expect the agreement to be honored: one 
China, two systems. We think it should be.
    Ending MFN now would shatter any claim to influence we have on that 
important subject. Half of all China's trade flows through Hong Kong. 
Revocation would have a more devastating effect on Hong Kong probably 
than China as a whole. All the political leaders in Hong Kong across the 
political spec

[[Page 865]]

trum, including the most ardent human rights and democracy advocates, 
have implored us to continue MFN with China and not to revoke it.
    So what I say to you and what I know you agree with, but I hope you 
will say to Members of Congress in both parties, is that this is not 
about whether we agree with China on every issue; it's not about whether 
we have profound disagreements with them; it is about what is the 
interest of the American people and what is most likely to give us the 
largest amount of influence and cooperation with China in the years 
ahead.
    We have to continue to speak out for human rights, and we have, and 
we will. We have worked with the U.N. Human Rights Commission in Geneva. 
Our State Department issues unvarnished annual reports. We meet with 
China's leaders on human rights initiatives. We talk about expanding 
Radio Free Asia's broadcast to China in Mandarin. And all of us have to 
do more on these important issues. We have supported and will continue 
to support programs to advance civil society and the rule of law in 
China. And I ask America's business community to join with us to 
contribute to programs that will support the rule of law in China and in 
other countries where it is desperately needed.
    We need more educational exchanges, more training centers for 
lawyers and judges, more support for those who stand against corruption. 
You have great interest in rules that are predictable and consistent. It 
will help democratic society eventually to emerge and serve our values 
as well as our interests. But we cannot do it, I would argue, if we cut 
off our relations with China in trade.
    The road ahead may not be entirely uniform and will be unpredictable 
and will be rough, but you can disagree with people and still do 
business with them, knowing that if you're talking to them and working 
with them, the incentives not to go over the edge to truly destructive 
behavior and a more isolated world are always there. That is what I 
believe is in the interests of the American people.
    I would point out, too, that I have been heartened by the growing 
support among religious leaders in the United States for continuation of 
MFN status based on the ability of people in China of different 
religious faiths to practice their religion. So we're broadening the 
support. But again I ask you, please help us with this. There are a lot 
of people of great and genuine conviction on the other side of this 
issue, but I think the evidence is on our side and I hope we can 
prevail.
    Let me say, finally, that there are a few other things that I think 
we have to do beyond these three issues of finishing the work of the 
budget, investing in our people, and expanding trade. This moment of 
prosperity and stability has given us an opportunity to work together to 
repair our social fabric, to join together to face those issues which, 
if we don't face them, could flare into crises and keep us from becoming 
the nation we ought to be in the new century.
    And let me just mention a few. You were kind enough to mention the 
summit of service that President Bush, President Carter, Mrs. Reagan, 
and General Powell and I and others sponsored in Philadelphia. One of 
the things we have to do if we want to give our children a better future 
is to help their parents be gainfully employed. We were able to reduce 
the welfare rolls dramatically because of a growing economy and because 
of work we did with States before the passage of the welfare reform bill 
to help them move people from welfare to work.
    Now, this welfare reform bill did two things. It required people on 
welfare who are able-bodied to move from welfare to work within a 
certain amount of time, and it gave the States, in a block grant, funds 
that used to be spent in a Federal entitlement so that they would have 
more flexibility to create incentives for people to move from welfare to 
work.
    Forty of our States now have a windfall there because they're 
getting money based on how much they got when the welfare rolls were at 
their peak, and there has been a 20-percent-plus drop in the welfare 
rolls in the last 3 years.
    I urge you, in all the States that you're working in, to get the 
Governors, to get the legislators to work with the business community to 
spend that money in ways that, with your efforts, can move a million 
more people from welfare to work in the next 4 years. We

[[Page 866]]

