    [Weekly Compilation of Presidential Documents Volume 35, Number 1 (Monday, January 11, 1999)]
    [Pages 18-29]
    [Online from the Government Publishing Office, www.gpo.gov]

    <R04>
    Remarks and a Question-and-Answer Session at the Economic Club of
    Detroit in Detroit, Michigan

    January 8, 1999

        The President. Thank you. Ladies and gentlemen, even though the
    mayor's promised warm welcome to Detroit turned out to be a bit of false
    advertising today, I am delighted to be back. I've had a wonderful time.
    The Auto Show made me feel like a kid again. I wanted to leave with 10
    of the cars myself, but I was embarrassed to say, you know, I haven't
    bought a car in 6 years so I had to go around and ask what every one of
    them cost. [Laughter]
        I liked the concept cars. I liked the orientation toward the future.
    It was a wonderful thing. And we have some people here associated with
    the Auto Show, and I'd really like to thank them for making me and the
    congressional delegation and our guests feel so welcome today.
        I want to thank the mayor for letting me be his stand-in. We've been
    friends a long time. Mayor Archer's friendship is one of many thousands
    of things I owe to my wife. They were friends in bar association work. I
    knew Dennis Archer when he was just a mild-mannered judge with no
    political opinions. [Laughter]
        I'd also like to thank your Attorney General, Jennifer Granholm, for
    being here; my good friend, Ed McNamara, to my left. Thank you,
    Jennifer. Thank you, Mr. McNamara, for being my friend. And City Council
    President Gil Hill, Frank Garrison, President

    [[Page 19]]

    of the Michigan AFL-CIO. And I want to thank my good friend, Governor
    and former Ambassador to Canada, Jim Blanchard. I think he was the best
    American Ambassador we ever had to Canada, and you can be very proud of
    what he did there.
        He also brought me here the first time--maybe there was this many
    people when I spoke in August of '92, but I don't remember it. This is
    the longest head table I've ever seen. [Laughter] I got up at 6 o'clock
    this morning; I didn't do my normal workout. It doesn't matter--I ran
    all the way down--[laughter].
        I'd also like to thank the unusually large delegation from Congress
    who came with me today. And I'd like to ask them to stand and be
    recognized: Congressman John Dingell and Debbie; John Conyers is here
    with his son; David Bonior; Sandy Levin and Mrs. Levin; Jim Barcia; Bart
    Stupak and Mrs. Stupak; Carolyn Kilpatrick and Debbie Stabenow. They're
    all here, and I thank them for coming with me from Washington.
        Here in Detroit nearly a century ago, as all of you know better than
    me, Henry Ford set history in motion with the very first assembly line.
    He build not only a Model T but a new model for the way America would do
    business for quite a long while. He said he was looking for leaders and
    thinkers and workers with, I quote, ``an infinite capacity to not know
    what can't be done.'' People like that came together in Detroit and all
    across America; they forged America's transition from farm to factory.
    Detroit led the way and America led the world.
        Today, as Mayor Archer just documented, Detroit is still leading the
    way and America continues to lead the world. Indeed, we gather today at
    a time of an American economic renaissance. Our budget is balanced for
    the first time in a generation. We are now entering a second year in an
    era of surpluses. This week I announced that our economists project we
    will close out the year and the century with a surplus of no less than
    $76 billion, the largest in the history of the United States for the
    second year in a row.
        Today we received the December unemployment figures. Unemployment
    was 4.3 percent, the lowest monthly rate since February of 1970. For the
    year, it was 4.5 percent, the lowest annual rate since 1969. It's the
    lowest peacetime rate of unemployment since 1957. There were 378,000 new
    jobs last month, for total of 17.7 million. The welfare rolls are the
    lowest they've been as a percentage of our population in 29 years. Home-
    ownership is the highest in history, and in the last 6 years, 7 million
    Americans have bought new homes and another 18 million have refinanced
    them at lower interest rates.
        We also know now with this last month that this peacetime expansion
    is the longest economic expansion in peacetime in the history of the
    United States. And equally important to me, this one is different from
    the ones of the last several years. It is inclusive, not exclusive. We
    have seen, for example, the highest real wage growth in over two
    decades, growing at twice the rate of inflation; the lowest African-
    American and Hispanic unemployment rate ever recorded since we began
    keeping such statistics in 1972. And average family income up after
    inflation by $3500. This is a rising tide that is lifting all boats.
        Closer to home, for many of you, we learned that this week was also
    quite a remarkable year for U.S. automakers, 15.5 million cars and light
    trucks sold last year, the most in 12 years. Ford had its best year
    since 1978. The sales of the former Chrysler Corporation--I met with the
    Daimler people again today, and again I asked them to sell me a Mercedes
    at the price of a Chrysler. [Laughter] And I'm working on making that
    deal for all Americans, I want you to know. [Laughter]
        But anyway, we're excited about this merger, and their brands hit a
    record high, 2.5 million vehicles. GM ended the year on a strong note
    with great momentum for 1999.
        Now, let me compare just for a moment how far we have come these
    last 6 years. The last time I spoke here--and Governor Blanchard brought
    me as a nervous candidate for President in August of 1992--it seemed
    America had lost its way in the strong headwinds of economic change. In
    August of 1992, I said we had a choice to make, whether to create a
    high-growth, smart-work, high-wage economy, or to continue to drift into
    a low-growth, hard-work, low-wage future.

