[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

[[Page 26]]

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,

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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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