[Weekly Compilation of Presidential Documents Volume 35, Number 31 (Monday, August 9, 1999)]
[Pages 1553-1556]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
Remarks on Reduction of the National Debt and an Exchange 
With Reporters

August 4, 1999

    The President. Good afternoon. I've just had a meeting with the 
members of my economic team, and I'd like to talk a few moments about 
the course we have decided to chart for the future.
     Seven years ago when I ran for President, I said we had to put our 
fiscal house in order, to start living within our means. Most Americans 
agreed, but few believed we would do it. Irresponsible policies in 
Washington had piled deficits upon deficits and quadrupled our national 
debt in the 12 years before I took office. As a result, interest and 
unemployment rates were high, and growth was low.
     In 1993 Vice President Gore and I took office determined to change 
our course, to follow a new economic strategy founded on fiscal 
discipline, investment in our people, and expanded trade. Today the 
success of that strategy is very much in evidence. We have balanced the 
budget, turned a deficit of $290 billion into a surplus of $99 billion, 
the largest ever. Since 1993, our economy has produced almost 19 million 
new jobs, wages and homeownership are high, inflation and unemployment 
the lowest in a generation.
     America has come a long way in the last 7 years, from recession to 
recovery, from economic disorder to a fiscal house finally in order. We 
have even begun to pay down our debt. Just this week, our administration 
announced that the Federal Government will pay down more than $87 
billion this year alone, the largest reduction in our Nation's history. 
Over the last 2 years, we've paid down over $142 billion.
     The debt held by the public is now $1.7 trillion--that's $1.7 
trillion--less than it was projected to be when I took office.
     Furthermore, I have proposed a balanced budget that would actually 
eliminate the debt by 2015. By putting first things first, by saving 
Social Security and strengthening Medicare, our Nation can actually 
become debt-free for the first time since 1835, when Andrew Jackson was 
President.
     Today the Treasury Department has proposed new steps to further our 
progress. Secretary Summers discussed them earlier today, but I just 
want to summarize. These proposals would help us to manage Federal 
finances in a new era of budget surpluses. They would give the 
Government the same kind of tools, the same flexibility that families 
and companies have in managing their finances. They would, in effect, 
allow us to refinance old debt and pay it down on the best terms 
possible, saving taxpayers billions of dollars in the process.
     If past policies brought a vicious cycle of budget deficits and 
high interest rates, our new economic strategy drives a virtuous cycle 
of budget surpluses and low interest rates. We know what paying down the 
debt means for America's families. It is the equivalent to a tax cut 
worth hundreds, even thousands of dollars to them in lower interest 
costs. Smaller debt brings lower interest rates. When interest rates 
fall, more families can afford a home or a car or a college education 
for their children; more businesses borrow more to invest, boosting 
productivity and creating more jobs.
     In the past 7 years, we've balanced Washington's books; we've cut 
its credit card balance. Now let's refinance our Nation's mortgage and 
then wipe the ledger clean. Paying down the debt creates wealth, creates 
jobs, creates opportunity. It's the right and responsible thing to do, 
and we have the chance of a lifetime to do it.
     If we're to make the most of this prosperity, we simply have to put 
first things first. We should maintain our fiscal discipline by 
investing the bulk of the surplus to pay down the debt, save Social 
Security, strengthen Medicare and modernize it with a long-term--long 
overdue prescription drug benefit. We should honor our values by 
honoring our commitment to educate our children, protect our 
environment, strengthen our defense, and fight crime. And we should move 
forward with an economic strategy that is successful and sound, not 
revert to one that is a proven failure.
    On Capitol Hill, Members of the majority have been at work on a tax 
plan that is risky and plainly wrong for America. Let me repeat what I 
have said many times: If they

[[Page 1554]]

conclude this plan and send it to me, I will have to veto it. I will 
refuse to sign any plan that signs away our commitment to America's 
future, to Social Security, to Medicare, to paying down the debt. We can 
do these things and still have a sensible tax plan, and I remain 
committed to work with any Members of Congress, from both parties, to 
achieve that goal.
    Thank you.

