[Weekly Compilation of Presidential Documents Volume 35, Number 31 (Monday, August 9, 1999)]
[Pages 1568-1572]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
Remarks on Departure for Little Rock, Arkansas, and an Exchange With 
Reporters

August 6, 1999

Drought/National Economy

    The President. Good morning. Before I leave to go home to Arkansas, 
I want to comment briefly on two matters.
    First, I want to talk about the action we're taking to address the 
terrible, crippling drought that continues to grip so much of our 
Nation. Throughout much of this country, we have seen the worst drought 
since the Dust Bowl days. And as the National

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Oceanographic and Atmospheric Administration will formally announce 
later today, in Maryland, Delaware, New Jersey, and Rhode Island, this 
is the worst drought for farmers ever recorded.
    Such a natural calamity can have devastating consequences, not only 
for farmers but for small businesses and communities that depend upon a 
thriving agricultural sector and for the electric power systems so vital 
to our Nation. We're worked hard to help the victims of the drought and 
the heat wave. But as weather disruptions become even more common, and 
they will, they will demand a more coordinated response by the National 
Government. So today I'm directing that the White House immediately 
convene a task force of the relevant cabinet agencies to coordinate our 
efforts and focus our attack on this problem. We must do more. It is our 
duty as a national community.
    Second, I want to talk a little more about our efforts to continue 
our prosperity for all Americans. For 6\1/2\ years now, we have pursued 
a different economic strategy from the previous 12 years; one based on 
fiscal discipline, investing in our people, selling our products around 
the world. It has produced sustained prosperity, the longest peacetime 
expansion in history. Now, it has also produced an era of surpluses 
after 12 years in which we quadrupled the national debt. This is 
working. Today we received more evidence.
    Just this morning it was announced that America's remarkably low 
unemployment rate remains at a remarkably low rate of 4.3 percent, that 
inflation is low, and that last month alone, over 300,000 new jobs were 
created in America. This brings the total since January 1993 when I took 
office to 19.2 million new jobs.
    We should not abandon a strategy that is working, especially since 
now we are beginning an era of surpluses which will enable us to meet 
our big, long-term challenges for the 21st century, the aging of 
America, the education of our children, sustaining our long-term 
economic growth. Therefore I am disappointed, though not surprised, that 
the majority party in Congress has chosen to pass its massive tax cut; 
one that plainly would damage our economic future and make it impossible 
to secure and modernize Medicare. But again, I want to assure the 
American people--because this tax cut will not save and strengthen 
Medicare, because it will not add a day to the Social Security Trust 
Fund, because it will not pay down the debt and pay it off for the first 
time in over 150 years--this tax cut will not become law.
    This morning it was reported in the press that the Republican 
leadership has revealed that actually they have the secret strategy even 
to spend the Social Security surplus. They very explicitly want to raid 
the Social Security surplus to pay for huge economic--huge tax cuts and 
a risky economic scheme. They say they're spending more money now to 
force that result. Now, that's the sort of thing they did before that 
got us in trouble and gave us an average unemployment rate that was too 
high and a growth rate that was too low and huge, huge deficits.
    This really troubles me because for the last 2 years they have 
promised the American people they would work with us to save Social 
Security first. I can think of nothing more cynical and irresponsible. 
My strategy is still the same. Let's do first things first. Let's save 
Social Security, save and strengthen Medicare, pay off the national debt 
for the first time since 1835, figure out what we have to invest in the 
education of our children and in the national defense and preserving the 
environment and our essential mission, and then give the rest of the 
money back to the American people in a tax cut.
    We can have a tax cut, but it is wrong to put the cart before the 
horse. It is wrong to plan the vacation before we pay the home mortgage 
and send the kids to college. That's what they're proposing to do. It is 
wrong. It will take us right back to the situation that got us in so 
much trouble in the 1980's, and I will not countenance it. But we can 
make progress.
    Just today there was a report that, led by the Republican physicians 
in the House of Representatives, enough Republicans have joined the 
Democrats to guarantee that the House will pass a strong Patients' Bill 
of Rights. This is the sort of thing we can do if we work across party 
lines, as we did with welfare reform, as we did in the Balanced Budget 
Act of 1997. We can do something

