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Public Papers - 1990 - October

Remarks and a Question-and-Answer Session With Regional Newspaper Editors

1990-10-03

The President. Well, thank you all very much, and welcome to the White House. I've asked Dick Darman and Secretary Brady to be with us, though I know they've responded to many of your questions. And I want to take this opportunity to thank them and also Governor Sununu. These were our three top negotiators. They lived through every agonizing minute of the discussions that led up to an agreement that I am strongly recommending to this country.

And so, last night you heard me suggest that passing a bipartisan budget agreement is absolutely essential for this country. We have a lot of people telling us: If you could only get this provision or that provision it would be a better deal. And I would readily concede that, from my standpoint, the things I believe, I could craft a better deal. But I'm convinced that at this juncture I can't craft a better deal that can have the approval of both sides of the aisle in the Congress. And there comes a time when you have to simply make tough decisions, give a little to get what is best for the country. And what is best for the country now is a solid budget agreement. And it's a good deal. I think it's balanced. I think it's fair. I think the burden is spread, and the agreement delivers the biggest deficit cuts ever. We're talking about, in 5 years, half a trillion dollars.

I am convinced -- and some of this is highly technical -- but that the enforcement provisions are good; and Dick Darman, I'm sure, has discussed that with you, and Nick Brady as well. But there was quite a bit of concession in order to get enforcement provision. The entitlement savings -- 120 billion between now and '95 -- they're real. I know plenty of people are going to say: Well, we've heard all this before. I know the American people are going to say: Well, we heard this before in other deals. But again, these are the toughest enforcement mechanisms ever -- some of the most skeptical Members of Congress I think recognizing that now. So, for every new program or added expenditure, the enforcement says you've got to make up for it somewhere else. And if at some time in the future the old bad habits get the upper hand and the urge to overspend returns, there's a surprise in store: automatic cuts kick in to bring the budget back into line.

So, everyone knows that this is a product of 8 long months of difficult negotiation and compromise. And no one was in a position to dictate the terms, and no one got everything that he or she wanted. But the plan again that was hammered out in my view is balanced; it is fair; and frankly, it is our last, best chance to try to get this Federal deficit under control. I said last night to the cynics and the critics -- and there are plenty of them around -- you can pick this package apart, but you cannot put a better package together that can pass both Houses in the Congress.

Tomorrow, Congress meets. So, today I strongly urge and call upon the Congress, both House and Senate, to cast their vote for this plan and to prove to the American people that we can solve problems, that we can go out and get something done and put this nation back on the path to long-term economic growth.

So, with no further ado, I'll be glad to take a few questions. This is going to be difficult.

Federal Budget Agreement

Q. Mr. President, Larry Lipman, of the Palm Beach Post. You say that this package is balanced and it's fair, yet half of the entitlement comes from cuts in Medicare. How can you say that that is fair to the elderly?

The President. A lot of it comes in constraints on defense spending. We're trying to contain the growth of medical care. We do not feel that these cuts are onerous to the elderly. I would ask them to look at options, look at what did not happen. The biggest part of the expenditures in the Federal budget are due to entitlements, generally. You have Social Security. And we did not mess with Social Security; we protected Social Security. Some of it is what is being done, and I think that's fair, and some of it is what didn't happen, and we tried to be very fair there. But to get the deficit down, you have to deal with where the major growth in spending is; it's just that clear, unless they want to support extraordinarily higher income taxes. Another thing that's not in this budget is increasing income tax rates.

Q. I'm Tom Smith, from the Bonneville News. You just stated a second ago that this is the last and best effort to get the deficit under control. The emphasis so far has been on this end of the 5-year package. Let me ask about the other end. Will there be a pay-as-you-go budget format for the Government at that time? And if Americans are asked to bite the bullet now to see this package pass, what benefits will they enjoy at the end of the 5-year period?

The President. The major benefit will be a more vigorous economy. Major benefit is, I think, short-run, staving off economic catastrophe. The Secretary of Treasury pointed out to us yesterday that billion failed to come into the markets from abroad on financing this incredible debt that is mortgaging the future of our kids. So, we think we've got that now moving in the right direction, and therein lies the benefits: a vigorous economy.

You know, even after TEFRA [Tax Equity and Fiscal Reform Act] -- which was a flawed deal because it had so much more on the revenue side and less on the spending side -- even after that deal was passed, interest rates came down, short-run, real fast.

I'm inclined to feel that -- just from a lot of talks up in New York recently, as well as my own conviction -- that the people are looking at us and wondering: Can we get this deficit under control? And I think if we get it under control we send a signal to world markets that is very encouraging. And that stimulates the economic growth that is projected in these 5-year projections. And it's real, and it'll happen. But if we linger along and don't get a deal, I'll tell you, we are courting disaster in this country.

Q. What does deficit reduction under control mean? Does it mean -- --

The President. It means getting down to a balanced budget. That's what it means -- longer run. And I think Nick can give -- I don't know if you -- how many years that takes, but that's what we're courting. We don't want to spend more than we take in. I tried to make that one clear last night.