    [[Page 20]]

        In August of 1992, the unemployment rate for this entire area was
    almost 9 percent, the same for the State as a whole. In August of 1992,
    Michigan had lost more than 60,000 jobs in the previous 2 years;
    businesses were folding; residents were losing jobs and hope; crime and
    poverty were hitting record levels.
        The new world of high technology and greater global competition
    threatened to bypass America's heartland. Foreign competitors actually
    described America as another great power in a state of inevitable
    decline. On our own best-seller list, there was a remarkable book that
    asked a question with its title, ``America: What Went Wrong?''
        Well, 3 months after I was here, in my inaugural address I said that
    I believed there was nothing wrong with America that cannot be fixed by
    what is right with America. And today we can, thankfully, ask the
    question: America, what went right?
        The answer is a lot of things. In fact, most things are going right
    for our country. Our real recovery began when we returned to a principle
    as old as our Republic: ``We, the People.'' We have pursued a vision of
    21st century America with opportunity for all, responsibility from all,
    a community of all Americans. We have married old ideals to new ideas,
    to fit our new economy and our new society. We have moved beyond the
    false choices of using Government to hold back the tides of change or
    leaving people to sink or swim all alone.
        We believe the role of Government is to empower people, to ride the
    tides of change to greater heights. We believe in a Government for the
    information age that is progressive, creative, flexible, and yes,
    smaller. You might be interested to know that the Government that you
    have today has more than 300,000 fewer people than it did when I last
    came here to speak in August of 1992. Indeed, it's the smallest Federal
    Government since John Glenn first orbited the Earth.
        For example, under the Vice President's leadership, we've cut more
    than 16,000 pages of Federal regulations; streamlined or simplified
    31,000 more; committed to work with those who bear the burden, as well
    as those who receive the benefit, of future regulations in drafting
    them. In areas from workplace safety to the partnership for new
    generation vehicles with your automakers, which I'll discuss more in a
    moment, to climate change, we are working with business to use
    technology, research, and market incentives to meet national goals.
        Some have called this political philosophy ``the third way.'' It has
    modernized progressive political parties and brought them to power
    throughout the industrial world. Here in America it has led us, I
    believe, to a new consensus, making the vital center once again a source
    of energy, action, and progress. That, I believe, is the only way for
    any advanced industrial nation to thrive in the new global economy.
        Our new economic strategy was rooted in a few basic ideas--first, in
    fiscal discipline. In an era of worldwide capital markets, nations
    purchase prosperity by saving and investing and being prudent, not by
    running big deficits. So we cut the deficit, balanced the budget, sent
    interest rates down, helping people to buy new homes, helping more
    entrepreneurs to start new businesses.
        Also, the reduction of the deficit and the ultimate balancing of the
    budget has freed up more than $1 trillion in capital for private sector
    investment. Unlike past expansions where Government bought more and
    spent more to drive the economy, during this expansion Government
    spending as a share of the economy has actually fallen. And over 90
    percent of those 17.7 million new jobs are private sector jobs.
        The second part of our strategy has been to invest in our people. In
    1992, we had two deficits--one in the budget, but another in our
    investment in our people and our future. A high-tech economy that places
    even greater demands on skills must put people first, as the mayor said.
    Therefore, even as we cut spending and eliminated hundreds of programs
    to balance the budget, we nearly doubled our annual investment in
    education and training. Even as we closed the budget gap, we have
    expanded the earned-income tax credit for 15 million low-income working
    families, giving them hope and lifting over 2 million working people out
    of poverty.
        Even as we cut Government spending, we have raised investments in
    our welfare to work jobs initiative, and invested $24 billion in a
    children's health initiative to bring health