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that would have seemed impossible just a few years ago. We can pay off 
the national debt, keep interest rates low, and give our children a 
healthy economy for a generation. We can save Social Security. We can 
save and strengthen Medicare with preventive benefits and the 
prescription drug. We can do these things. We can invest in our 
children's future. We can use this historic opportunity of a lifetime to 
do our duty by the next generation.
    This is not a time to walk away from that duty, and again I implore 
the Members of the Republican majority to come up with their own 
Medicare plan, sit down with me and talk about it, figure out what we 
have to spend and invest, and then we can give the rest back to the 
American people in a tax cut. But we have to do first things first.
    I will not--I will not see, after 6\1/2\ years of progress, us 
return to the problems that we faced in the years before I took office. 
We're not going to do it. It is not right. We should be looking to the 
21st century and facing the challenges and doing right by our children. 
And that's exactly what I intend to do.

Drought Relief and Farm Aid

    Q. Mr. President, on this Federal drought task force, sir--on this 
Federal drought task force, sir, what specifically do you have in mind? 
What could the Federal Government do that it's not doing now? And how do 
you respond to critics who say you haven't pushed hard enough for 
drought relief now for drought-stricken farmers?
    The President. Well, I think that there should be more drought 
relief in the agricultural efforts. I believe we have to go back and--
before the farm bill comes to me--the emergency farm bill that is 
working its way through Congress is designed largely to deal with the 
problems of the last 4 years--record-high world crops, the collapse of 
the markets in Asia, the collapse of the prices. And that's important 
because that deals with what all the farmers do off the East Coast. But 
if you look at what they're facing here, there needs to be a special 
provision to deal with the drought crisis. And I hope that, and believe 
that, there will be.
    So, I wish we could have done it before the August recess, but I 
think it will be there in time to aid the farmers. I don't believe that 
this Congress will walk away without doing something to deal with the 
emergency problem caused by the drought. I'm going to be with James Lee 
Witt in Arkansas tonight. We're both going to be home, and I expect to 
have a discussion with him about it--about what we should do.
    Yes, go ahead.
    Q. And what about the task force?

Nomination of Roger W. Ferguson, Jr.

    Q. What about Roger Ferguson? We understand that you're going to 
appoint him today to the Fed?
    The President. I am. He will be the first African-American Vice 
Chair of the Fed. He is superbly qualified. He has served well. And I am 
very excited about the prospect of his service. I'm glad he's willing to 
do it.

Tax Cut

    Q. Mr. President, you've made a point of saying that the only way of 
strengthening Medicare and meeting your priorities would be to have a 
tax cut in the $300 billion range. Are you saying that the Republicans 
have to come down to that range? And if so, if it were to include an 
across-the-board tax cut or components that you don't philosophically 
agree with, would you be willing to entertain those as long as it's in 
the $300 billion parameters?
    The President. No. Let me back up and say first of all, the most 
important thing to me is that Congress engage in the same exercise I did 
and that I believe the Democrats on the Senate Finance Committee and the 
House Ways and Means Committee tried to do, which is to say, what do we 
believe it will take to secure Medicare, provide a modest prescription 
drug benefit, these preventive changes, and all the modernization and 
competition things that I think we all agree need to be done--what will 
it take to do that?
    What does the Congress--even the Republicans are up there spending a 
lot of money--what about the money they're going to spend over and above 
the '97 balanced budget limits for education, for medical research, for 
the teaching hospitals, the inner-