Sarah [Sarah McClendon, McClendon News]?

Q. Thank you, sir.

The President. I'm in for trouble.

Q. It looks like with this great gasoline tax that you're going to have a total tax, ultimately, on a gallon of gas that's 21 cents?

The President. Sarah -- --

Q. That's going to keep a lot of men who have to drive a long distance to jobs -- that's going to make a lot of people be out of jobs, doesn't it?

The President. I don't think it'll be out of jobs. What will get them out of jobs is if we don't get this deficit under control and this economy goes into recession. That's what'll get them out of jobs. I don't think that that particular proposed tax is overly onerous.

You're talking to a guy that doesn't want to do anything about taxes at all. I mean, I can't get enthusiastic about a tax on the American people, nor can I get enthusiastic about the relentless spending that is going on. We are not dealing with the best of all worlds. We're trying to solve an enormous problem. So, I think the tax is fair. I think when you look around at world prices on gasoline -- I mean, we're still substantially below world markets. So, I would simply say that it is a tax that everybody has to pick up, as I said last night, some share of the burden. And that's where it hits. And I hope that also in this case we can have these incentives passed that will make us less dependent on foreign oil. I keep making that pitch.

Energy Policy

Q. Is that your energy policy?

The President. No, we've got an overall energy policy. I might make a pitch for part of it now. I think, you know, we've gotten to a phase in nuclear policy that it's almost impossible to go forward with that clean fuel. We're talking about alternate -- more use of natural gas. We're talking about clean coal technology. We're talking about all kinds of planks that fit into a national energy policy. But, yes, that's part of it -- is less dependence on foreign oil by more hydrocarbon production in this country.

Q. Mr. President, I'm David Lightman, from the Hartford Courant. Do you agree that the 2-cent tax on petroleum products should also be a tax on home heating oil?

The President. Well, I'd like to ask Dick to tell you about the debate on home heating oil because -- [laughter] -- it's highly technical. And nobody is without pain here. Nothing is without pain. You're talking about a small incident here. You're talking about, as Sarah was saying, those who drive the most -- and that's out West -- picking up what some would say is an unfair share of the burden. There's nothing that is without pain. I'll tell you what is without pain. I mean, I'll tell you what does concern me is a lot of people around this country say: No drilling; we don't want to have any drilling here. Don't want to have any refineries. Don't want to go with nuclear power. But please send me plenty of energy. It doesn't work that way anymore. So, now we've got to have a policy that expands the uses of alternate sources of energy, and thus hopefully will bring the price down.

Incidentally, I -- you know, this gets you off into the Middle East, but some are pointing out to the fact that we've got some dangers there, and I think they are correct. We're not there simply because of the oil fields in Saudi Arabia and the GCC countries. We're there for a fundamental principle about aggression. But the world is fairly small; and our fortunes, when we are becoming 50 percent dependent on other countries, are linked to our success in that part of the world, which will impact directly on fuel -- home heating oil or on the price of gasoline.

Q. Mr. President -- --

The President. One, two.

Economic Policy

Q. I'm James Brosnan, with the Memphis Commercial Appeal. You claim that your package will spur economic development in the poorest regions of the country: the inner cities and the rural areas, like the Mississippi Delta. And if not, would you favor targeting assistance to some of those areas?

The President. I favor bringing interest rates down, which will indeed help those areas. And that is the biggest thing you can do is to have an economy where people are willing to start new businesses, to employ people, to keep economic growth going, and to keep this country -- falling into recession. That policy alone will benefit the people who are hardest hit in this country.

Presidential Crisis

Q. Mr. President, Tom Brazaitis, from the Cleveland Plain Dealer. This morning's New York Times has a headline on the front page that says: ``A Presidency on the Line.'' And with an oil crisis and a hostage crisis and a budget crisis, some people are making comparisons to former President Carter. How do you respond to that? [Laughter]

The President. Look, nobody said it would be easy. [Laughter] And we're getting good support for our policy in the Middle East. Incidentally, I was -- overwhelming -- the support at the United Nations when I was up there was just so apparent and very, very good. But every once in a while, the going gets a little tough. And I'm pleased that we have been able to hammer out a bipartisan agreement to get over an enormous problem that has been growing for years, and that is the Government simply spending more than it takes in and the ever-increasing deficits. And so, put it this way: I don't feel embattled at all. I don't feel embattled.

Q. Is your Presidency on the line?

The President. I don't know what that means. Please refine it, and I'll -- --

Q. It means it's a make-or-break period in your tenure as President.

The President. Put it this way: It's, I guess, about as complicated as a period as we've had since I've been President. But I'm not looking at it in terms of reelection or -- I mean, I think there were some connotations in one story I saw -- maybe it wasn't the same one -- about all of that. The American people are entitled to something a little bit more broader gauged than that. I haven't thought about it in those terms.

But I look back over my shoulder at some of the challenges we've had and some of the comments that we're not doing something properly. I try not to sound egotistical, but we've been right on German unification. And yet, I remember many people saying: It's impossible; the Soviets aren't going to permit a unified Germany to be in NATO. It isn't going to happen. You can't have a unified Germany before you have two peace treaties with Poland.

