[Weekly Compilation of Presidential Documents Volume 33, Number 30 (Monday, July 28, 1997)]
[Pages 1109-1112]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
Remarks Following a Meeting With the Budget Team and an Exchange With 
Reporters

July 22, 1997

Budget Negotiations

    The President. I'd like to make a brief statement, and then I'll be 
glad to answer some questions.
    I've just finished a meeting with my budget team, reviewing where we 
are on the budget negotiations. We have worked very hard to pursue an 
economic strategy of reducing the deficit, cutting where we could, then 
investing more in education, in the future of this country, and selling 
more American products and services overseas. And it's working. I 
believe it's very important now to complete the job and get a balanced 
budget agreement that will continue to invest in our country and enable 
us to grow.
    This agreement--let me say again what this agreement does. I think 
it's important. It has $900 billion in savings over the next 10 years. 
It reforms the Medicare program and preserves the Trust Fund for another 
10 years. It also contains the biggest expansion in health care for 
children since 1965--5 million; the biggest expansion in investment in 
education from the national level since 1965; the biggest increase in 
access to higher education since the G.I. bill passed 50 years ago; and 
billions of dollars to put people on welfare in the work force, as well 
as special incentives to help the distressed areas of this country get 
some jobs and participate in this recovery. That's what this agreement 
does. Now, there are those who say that we'd be better off without an 
agreement; none of these things will happen without an agreement.
    As to the tax cut, my priorities are clear. I want to help children, 
I want to support education, I want to make sure that we give 
appropriate relief to middle income families. I do not believe it is 
right to deprive teachers, police officers, firefighters, nurses who 
have children in the home and who have only one earner and therefore 
earn less than $30,000 a year, of the benefits of this tax cut. And we 
believe we have found a way to get around the objection that some 
Republicans

[[Page 1110]]

have made of having the IRS collect it as a tax payment. We think we can 
avoid that.
    But on the other hand, we don't want to--that's on the Medicare 
premiums--we don't--let me back up and say, we believe, first of all, 
that the tax cut is a tax cut even if it's a refund. Secondly, on the 
Medicare premiums for higher income people, I strongly support that. I 
said as soon as I got back from Europe that I would be disappointed if 
it were not in the bill. There is a dispute about exactly how we should 
collect the premiums. We think we have found a way to meet the 
Republican objective that it shouldn't look like a tax payment and still 
collect the premiums. If you're going to have a collection on upper 
income people, it's not fair to have some people pay it and some people 
not. So we think we've gotten around that.
    Now, let me finally say that I am still quite optimistic that we 
will get an agreement that is consistent with our principles. We've had 
good bipartisan cooperation throughout this process, and I expect it 
will continue. Our budget team is going up to the Hill again shortly, 
and we expect that we'll keep working until we get success.
    Q. Since you're that optimistic, what's the stumbling block? What's 
holding it up?
    The President. We still have some differences of opinion. Let me go 
back through them. On the upper income premiums for Medicare, we have 
some differences in how we think it should be structured, but the main 
stumbling block seems to have been that the Republicans don't want it to 
look like an IRS tax payment. They don't want it to look like a tax 
increase, even though it wouldn't be.
    Our problem is if HHS collected these upper income premiums, they'd 
have to set up a whole new bureaucracy, and our people estimate that 
half the money would be lost. And we don't want another big problem of 
fraud and abuse here. So we've come up with

an idea that we think would allow Treasury to collect the money but to have 
it go directly to the Medicare Trust Fund so there would be no question of 
a tax payment. And we think that would ease a lot of the Republican and, 
frankly, some of the Democratic concerns that it wouldn't look like a tax 
increase. But if we're going to collect the upper income premiums, surely, 
all Americans would say we shouldn't give away $12 billion. And you can't 
expect the really honest person to go out of his or her way to pay it and 
then half the people not pay it, and there would be a lot of 
disillusionment there. So we think we've solved that problem. That's a 
stumbling block.

    And we still have a difference over this refundability. We're going 
to try to work through that. But I think we can get it, but we--I 
offered a tax plan, as you know, right before I left for Europe, to show 
good faith in working with the Republicans. And I think we'll keep 
working through it until we get something that we can both live with.

The Vatican and Nazi Gold

    Q. Mr. President, are you concerned about the revelations overnight 
that the Vatican may have been involved in stashing Nazi-era gold? And 
have you been in touch with the Vatican government over this?
    The President. Well, let me say, I have talked to the--all I know is 
that there was apparently some suggestion that maybe there is a document 
here, somewhere in the Government Archives, which would shed some light 
on that question.
    As you know, the United States has taken the lead on this. We've 
worked very hard. I well remember the first time I heard about it when 
Mr. Bronfman talked to the First Lady about it. And we've worked very 
hard on this. And the Treasury Department has assured me that they have 
historians combing the records, and we will reveal whatever information 
we have and let the facts take us where they lead us. But we'll keep 
working on this until we do everything we can to make it right.

Boeing-McDonnell Douglas Merger

    Q. Mr. President, on Boeing, besides talking to Italian Prime 
Minister Prodi, what other European leaders have you talked to? And 
having made some phone calls, what is your sense? Do you get a feeling 
that there is a chance that the European Commission will not block the 
Boeing-McDonnell merger?

