Weekly Compilation of Presidential Documents Volume 35 Issue 1 (Monday, January 11, 1999)

[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

[[Page 23]]

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

[[Page 27]]

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.

[[Page 29]]