    [[Page 21]]

    insurance to 5 million young people who do not have it.
        Third, building a new American economy has meant making the world
    economy work for us. Until last year, when we had all the turmoil and
    trouble around the world, fully one-third of the strong economic growth
    we had enjoyed in the nineties came from expanded trade. For every
    country engaged in trade, for every market open to our products, the
    base of customers for American goods and services expands.
        That is why it matters to all Americans that we have negotiated 270
    trade agreements in the last 6 years. Not all of them have met all of
    our hopes, and a lot of them have been limited by the economic problems
    faced in particular countries. I think those here associated with the
    auto industry know how hard we have worked on the auto trade agreement
    with Japan. We will never make the kind of progress we intend to make
    there until the economy begins to recover, which brings me to a point I
    will return to in a moment.
        Nonetheless, if you look at our approach--fiscal discipline,
    investment in people, expanded trade--it has enabled the United States,
    the businesses and the people working here, to create a truly new,
    global, high-tech economy. More than 7 million Americans today work in
    technology-related industries, earning two-thirds more than average
    worker salaries. Technology has not just built the computer industry; it
    has transformed existing industries from high-tech research and
    development, in real estate, in construction and, as I saw today, to
    transportation.
        A lot of these cars now that I saw today have more computer power in
    them than Neil Armstrong had to steer Apollo 11  to the Moon. It's an
    interesting time in which we live and we should feel fortunate to be
    here.
        The question for all of us today and the thing I want you to think
    about is, okay, we feel good--and Dennis reeled off the statistics, and
    you clapped, and I was pleased. [Laughter] And I like it even better
    knowing that there are real families now that have work and a stronger
    future for their children and safer streets for them to live on. But the
    question for us today is the question you have to face every day you get
    up, whether it's a good day or a bad day: What are you going to do
    today? And what do you intend to do tomorrow? What are we going to do
    with this prosperity? We can rest on our laurels or press ahead.
        In a sentence, here's how I assess our present condition. America is
    working again. It's working. Not just the economy, the crime rate is the
    lowest in 25 years. A lot of our social problems are receding. It's
    working again. That is the good news. But no serious analyst of our
    condition could seriously say that we have met the long-term challenges
    that our people will face in the 21st century. And there will never be a
    better time to meet them than a time when we have a surplus in our
    budget and a strong surfeit of confidence in ourselves and our ability
    to meet the challenges ahead.
        So I say this is the time to press on with the big challenges of the
    21st century, not just to have America work but to know that it's going
    to be working for decades ahead. What are those challenges? They are
    many, but I will mention just three; I'd like to ask you to think about
    in the context of the mission of the Economic Club.
        First, we must maintain our prosperity and spread its benefits to
    people and places that have not yet felt it. And we must deal with the
    challenges of the global economy, for without a successful global
    economy, our ability to continue to grow and prosper will be
    dramatically limited.
        Second, we must deal with the challenges of the old and the young in
    America. We have to face the fact that the baby boomers are about to
    retire, and when they do, there will only be about two people working
    for every one person drawing Social Security; that more and more we are
    living longer--the average life expectancy in America today is over 76
    years; in 20 or 30 years it will be well over 80 years. That will impose
    great new challenges to meet in long-term care. And we must face the
    fact that we have a challenge of the young, because more and more and
    more, our children tend to have higher poverty rates than our seniors;
    and more and more, our children come from very diverse populations in
    race, in religion, in culture, in income, in condition. And yet, every
    one of them needs to have a world-

    [[Page 22]]

