[Weekly Compilation of Presidential Documents Volume 34, Number 31 (Monday, August 3, 1998)]
[Pages 1546-1548]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
Remarks on the National Economy and an Exchange With Reporters

July 31, 1998

    The President. Good morning. I want to thank the Vice President, Mr. 
Bowles, and our economic team for joining us today to talk about the 
continuing strength of our economy and what we have to do to make it 
stronger as we move toward a new century.
    Five and a half years ago, we set a new strategy for the new 
economy, founded on fiscal discipline, expanded trade, and investment in 
our people. Today our economy is the strongest in a generation. While 
the latest economic report shows that growth in the second quarter of 
1998 was more moderate than the truly remarkable first quarter, it shows 
that our economy continues to enjoy steady growth. So far this year, 
economic growth has averaged 3.5 percent. This is growth the right way, 
led by business investment and built on a firm foundation of fiscal 
discipline.
    We've also learned today that since I took office the private sector 
of our economy has grown by nearly 4 percent, while we have reduced the 
Federal Government to its smallest size in 35 years. Wages are rising. 
Investment and consumer confidence remain high. Unemployment and 
inflation remain low. Prosperity and opportunity abound for the American 
people.
    In the long run, we can keep our economy on its strong and 
prosperous course. Our economic foundation is solid. Our strategy is 
sound. Still, we know from events that, more than ever, the challenges 
of the global marketplace demand that we press forward with the 
comprehensive strategy we began 6 years ago.
    First, we have to maintain our fiscal discipline. This week marks 
the fifth anniversary of the 1993 economic plan that charted our course 
to a balanced budget and reduced the deficit by over 90 percent by the 
time we signed the Balanced Budget Act in 1997. This fiscal discipline 
has had a powerful, positive impact, driving interest rates down, 
pushing investment to historic levels, creating a virtuous cycle of 
economic activity that has helped cut the deficit even further. We must 
hold a steady course, and we should not spend a penny of the surplus 
until we have saved Social Security first. Fiscal discipline helped to 
build this strong economy; fiscal recklessness could undermine it 
dramatically. We must use these good times to honor our parents and the 
next generation by saving Social Security first.
    Second, we must continue to invest in the American people. Five 
years ago I said we had to close two gaps, one in the budget and

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the other in the skills of our people. Now, as we hear of a shortage of 
highly skilled workers all across our country, we have more confirmation 
that America simply must do more in education and training. To fill 
those high-wage jobs, we must have a training system that works.
    In 1995 I put forward a comprehensive proposal to modernize, 
overhaul, and streamline our job training programs. I called it a ``GI 
bill'' for America's workers. With bipartisan support, Congress is now 
poised to finish the job. I was so pleased by the bipartisan 
overwhelming vote in the Senate last night for the ``GI bill.'' And I 
look forward to prompt House action and to signing the bill into law 
soon. Congress must continue this path to progress without partisanship. 
They should abandon plans to make drastic cuts in our Nation's education 
budget. An investment in education is clearly the most important long-
term economic investment we can make in our future.
    The third thing we have to do is to lead the world in this age of 
economic interdependence, and we have to do more there. More than a 
quarter of our economic growth during the past 5 years has come from 
exports. One of the reasons that growth moderated in the second quarter 
is because we are feeling the direct, discernible effects of the Asian 
economic downturn. Simply put, the health of the Asian economy affects 
the health of our own. Just with our grain crops, about half of that 
crop is exported, and about 40 percent of the exports go to Asia.
    We have seen, therefore, this impact already in our rural 
communities. And I've talked about that quite a bit in the last couple 
of weeks. The Asian financial crisis has literally led to a 30 percent 
decline in farm exports to Asia.
    The International Monetary Fund is designed to support necessary 
reforms in those economies, to help them help themselves, and to restore 
growth and confidence in their economies.
    Now, I also want to say something that you all know. It is 
especially important for Asia and for our economy that the new Japanese 
Government move forward quickly and effectively to strengthen its 
financial system and stimulate and open its economy. It is going to be 
very, very difficult for Asia to recover unless its leading economy, 
Japan, leads the way. I welcome the election of the new Prime Minister, 
as well as a former Prime Minister with whom I have worked, Mr. 
Miyazawa, as the new Finance Minister. I am looking forward to talking 
with the new Prime Minister tomorrow.
    And again, I remind the American people of our long friendship and 
partnership in so many ways--political, security, and economics--with 
Japan. We want to work with them, and we hope that this new government 
can find the keys to restore to the Japanese people, who have a great 
economy and a great society, the growth that they deserve.
    Finally, let me say, we must do our part. That is why a commitment 
to the International Monetary Fund is an investment not simply in other 
countries, in their reform but in our own economy. We have to grow this 
economy by selling things to other people. They need the money to buy 
our products. That is why Congress should step up to its responsibility, 
put, again, progress ahead of partisanship, and renew our commitment and 
pay our fair share to the IMF. I urge Congress to do this quickly and 
not to put at risk our prosperity.
    Open and fair trade, a balanced budget, saving Social Security, 
better education, and higher skills--the strategy that has boosted our 
economy for 5\1/2\ years will boost it further as we boldly move into a 
new century. I will continue to do everything in my power and to work as 
hard as I can with Congress to strengthen an economy that offers 
opportunity to all, a society rooted in responsibility, and a nation 
that lives as a community with each other and with the rest of the 
world.
    Again, I want to say to all the economic team how much I appreciate 
the special and the difficult work we have done these last 3 months as 
our country has coped with the General Motors strike, which, thank 
goodness, has now concluded on successful terms, and with the problems 
in Asia and elsewhere.
    Thank you very much.

President's Testimony

    Q. Mr. President----
    Q. Mr. President----

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    The President. Wait, wait, wait. Everybody has got a question. Let 
me give you the answer to all of them.
    Q. You didn't hear----
    The President. I know--yes, I did. I heard all of you shouting about 
it.
    No one wants to get this matter behind us more than I do--except 
maybe all the rest of the American people. I am looking forward to the 
opportunity in the next few days of testifying. I will do so completely 
and truthfully. I am anxious to do it. But I hope you can understand 
why, in the interim, I can and should have no further comment on these 
matters.
    Thank you very much.

Note: The President spoke at 11:57 a.m. in the Rose Garden at the White 
House. In his remarks, he referred to Prime Minister Keizo Obuchi and 
Finance Minister Kiichi Miyazawa of Japan.