[[Page 1111]]

    The President. I'd like to see a resolution of this. This merger--
the Federal Trade Commission, which, as you know, is independent under 
our law, has ruled that this is clearly not a violation of our laws 
because there is only room for two big commercial manufacturers. And 
indeed, the commercial side of the McDonnell Douglas business has 
suffered with the rise of the European company, Airbus.
    The European antitrust laws are slightly different. Boeing has 
offered a good-faith resolution of this; they're trying to

work through it. Our main concern is that only the antitrust considerations 
play a role in this decision and that we do everything we can to avoid a 
more political decision which would lead to an unfortunate trade conflict 
between the United States and Europe. And we're working hard to avoid that, 
and I've done quite a bit of work on it over the last 3 days and will 
continue to do so. I think there is a way to work this out, and I'm hopeful 
that by Wednesday when the Commission meets that an agreement will have 
been reached.

Medicare

    Q. Two questions on the tax budget deal. Number one, one of the 
criticisms, vis-a-vis Medicare, was whether you had sent a strong enough 
signal that you wanted these higher Medicare premiums. Is that the 
signal that you're now trying to send? And number two----
    The President. No. If you will remember, I think it was--as soon as 
I got back from Europe, I said that I would be--publicly--that I would 
be quite disappointed if we did not have an upper income premium as a 
part of the agreement. I believe that that was a public statement I made 
the minute I got off the plane, practically.
    Secondly, our negotiating team has made it very clear to the House 
and Senate negotiators for a long time that we thought it was an 
appropriate thing to do, that our only concerns were: number one, if we 
were going to do it, we wanted it to be collectible, we wanted it to be 
real; and number two, we did not want upper income recipients to receive 
absolutely no discount at all because that would encourage them to get 
out of the program all together, number one, and number two, because in 
the '93 agreement to reach our $500 billion deficit target, which we 
greatly exceeded, but we took the cap off of the payroll tax that pays 
into Medicare. So upper income people now are paying a very high 
percentage--or much more money into the program than they will ever draw 
out anyway. So, for those two reasons, we thought that we should not 
charge 100 percent of the value.
    Now, I think we can work those two things out. As I said, I 
understand why a lot of the Members of Congress say, ``Well, we don't 
want the--if the IRS collects this, it will look like a tax payment, and 
we don't want it to look like a tax increase.'' And we agree with that. 
So we've now come back and offered them another way to do this, which I 
am very hopeful will break the impasse and enable us to go forward and 
have this. I think it's an important principle.
    Most of the savings in the first 5-year period, indeed, most of the 
savings in the 10-year period, will come from the structural reforms 
that we've offered in Medicare: more competition, more choices, more 
managed care. But still I believe when you look well down the road at 
the time when the baby boomers will retire, it's good to put this 
principle in place now, and I'm very hopeful that we can get it.
    And let me say, I saw some stories today about people worried about 
the political repercussions of this. My best judgment is that a big 
majority of the American people will support this. They understand how 
big the baby boom retirement generation is. They understand how large 
the subsidy is on Medicare. And I would be happy to defend the vote of 
any Member of Congress, Democrat or Republican, who votes for this.
    Q. The second part of the question, if I may----

Nomination of William F. Weld as Ambassador to Mexico

    Q. How about Weld? Are you sending him up----
    The President. Yes.

Bipartisan Cooperation

    Q. Hold on, the second part of the question, if I may. One of the 
issues on the budget

[[Page 1112]]

deal is how much is it complicated by Republican infighting. Can you 
talk about that a little bit?
    The President. Well, my best judgment is that we should do what 
we've been doing. I think--I have seen in the last year a spirit of 
bipartisan cooperation which did not prevail in the previous period. And 
I think that it will continue to prevail. I think it is so clearly in 
the interest of the country. And I don't have any comment about what's 
going on among the Republicans, except that I don't believe it will 
interfere with our ability to reach an agreement. I don't think that 
they will permit it to do so. I think it is in the interests of the 
country, and I think that's what we'll do.

Analysis of Drug Sentencing

    Q. Mr. President, can you comment on Attorney General Reno's 
suggestions on crack cocaine?
    The President. Yes. Attorney General Reno and General McCaffrey have 
sent me their recommendations. I have accepted it, and I have urged them 
now to go to work immediately with the Congress to try to reach an 
acceptable resolution of this. They did a lot of work on it. They 
deserve a lot of credit for the exhaustive analysis that they applied to 
this problem, and I've accepted it. And that's our position, and we're 
going to try to work with Congress now to achieve a resolution.

Nomination of William F. Weld as Ambassador to Mexico

    Q. Today or tomorrow--are you going to be able to pass by Helms, or 
are you going to fight him, or what?
    The President. Well, I'm going to nominate him, and we're going to 
work hard to see if we can confirm him and we'll see what happens. We're 
going to do what we can.
    Q. Do you think it's possible? Albright's using her wiles. 
[Laughter]
    The President. I don't know. That's better than I could have said 
it. [Laughter]

Note: The President spoke at 11:25 a.m. in the Cabinet Room at the White 
House. In his remarks, he referred to Edgar Bronfman, president, World 
Jewish Congress; and Barry R. McCaffrey, Director, Office of National 
Drug Control Policy.