    class education and a world-class opportunity to make the most of his or
    her life.
        And third, we have to grow the economy while meeting the challenges
    of global responsibility, including global environmental challenges. And
    if we are ever forced to really choose between one or the other, then
    our children and grandchildren will be the losers.
        So let's deal with these things briefly. In the economic arena I
    think we have to do the following things. First, in the next year and
    beyond we must maintain our hard-won fiscal discipline, keeping our
    budget balanced, saying that no tax cuts or spending programs, no matter
    how attractive, can put our prosperity at risk by driving us back into
    deficits.
        Second, since all respected prognoses tells us that we are, in fact,
    entering an era of sustained surpluses, we should use this as an
    opportunity to address the challenges of an aging Nation. As I said,
    soon the number of elderly Americans will double. This represents a
    seismic demographic shift for the United States.
        I am grateful that last year the Congress agreed with me to set
    aside the surplus until we save Social Security. Now it is time to
    actually save Social Security for the 21st century and to strengthen and
    secure Medicare for many more years. Medicare is a great legacy of
    Congressman Dingell's father. It is a great program. A lot of people
    depend upon it. It needs some support. And there will be some money
    involved.
        We have the ability now to deal with the challenges of the aging
    population. And as you know, I also proposed a few days ago a tax credit
    to help people pay for long-term care. If we can save Social Security
    for the 21st century, if we can strengthen and secure Medicare for the
    21st century, if we can help families to deal with the challenges of
    long-term care, we will have gone a long way not only to make sure that
    the older years of people will be more secure but to alleviate one of
    the principal worries that people of my generation have, which is that
    our retirement, because we're such a big group, will be so costly that
    it will undermine our children's standard of living and their ability to
    raise our grandchildren. None of us want that, and we have to take this
    surplus and this opportunity and deal with these challenges. And we
    ought to do it right now, this year, with no excuses.
        Now thirdly, we must do more to continue to close the investment gap
    for our young people and our people in their working years. For more and
    more, the income gap in America is a skill gap. We've made dramatic
    progress in opening the doors of college to all Americans, in hooking
    our classrooms up to the Internet, in raising standards in our schools
    and promoting more school choice and charter schools, in putting 100,000
    new teachers in our schools to deal with the growing student population,
    which we began to do last year and we must continue this year.
        In my upcoming State of the Union Address, I will propose further
    reforms and improvements in our public schools, and I will also advance
    a new training agenda to give the American people the assurance that
    they will be able to get the skills they need for a lifetime of
    competition in the global economy.
        Fourth, at this time of turmoil in the international economy, we
    must do more to make the world economy work for all our people and,
    indeed, for ordinary citizens throughout the world. I want to press
    forward with open trade; I have always believed in it. It would be a
    terrible mistake at this time of economic fragility for so many of our
    friends and neighbors and democratic allies, for the United States to
    build walls of protectionism that could set off similar responses around
    the world and lead us into a sustained global recession. That would be a
    mistake. On the other hand, if we expect the American people to support
    open trade, we must be prepared to bring the full force of our trade
    laws to bear upon any and all unfair trade practices.
        Just yesterday I addressed such a practice when I sent a
    comprehensive action plan to Congress outlining our response to the
    dramatic increase in steel imports into the United States, especially in
    the area of hot-rolled steel, where the prices are below what anyone
    believes the reasonable cost of production is anyplace in the world.
        Let me be clear: I am especially concerned about the dramatic surge
    of steel imports

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    from Japan. But there are problems elsewhere, too. If these imports do
    not soon return to their pre-financial crisis levels, my administration
    is willing to initiate forceful action, under our section 201 surge
    protection laws and under our antidumping laws. An open, fair, rule-
    based system is essential to American prosperity. I cannot go to the
    Congress and ask for expanded trading authority, for an Africa trade
    initiative, for a trade initiative for our neighbors in the Caribbean,
    unless the American people know that whatever the rules are, we intend
    to play by the rules, and we expect others to play by the rules, as
    well.
        I would also tell you that this question of whether ordinary working
    people are benefited by expanded trade is an even more deep question in
    other countries than it is in the United States. I went all the way to
    Switzerland a few months ago on the 50th anniversary of the World Trade
    Organization, to argue for changes in the world trading system for the
    21st century, changes that will make sure that the competition never
    becomes a race to the bottom, changes in labor protection, consumer
    protection, environmental protection.
        We should support more free trade, and we should support more input
    from and consideration of those sectors. We should be leveling up, not
    leveling down. Strengthening the foundations of trade also means we have
    to stabilize the architecture of international finance. Now, I'd like to
    just talk about this for a moment.
        All of you know in the last year how the global financial crisis has
    hurt our farmers, our ranchers, our manufacturers. You've seen it in the
    steel industry. One of the problems we have with the import of steel
    from Russia is that the currency value has collapsed as the money has
    flown the country. One of the problems that they had in a lot of the
    Asian countries, from Indonesia to Korea to Thailand to other countries
    that have been troubled, is that money flees the country. Money moves
    across the globe in volumes and at speed far greater than ever before.
    And it has created a situation which permits enormous increased
    investment almost overnight but also can trigger a collapse. All these
    financial mechanisms, the derivatives and hedge funds and all that, very
    often have investments that are guaranteed by only 10 percent margins,
    far lower margins than people can buy stock, for example.
        And the real danger has been, as you have seen all this happen, is,
    number one, that a problem in one country can spread to another and a
    problem in one region can spread to another region. And then if all of
    our trading partners are affected, then we are affected because there
    aren't any markets for our products anymore. Now, we can't have a global
    trading system unless people can move money around in a hurry and at
    great volumes. No one wants to interfere with that.
        So the question is, how can we do that and still avoid running the
    risk of having these huge boom/bust cycles in the world economy of the
    kind that caused domestic depression in the United States and elsewhere
    in the late twenties and throughout the thirties. And we are working
    very hard with other countries to come to grips with this, to try a
    way--find a way to facilitate it.
        But to give you some idea of the magnitude of the problem, every day
    about $1.5 trillion crosses national borders in currency transactions--
    far, far, far--a multiple times more than the daily value of trade and
    goods and services and daily investments. So the trick is that we've
    been struggling with the Europeans, struggling with the Asians,
    struggling with people on every continent who understand this.
        How can we modernize the financial architecture, which was created
    50 years ago, to facilitate trade and investment so that it also
    supports this global economy and the movement of money in ways that
    never could have been imagined? I think we're making progress, but I
    expect it to be a major focus of my international efforts this year. And
    I hope, even though it's a fairly obscure process, it will be clear
    enough to everyone that we will have support for the United States
    leading the way.
        Let me say, finally, we have to do more to renew our greatest
    untapped markets so that we can continue growth without inflation. They
    are not around the world; they are in our underinvested, urban, and
    rural areas here at home.