Tax Cut Legislation

    Q. Mr. President, do you believe you can reach an agreement with 
Republicans later in the year on taxes, and is $300 billion the most you 
would be willing to allow for a tax cut?
    The President. Well, I hope we can reach an agreement. And let me 
suggest that the way to proceed--and I think that the only way we can 
reach an agreement is if they would do what I have tried to do. I think 
first they ought to produce their own Medicare plan that lengthens the 
life of the Trust Fund and provides a modest prescription drug benefit. 
Then of course, they have to calculate how much more money they want to 
spend over and above the caps. And they have to figure out what's left, 
and whether they agree with me that we should pay off the debt.
    We could certainly do this. I want all of you to understand, for me 
this is not a political issue; this is a matter of basic arithmetic. We 
returned to basic arithmetic in 1993, and it has served us well. Gene 
Sperling once said that to pass the big tax cut first, without knowing 
how you're going to meet your responsibilities, is like a family saying, 
``Let's take the vacation of our dreams, and when we get home, we'll try 
to decide if we can pay the home mortgage and send the kids to 
college.'' I think that the order of this is wrong.
    So I think if they would have a very clear idea of what their 
Medicare proposal would be and what the impact of their proposed 
increases in expenditures would be, then I think we'd be able to make an 
agreement. And I'm willing to work for it, and hope we can achieve it.
    Q. Mr. President, by the time Congress comes back from its recess, 
it will be a little more than a year towards the 2000 election. What is 
to make this--what is to possibly keep this from becoming a political 
issue, if it isn't already?
    The President. Every issue in Washington, I suppose, is a political 
issue. The point I'm trying to make is, if we want to save Social 
Security and Medicare and pay the debt off, then you have to figure out 
how much money you have left and how much money the Congress is 
determined to spend over and above the present budget caps, and you can 
spend what is left on the tax cut.
    But to pass a tax cut first and then say, well, I'm sorry, we can't 
really save Social Security and we're not going to lengthen the life of 
the Trust Fund, or, I'm sorry we're not going to lengthen the life of 
the Medicare Trust Fund a day--neither one a day under their proposal--
and we may or may not be able to spend money on education and national 
defense and, if we do, we'll go back into deficit spending again--I 
don't think we want to get into that.
    So I'm saying--you asked me, can we achieve this? Of course we can. 
Remember, in 1996, in an election year, we passed welfare reform with 
overwhelming majorities of both parties in both Houses. And yesterday we 
celebrated cutting the rolls in half. And 12,000 companies are helping 
us to hire people off welfare. So we can do this. We can do this.
    We were never going to be able to do it, I might add, unless we had 
big majorities of both parties in both Houses. It is in our interest, if 
you want to talk about it in that way, to do the people's work here, to 
do it this year and to do it next year. And I think it's terribly 
important, so I hope we'll do it.

Social Security Reform Plan/Talk Magazine Interview

    Q. Mr. President, why haven't you submitted a plan to reform Social 
Security? And secondly, sir, would you also comment for us on the First 
Lady's interview with Talk magazine and clarify for us, if you will, 
what she meant in saying that you were scarred by abuse and that's 
affected your behavior?
    The President. Well--what was the first part of that question? 
[Laughter] I'll answer the second part. What's the first part?

[[Page 1555]]

    Q. The first part was why haven't you submitted a plan to reform 
Social Security yet.
    The President. Well, I am working on that, and I have been talking 
to Chairman Archer about it, and I would be prepared to do that. But 
keep in mind, that is not what is holding this up, because we both agree 
on what we have to do with the surplus. That is, we both agree--and 
let's not lose sight of the fact that we've actually reached one 
agreement here; we both agreed to keep the Social Security portion of 
the surplus apart from regular Government spending.
    My plan, however, is more detailed than theirs in the sense that I 
also propose to take the savings that we receive in 5 years of this 15-
year period on the debt reduction and put that back into the Trust Fund 
to lengthen the life to 2053. If Congress wished me to do that and that 
would help to get this agreement--I've been working very hard on this, 
and I would be prepared to do that.
    Now, let me just say on the other thing, I think anybody who read 
that article would draw two conclusions. You can draw a thousand 
conclusions, but I think there are two conclusions that anyone would 
have to draw, amid all the differences they might have in the way they 
read the piece. One is that my wife is an extraordinary person with a 
passionate commitment to public service and a genuine record of 
important achievement. And the second is that we love each other very, 
very much. And I think those are the two important things.
    Now, I don't believe that anybody could fairly read the article and 
think that she was making any excuses for me. I haven't made any excuses 
for what was inexcusable, and neither has she, believe me. And as to my 
childhood, everybody knows that's looked into it I didn't have a bed of 
roses as a kid. But I can tell you this, as I think about other children 
in the world and in our country that have difficulties growing up, I am 
convinced from my own life and from my research and from my experience 
with other children, the most important thing is that every child needs 
to know growing up that he or she is the most important person in the 
world to someone. And I knew that, so--I knew that. And I have no 
complaints.
    Helen [Helen Thomas, United Press International], happy birthday. 
[Laughter]
    Ms. Thomas. Thank you. Thank you, Mr. President.
    Q. Mr. President, the First Lady has indicated that the trauma of 
this was to the degree that you can't even take it out and look at it 
anymore. Are you trying to work through the issues and look back over 
that time of your life?
    The President. Look, I think that I have said all I need to say 
about that. I have--I think every reflective person thinks about his or 
her life, but what I conclude about my childhood is what I said. It had 
its really tough moments, but I always knew I was well loved. And I 
think that's important for all of our children.

Japanese Economy

    Q. Mr. President, are you going to call the Prime Minister of Japan 
to discuss the fluctuations in the currency market? And how concerned 
are you that they're more interested in market manipulation and 
intervention than in stimulating domestic demand-led growth, which 
Secretary Summers and Secretary Rubin have advocated ad nauseam?
    The President. The first--Japan, how concerned I am about Japan? I 
think, first of all, in the last 6\1/2\ years, we've seen the currency 
fluctuations. They go up; they go down. I don't have anything to comment 
about that.
    I think that we do see some signs that Japan's economy is beginning 
to grow and that Prime Minister Obuchi has formed a coherent and strong 
and effective government and has secured the necessary support from the 
Japanese people to continue to move forward.
    So we will continue to consult with Japan about what we think is 
important for their economic recovery, as we should because they're our 
partners and they're our friends and our allies and their recovery is 
critical to Asia's recovery. But I basically believe that the trends are 
positive there, and so I have a positive view.
    Thank you.

Note: The President spoke at 12:15 p.m. in the Rose Garden at the White 
House. In his remarks,

[[Page 1556]]

he referred to Prime Minister Keizo Obuchi of Japan.