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city hospitals, the therapeutic services? What about the veterans? Have 
they decided--what do they want to spend for defense? And we have to 
protect Social Security.
    Now after we do all that, then they ought to ask themselves what 
their revenue estimates--or whatever revenue estimates they intend to 
use--what is left? And then that is how we ought to determine the size 
of the tax cut. We're doing this backwards. So you have this curious 
situation where the majority party is both passing a big tax cut, and 
passing big spending bills without any sense of how this is going to be 
reconciled. So to me, the most important thing is that we engage in the 
same process, that we put first things first.
    Now, if we can agree on an amount, do I have to be flexible on how 
it's done? Of course I do; they have more votes than we do. Even the 
Democrats in Congress had a different plan than I did, and I thought 
they had some good ideas. The most important thing is that we engage in 
a process that saves Social Security and Medicare, that pays the debt 
off, and that continues to invest in education, defense, and the things 
we have to invest in. Then I think we ought to give whatever's left back 
to the American people in a tax cut. I obviously will argue for the 
fairest possible way.
    I mean, if you look at the tax cut they adopted, the top one percent 
get 25 percent, the bottom 81 percent get 25 percent. So I think that, 
you know, 75 percent of the benefits go to the top 20 percent of the 
people. I think that there are problems with it, but I'm--clearly we'd 
have to negotiate the content, the details. But the amount should be 
determined not by politics but by arithmetic and by what we agree on in 
Medicare and the investments we agree to make in our country's future 
and our education and defense and the environment and by what we have to 
spend for the agriculture, for the veterans, for the problems that are 
now out there with the teaching hospitals, the inner-city hospitals--the 
therapy services have been cancelled, those kinds of things. We need to 
find out what we are going to do and what we have to do and what is 
right for the long-term interest of America, and then we can have the 
short-term tax cut.
    And let me just make one other point about that, as we celebrate 
300,000 more jobs and finally breaking the 19 million job barrier. We 
have seen warning after warning after warning in the business press in 
the last 2 weeks that a big tax cut in the face of this growing economy 
would be viewed as an inflationary measure which would cause the markets 
to raise interest rates, which would turn right around and take the 
benefits away from ordinary Americans that they get from tax cuts. If 
you get a tax cut today and the tax cut causes higher home mortgage 
rates, higher car payment rates, higher interest--credit card rates, 
higher college loan rates, and a weaker economy, then it won't take long 
for that tax cut to disappear in the flash of an eye. And that's another 
thing that ought to be considered here.

Inflation and Interest Rates/Fed Chairman Alan Greenspan

    Q. Mr. President, regardless of the tax cut debate, the unemployment 
report today was only the latest in a series this week that have raised 
concerns about inflation. Would a small increase in interest rates now 
be an understandable response to that? And secondly, have you made any 
decisions on Chairman Greenspan and another term at the Fed?
    The President. Well, first of all, I think he has done a terrific 
job, and they will make their own judgments. But what I am doing is 
designed--he testified in the Congress along these lines. Now I'm very 
gratified that the actual inflation rate is not high. It is true that 
we're finally getting some wage increases the last 2\1/2\ to 3 years for 
ordinary people, and they're getting ahead again after 20 years of 
falling behind. And I think that's good. But we--what--we should do 
everything we can--those of us with political responsibilities in the 
Government, to fight inflationary pressures so we continue to create 
jobs and raise incomes without inflation which will certainly raise 
interest rates. The market will raise them, whatever the Fed does, if we 
really have big inflation come back into the economy.
    So I'm doing my best to hold inflation down. And that's the signal 
that I want to send today. I never comment on the interest

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rate decisions of the Fed, and I don't want to start now. I think that 
we have had an independent policy, but our policies have reinforced one 
another, which is to have growth and jobs without inflation. And that's 
what I think we should do.
    Thank you very much.

End of Fiscal Year

    Q. The end of the fiscal year is just 2 months away. Do you think 
we'll have a train wreck, sir?
    The President. No.

Note: The President spoke at 9:50 a.m. on the South Lawn at the White 
House. A portion of these remarks could not be verified because the tape 
was incomplete.