    [[Page 24]]

        You heard Mayor Archer say that the unemployment rate in Detroit
    proper had gone from 16 to 6 percent. I hope the empowerment zone had
    something to do with that. We have done everything we could across a
    whole range of policies to help our cities and our rural areas to
    attract more investment and opportunity. My budget in the next few
    weeks, which I'll submit to the Congress, will include more initiatives
    to have more opportunities.
        Next week at the Wall Street Project in New York, convened by the
    people who run the Stock Exchange, major companies, and Reverend
    Jackson, I will talk about how we can do more to bring growth to
    emerging markets here at home.
        And lastly, let me just say a brief word about the environment. Last
    May here at the Economic Club, the Vice President spoke and asserted
    that we believe we can achieve economic growth along with cleaner air
    and cleaner water and meeting the challenge of global climate change.
    That is, after all, the idea behind the partnership for the next
    generation vehicle, which we started 6 years ago with those of you in
    the auto industry here, developing cleaner, more fuel efficient cars and
    hoping to make American car companies even more competitive in the
    global economy.
        I was pleased to see some of the fruits of that partnership along
    with the fruits of other governmental-funded investment at the Auto Show
    today. And I'm looking forward to seeing the concept cars from each of
    the companies in a year or so.
        Now, let me say these are some of the big challenges. You may not
    wake up every day worried about the global financial markets. You may
    not wake up every day worried about the Social Security system. And if
    you're anywhere near drawing it, I hope you don't, because it's fine for
    the next few years. But it has been a generation since we have had the
    combination of economic and social circumstances which give us the
    emotional and financial space to think about the future. And this
    country is changing in dramatic ways. I didn't talk about the challenges
    of immigration today and our obligations to children and to our new
    citizens. There are lots of things that we didn't have time to talk
    about. The main idea I want to leave you with is that the temptation to
    rest on our laurels and relax because times are good must be resisted.
        Every business here subject to competition knows that good times
    today can become bad times tomorrow if you don't stay ahead of curve.
    The same is true for a nation. We will never have, in all probability,
    in the lifetime of the people in this room, a better opportunity to take
    the long view, to imagine how our children will live when they're our
    age, to imagine how our grandchildren will live when they are our age.
    These are the challenges we should be dealing with today. And as we deal
    with them, because they will inspire further confidence and further
    investment, they will strengthen the American economy and the American
    society in the near term, as well.
        Henry Ford said, ``Coming together is a beginning. Keeping together
    is progress. Working together is a success.'' That is the question for
    us. Will we rest on our laurels, become diverted in our energies, or
    keep working together? If we work together there are no limits to 21st
    century America. And that's what we owe our children: No limits.
        Thank you, and God bless you.

    New European Currency

        Q. Mr. President, we work until 1:30 p.m., and with that in mind, we
    have some questions that have come from the audience. They are a series
    of questions, but I'll boil them down on this issue: What are your
    thoughts about trade and finance after the launch of the euro, and what
    effect will the euro dollar have on the United States economy?
        The President. I have supported the economic and political
    integration of Europe for a very long time now. As it proceeds and as
    people begin to see Europe as a single entity, we will all come to
    understand that they have more people in the aggregate and a bigger
    economy in the aggregate than we do. There may come a time in the future
    when, instead of the dollar being the accepted standard of international
    currency, it will be the dollar and the euro. No one really knows.
        But I believe that anything that facilitates growth and opportunity
    for our friends in

    [[Page 25]]