moved a million people in the last 4 when we were creating 12 million 
jobs--that had never been done before, the 12 million jobs, neither had 
the million people.
    Under the terms of this welfare reform law, whether we create 12 
million jobs or not in the private sector, we have to move nearly 
another million people. We have got to have your help. But the States 
have the power to do things like give employers the welfare check for a 
year or two to use as an employment and training subsidy for people that 
are especially hard to place, to spend even more money on child care, to 
spend money on education and training.
    So I implore you to help us do this. It will be a terrible thing if, 
having called for welfare reform and personal responsibility, the end of 
it is to wind up hurting poor people. That was never what was intended. 
The children should not suffer in this. And you are going to have to 
take the lead in helping to do this.
    The second thing I'd like to say is, we have to--now having faced 
the structural budget deficit in the country we have to deal with the 
generational deficit. That means we have to have long-term entitlement 
reform to face the realities of the baby boom generation retiring. And I 
will be--as soon as we get the budget out of the way, I'll be working 
with the bipartisan leadership in Congress on an approach to that, and I 
ask for your support.
    It also means that we have to fulfill the mission of the 
Philadelphia summit, with the public and the private sectors doing their 
jobs. Remember what the Philadelphia summit was about: Every child ought 
to have a safe place to grow up, decent health care, a good education 
and marketable skills, a mentor, and the chance to serve.
    And we live in a country where 11 percent of the people over 65 are 
poor, but 20 percent-plus of the people under 18 are. And we cannot do 
well unless we do better by our children. So this intergenerational 
thing is about entitlement reform, but it's also about giving our kids a 
better chance.
    The third issue--the one I'm going to speak about in San Diego in a 
couple of days--and that is the challenge presented to us as we become 
the world's first truly multiracial democracy. We have 5 school 
districts in America today with kids from over 100 different racial and 
ethnic groups--5. We'll soon have 12.
    We have--we all know this, but my Baptist minister from Arkansas 
came up to see me during the Inaugural, and he told me he had a cousin 
who had a Baptist church across the river here in Virginia that now has 
a Korean mission and runs English-as-a-second-language classes out of 
the church. There are thousands of stories like this.
    And yet we know that there are still dramatically different 
perceptions among different racial and ethnic groups, starting with the 
historic tensions that have existed between African-Americans and whites 
in the country and layered on by the successive waves of immigrants that 
pose great challenges to us.
    When you look at how the world is being torn asunder in the Middle 
East, in Bosnia, in Northern Ireland, and Africa, by people who would 
rather kill each other over their differences than celebrate what they 
share, you realize that what we are trying to do here is truly 
astonishing.
    Within the decade, more than one state in America will have no 
majority race--within the decade. Within three decades, the whole 
country will almost have no majority race. We are going to test whether 
what we always say about America is true, that we are basically a 
country founded on an idea. It's not about land. It's not about race or 
ethnic origin. It's about the idea that all of us are created equal. And 
that means, among other things, we have to deal with both the 
perceptions and the reality. And I don't want to get into this except to 
say that I hope that all of you are concerned by the consequences of the 
wholesale abolition of affirmative action on enrollment in higher 
education that we've seen in California and Texas. And I know a lot of 
employers of large companies have led the way in trying to preserve a 
sensible form of affirmative action. So I ask you to consider that 
because this is not just the President and the Government. All of us are 
the stewards of whether we can become one America in the 21st century.
    Finally, let me say on an issue that I know is a concern to some of 
you because I read your ad in the paper--[laughter]--I think that we 
have to prove that we can grow the

[[Page 867]]

economy while not only preserving but actually enhancing the 
environment. And I believe most of you think we can do that. And I think 
the message you were trying to get across in the ad is, don't wreck the 
economy without knowing what you're doing. I understand that.
    But let me say, I was very moved by the speech recently given by the 
chairman of British Petroleum on the issue of climate change. I don't 
know how many of you read it, but essentially what he said is, look, 
nobody knows exactly what the impact of climate change is, but let's not 
deny anymore that the climate is changing and that it can't be good and 
that no harm will be done if we take sensible steps to try to reduce 
greenhouse gas emissions and to do other things which will help us to 
preserve the environment.
    We've had more extreme weather conditions in the United States in 
the last 5 years than we had in the previous 30. And we know from all 
the scientific studies what is happening to the temperature of the 
globe. What I ask you to do is to work with me in good faith to give our 
children a world worth living in.
    A lot of you have made a good deal of money in your corporations by 
technologies which improve the environment. And if we have the strongest 
economy in the world, we will find a sensible way to grow that economy 
in a way that fulfills our responsibilities.
    Today, with 4 percent of the world's population, we produce over 20 
percent of the greenhouse gases. We're up 13 percent since 1990 when 
President Bush and his administration said we would try to hold constant 
through the year 2000.
    I had an interesting conversation with Jiang Zemin in New York about 
a year ago, when he said, I don't want you to have a containment policy 
toward China. I said, I'm not sure--I said, I don't want to have a 
containment policy toward China. I said, my biggest worry about you is 
that you'll get rich the same way we did. And if you do that, you might 
burn the air up because you got 1.2 billion people. And we need to find 
an environmentally responsible way for China to grow.
    So I ask you to join with us in partnership. There is no secret 
plan. There is no scheme here to try to put thousands of Americans out 
of business. I have devoted my passion and the best ideas I could come 
up with to try to get this country in good shape economically and 
socially. But I do believe it is folly for us to believe that we can go 
into the next century without a strategy that says, we're going to be 
responsible and we're going to do our part and lead the world on the 
environmental issues--because we all know what the evidence is. We don't 
know what the consequences are, and we don't want to go off and do 
something that we're not sure makes sense. But we can do this. We can do 
it together. We can do it in a way that makes sense.
     And I ask you not to ever ask us to back away from that but instead 
join hands with us and do what we've done for the last 4\1/2\ years. 
Let's find a way to preserve the environment, to meet our international 
responsibilities, to meet our responsibilities to our children, and grow 
the economy at the same time. I know we can do it. Look at the evidence 
of the last 4 years. We can do anything if we put our minds to it.
    Thank you very much.

Note: The President spoke at 4:37 p.m. in the ballroom at the J.W. 
Marriott Hotel. In his remarks, he referred to Donald V. Fites, 
chairman, Business Roundtable; Gen. Colin Powell, former Chairman, Joint 
Chiefs of Staff; and President Jiang Zemin of China. A tape was not 
available for verification of the content of these remarks.