    Europe has to be good for us, as long as they don't build walls around
    the European community. That is, if Europe continues to be a more open
    trading environment, if this gives them the confidence and security to
    take down even more barriers--because our economy is still more open
    than Europe--this will be a very good thing.
        We need to support their success. We should hope that this will lead
    to a more rapidly rising standard of living in the European countries
    that don't have such a high standard of living. We should hope that this
    brings them great new opportunities. And we should believe and have
    enough confidence that if they'll keep their doors open, that we'll get
    more than our fair share of opportunities.
        We should also hope that it will bring more political self-
    confidence and that we will be able to work with them even more rapidly
    and more comprehensively in dealing with other challenges, like the
    challenges we face in Kosovo, or the one we faced a few years ago in
    Bosnia that we're still working on.
        So on balance, I have to say I think this is a good thing and I
    think it's an inevitable thing. And I don't think it would be worth a
    moment's attention by anyone to rue the day it happened. They are the
    masters of their own fate; they are going in this direction. I think, on
    balance, it's positive, and we need to figure out how to make it a good
    thing for America and a good thing for the world.

    Steel Imports

        Q. Mr. President, you touched on this in your remarks, but perhaps
    you could amplify. The question is: Dumping of steel by foreign
    producers is hurting American steel industry severely. What is the
    administration going to do about dumping of steel in the American
    market?
        The President. Well, first of all, let me say there are--my
    judgment, this steel dumping problem--I have to be careful about this--
    the Secretary of Commerce is examining the dumping facts and that's a
    term of legal art, so I shouldn't be characterizing it before he has
    made his actual factual determination. I know of no place in the world,
    however, where steel can be produced at the price that it's been sold in
    the United States in recent months, over the last year, by Japan and
    Russia and, to a lesser extent, by Korea and others.
        The Secretary--the first thing that we're doing is that the
    Secretary of Commerce, Bill Daley, under the law, is responding to the
    American steel companies who have asked for an antidumping determination
    against Japan, Russia, and Brazil. And he is looking into that and he
    will make findings. And if he finds that the legal definition is
    triggered, then he will be able to impose offsetting duties.
        The second thing is what I said in my speech. I went to Tokyo not
    very long ago, you may remember, after--I went to Korea and to Japan,
    along toward the end of last year. And I have made it very clear that
    while I am very sympathetic with Japan's economic problems and I want to
    do everything I can to support the Government there in getting out of
    them, bankrupting the American steel industry--that went through so much
    to become competitive through the 1980's and has already given up a huge
    percentage of its employee base in modernizing--is not my idea of the
    way to achieve it. And quite simply, we expect those with exports from
    Japan in the hot-rolled steel area to return to pre-crisis levels. And
    if they don't and don't do it soon, then we are prepared to go forward
    with this antisurge section 201 action I mentioned, as well as to look
    at antidumping action and other steel products.
        I should tell you that the preliminary indications are that the
    exports have dropped quite a lot in the last month since that message
    was made clear and unambiguous. But I think that's important. I offered,
    yesterday, a tax change in the law on a five-year basis only, to
    increase the loss carry-forward capacity of our steel companies, because
    this is unprecedented, at least in the 6 years I've been President, I've
    never seen anything like this happen to one sector of our economy so
    quickly with such obvious consequences.
        We are also negotiating with the Russians to return to pre-crisis
    levels there and deal with the problem. Again, I'm very sympathetic, the
    Russians need to earn all the money they can. They've had all kinds of
    people taking money out of their economy. And

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    we want a democratic Russia to stay democratic and free and open. But we
    took last year roughly 20 times the hot-rolled steel from Japan, Russia,
    and other countries that Europe did, and their market is 30 percent
    bigger than ours. So I hope none of you will think that I've gone stark-
    raving protectionist by simply trying to enforce our laws and keep a
    fair system here.

    Defense Spending

        Q. Mr. President, you recently proposed boosting the defense by
    about $100 billion over the next 6 fiscal years. What is it that you
    hope to accomplish? And another question was asked, among several--what
    is the policy that you have implemented to attempt to keep so many key
    military men and women from leaving their positions?
        The President. From leaving their positions?
        Q. Aging out or----
        The President. Well, first of all, the military budget peeked in the
    late eighties and has been going down either in absolute terms or
    relative to inflation ever since, until a couple of years ago when we
    stabilized it. We have dramatically reduced the size of our Armed
    Forces. We have dramatically reduced the civilian work force supporting
    those armed forces.
        But we now have downsized our force almost to, I think, the point
    where we shouldn't go lower. We can't go any lower and maintain our
    present military strategy, which among other things, calls upon us to be
    able to fight in two separate regional conflicts at roughly the same
    time and enables us to fulfill our responsibilities from Bosnia, where
    we're keeping the peace and have saved Lord knows how many lives, to
    Central America, where today and for the last several weeks, ever since
    Hurricane Mitch, the worst hurricane in well over a century, devastated
    Central America, you've had several thousand of your fellow Americans in
    uniform who have been down there working every day to help rebuild it.
    And we have people on the seas, people in foreign countries, all over
    the world, on every continent.
        I visited in Africa, when Hillary and I went to Africa this year, I
    visited the young Americans that are part of the Africa Crisis Response
    Initiative, training African soldiers to deal with civil wars and other
    problems there. We are everywhere.
        And what's happening is, as we've downsized the military, the
    following problems have arisen, and you should all be aware of them.
    Number one, the deployments overseas are lasting longer and the breaks
    between them are shorter. Number two, we haven't had the money to
    replace and repair our equipment as rapidly as we should. Number three,
    married people in the military who have families and children and who
    need to live in military housing have not seen any significant
    improvements in their military housing. Number four, we have not done as
    much as we could have done, and as much I think we'll have to do in the
    years ahead, in modernizing the weapons that we have. And as you saw in
    the recent military action in Iraq, where we did a terrific amount of
    damage to the military infrastructure and the weapons of mass
    destruction infrastructure, while causing the deaths, the unintended
    deaths of far, far, fewer civilians than were lost even in the Gulf war
    a few years ago. The technological edge the United States has is very
    important.
        Finally, in certain critical areas, we just can't keep up with
    recruitment. We have a lot of pilots leaving because the airlines are
    doing very well, and they can get jobs making a lot of money working for
    the airline companies. And I don't blame them, but it would bother you
    if you knew I needed the American Air Force and there weren't enough
    people to go fly the planes.
        So when I say we're going to spend $100 billion over 10 years, you
    should know that some of that money is coming out of savings the Defense
    Department has achieved. And when inflation is lower than we thought,
    when fuel costs are lower than we thought, normally they'd have to give
    up that money--we're just letting them have money that they were
    budgeted for anyway. Some of that money will be new money. But we have
    to raise pay, we have to improve living conditions, we have to make sure
    that people are on safe equipment.
        You know, not a single one of those planes that flew in Iraq came
    down, not a single bolt came loose, because people that you will

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    never see worked like crazy, maintaining those planes in tip-top shape
    condition. They should--no American pilot, no man or woman that flies
    those airplanes should ever have to worry about getting into an
    airplane, worrying about whether it's been properly maintained, whether
    the equipment was there and all of these things.
        So that's what this is all about. And we are going to invest some
    more money in modernized equipment. I hope you will support this. I know
    everybody would like to see more money spent everywhere else, but they
    deserve it.

    Nelson Mandela

        Q. Mr. President, we are out of time, but as a presiding officer I
    always attempt to try to reach to our young people who have tried to
    ask--and they do ask some very interesting and challenging questions. I
    close with these two combined, one written by a person who is age 13 and
    the other by the age 12.
        Mr. President, are there horses and a horse barn at the White House?
    If so, could you please send me a picture? And who is the most
    interesting person you have met during your Presidency?
        The President. There are no horses or horse barns in the White
    House. There is a place where Socks and Buddy sleep. However, the
    President can ride horses either in Rock Creek Park or up at Camp David,
    and the National Park Service keeps horses, wonderful horses, which my
    family and I sometimes ride, and if we have friends come spend the
    weekend with us, we can ride. So we do have access to horses, but
    they're not right there on the premises.
        It's very difficult to answer who is the most interesting person
    I've met since I've been President because I meet all different kinds of
    people. For example, some of you know I love music very much, and one of
    the big perks about being President is that if you ask somebody to come
    perform, they'll pretty well do it. [Laughter] So it's been a real kick,
    you know. [Laughter]
        And I've met a lot of very fascinating people in public life. But
    among the most interesting people I've met are the President of China,
    who is a fascinating man; Boris Yeltsin, who is a fascinating man.
    Remember, he got up on a tank alone when they tried to take democracy
    back in Russia, and he said to all the soldiers all around him in the
    threat to take democracy away, ``You may do this, but you'll have to
    kill me first.'' And he was standing on that tank all by himself.
        The late Prime Minister of Israel, Yitzak Rabin, who was
    assassinated by one of his own citizens for working for peace with the
    Arabs, after he'd spent a lifetime protecting the people of Israel in
    uniform.
        But I think among the politicians, the political leaders I've met, I
    could mention many more, but I think the most interesting one I've met,
    for me, for a particular reason, is Nelson Mandela, the President of
    South Africa. And I say that for this reason--to the young people--you
    should think about this the next time something bad happens to you, and
    you get discouraged.
        Bad things happen to kids, you know, people they like don't like
    them; gang members try to push them around, maybe threaten them, maybe
    even hurt them; they make grades that they don't think are as good as
    they ought to be. You know. Disappointments happen in life.
        Nelson Mandela was in prison for 27 years because of his political
    beliefs. And we talked once about it. And he walked out of there with
    enough mental and emotional strength to take all the support that he had
    generated by becoming the symbol of South African freedom and to win in
    a landslide the first free election they had had in 350 years and to do
    it in a way that brought people together across racial and political
    lines instead of driving them apart.
        When I went to South Africa, Nelson Mandela, for example, arranged
    for me to have lunch with legislative leaders. And one of them was the
    leader of the most militant right-wing, white party there who had once
    threatened to restart a civil war if Nelson Mandela got elected
    President. And Mandela sat down and talked to him and convinced him he
    ought to be part of the political system. And then when I came to South
    Africa, instead of having me eat lunch with all of his allies, he had me
    sit down and eat lunch with this fellow.
        I have a minister friend who ran into President Mandela at the
    airport in Johannesburg,

    [[Page 28]]

    and he came up to a little 5-year-old white girl, and he asked the young
    girl if she knew who he was, and the young girl said, ``Yes, you're
    President Mandela. You're my President.'' And he looked at this little
    child now, after all his life, and he said, ``Yes, young lady,'' and he
    said, ``If you study hard in school and you learn a lot about things,
    you, too, could grow up to be President of South Africa.''
        Hillary and Chelsea and I have all become friends of President
    Mandela but also fascinated by how he survived 27 years in prison. There
    was over a decade in which he didn't have a bed in his cell. A dozen
    years of breaking rocks, an experience which cost him seeing his
    children grow up, ultimately cost him his marriage and subjected him to
    all sorts of physical and emotional abuse. And he walked out of prison,
    got elected President, invited his jailers to his inauguration.
        So I asked him one day, I said, ``How did you do this?'' I said,
    ``How did you go without hating them?'' And he said, ``Well, you know, I
    did hate them for a long time, about 12 years.'' And he said, ``One day
    I was out there breaking rocks in prison, and I thought, look what
    they've taken away from me. They've taken the best years of my life. I
    can't see my kids grow up. They brutalized me. They can take everything.
    They can take everything from me but my mind and my heart. Now, those
    things I will have to give to them. I don't think I will give them
    away.'' You think about that--I don't think I will give them away.
        The morning Nelson Mandela got out of prison, it was an early Sunday
    morning in America, in the Central Time Zone. And I got my daughter up,
    and I took her down to the kitchen and turned the television on and sat
    her up on the counter--she was a little girl--and I said, ``I want you
    to watch this. This is one of the most important things you'll ever
    see.'' And some of you remember when Mandela took that last long walk to
    freedom, when he was coming out of the prison.
        So I asked him, I said, ``Now, when you took that last walk, tell me
    the truth, didn't you hate them again?'' He said, ``Yes, I started to.''
    And he said, ``I was also scared because I hadn't been free in a long
    time. I was actually scared. And I was filled with anger. And then I
    thought to myself, when I become free, I want to be free. If I still
    hate them, I won't be free. They've had enough of my time. I'm not
    giving them any more, not another day.''
        This is a very long answer to a child's question, but it's an
    important answer. That's why he's the most interesting person I've met
    because I don't know another human being that suffered so much for so
    long and came out so much stronger and richer and deeper than he went
    into his period of suffering.
        And so I ask the children here and the parents here to think about
    it when times get tough. And I ask America to think about it when we
    have all these racial and religious and political divisions that we
    think are so big--we spend all of our time trying to solve the problems
    in Northern Ireland, the Middle East, and other places in the world.
    None of the people--practically none of the people that are involved in
    any of this stuff around the world and nobody here in America has ever
    been through anything--anything--like what he went through.
        And so when we call for a spirit of reconciliation and unity and
    community and mutual respect in America, we ought to think about Nelson
    Mandela. If it was good for him, it would sure be good for us.
        Thank you, and bless you all.

    Note: The President spoke at 12:48 p.m. at the Cobo Conference Center.
    In his remarks, he referred to Mayor Dennis W. Archer of Detroit; Wayne
    County Executive Edward H. McNamara; former Governor and former
    Ambassador to Canada James J. Blanchard; Representative John D.
    Dingell's wife, Debbie; Representative John Conyers, Jr.'s son, John
    Conyers III; Representative Sander M. Levin's wife, Vicki;
    Representative Bart Stupak's wife, Laurie; civil rights leader Rev.
    Jesse Jackson; President Jiang Zemin of China; and President Boris
    Yeltsin of Russia.

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