The reason this is on my mind is I just called -- in the middle of a hard-sell session to Members of the Congress -- Helmut Kohl [Chancellor of Germany]. I was very moved when I saw what happened at the Brandenburg Gate and the feeling there, and I just felt I had to call him on this very special day to congratulate him. But that brought back to mind some -- somewhat -- I wouldn't say difficult time in my Presidency, but questioning whether our objective and the German objective could be fulfilled. So, there are difficult times along the way.

We've got two big things coming together now. One is the deficit, and one is this crisis halfway around the world. But I'm telling you honestly, I don't look at it in terms of whether it's good for a Bush Presidency or popular politically. And that's why last night I tried to give cover to Members of Congress, Democrat and Republican, and say: You don't have to support crossing every t and dotting every i, but say the President encouraged you to do it. Blame me. Because I know what's best for our country, but I don't suspect it's politically popular.

Federal Budget Agreement

Q. Mr. President, I'm Bobbie Ulrich, the Oregonian. Will future campaign visits by yourself and members of your Cabinet be affected by how Republican Members in the House or Senate vote on this package?

The President. I'm going to use every means at my disposal to convince Republicans and Democrats that they ought to vote for this. But I can't tell you that I will change the rhetorical output or the number of campaign stops if somebody is not with me on a specific issue.

We've been able to hold the line on vetoes. The only way we've been able to make good things happen is because of vetoing lousy legislation. Sometimes we lose Republican votes on vetoes that are very important to me, and I get the same question. But I'm approaching this with no rancor in my heart, but trying at this juncture to use every weapon in my arsenal to get people to do it our way. But I'm not going to go into that or suggest that I would do that.

I must say, sometimes you neglect your friends, and I don't want to do that anymore. But I don't have any plans to do what your question properly asks about.

Q. Mr. President, Alice Lipowich, from the Bridgeport Post. For the Northeast region, which is one of the first regions to be experiencing a real estate slump and the beginnings of a recession, how can you explain that the combination of defense cuts, higher taxes on gasoline, and the home heating oil tax won't hurt that economy more?

The President. I'm not sure there won't be any adverse effects by one provision or another. I am totally sure that failure to get a deficit deal will adversely affect every region of the country.

Q. Mr. President, this is the biggest solution to the debt problems in the 10 years that we're been living with it, but the problem is growing even faster than the solutions. Could you explain why you think that this first billion in the first year will avert a financial catastrophe, as you saw it?

The President. Because I think what it'll do is send a signal to the international markets that this is serious. And you say for the first time I'd be glad to -- I think, given the enforcement provisions, I accept your hypothesis. I think what it'll do is send a signal not only to the international financial markets but to the domestic financial markets that this is serious business and that 0 billion of reductions over this period of 5 years is the medicine that a sluggish economy needs to go forward to have more growth.

I go back and -- we did some research -- and you go back and look at the political rhetoric on both sides of the aisle at the time of the TEFRA, which was in the Reagan-Bush administration. That was not a very popular piece of legislation. It didn't have the enforcement provisions here. The spending cuts were not solidified. And yet on that one, right after TEFRA was passed the interest rates started down, and within 4 months they were down by about 3 points. Admittedly, they were reasonably high because, you remember, that period was a recession period. But we're in a sluggish economy -- I don't want to say recession here -- and I think the best answer is this kind of formulation where each Congressman has to give a little bit. Nobody gets it just the way he wants or campaigned; certainly, that's true for a President. But the best answer to these regional questions -- I mean, to your question -- is the fact that the world markets will see that we're serious about the deficit, and thus the economies will respond.

Let him finish. He has a follow-on.

Q. Many people in the markets were hoping for a sequester as opposed to this smaller package. Could you explain why the sequester was not preferable since it was so much larger?

The President. I don't think anybody -- I don't know who is hoping -- you mean for a lasting sequester? I can't think of anyone in his right mind that would want to see a lasting sequester of billion in 1 year. The American people would properly be up in arms.

Now, if this thing bogs down and we have to enforce the law of the land, which I swore to do, we have to revert to sequester. And it would be extraordinarily painful. So, I honestly -- I'm not being argumentative -- I never heard anyone suggest that a sequester for a year was a remedy that this country could sustain for a long period of time.

Crime

Q. On another regional question, you've been to New York a number of times and suggested that the city ought to gets its crime problem under control. The Governor [Mario Cuomo], the mayor [David Dinkins] continue to argue that by limiting the deductibility of State and local taxes you make it tough for them to put cops on the street and that the Feds are talking out of their mouth but not willing to come with any money. Could you comment on that notion -- this part of the package?

The President. Yes. What I want is the support from those politicians up there for a crime bill. That's what I want, and that's the comment I'd make. I went up there to New York a while back, and one very prominent politician there jumped all over me for suggesting that we needed to support the police more. Now, I understand that there's quite a bit more interest in support for that.

My overall response would be, Please -- Republican or Democrat in New York and all the rest of the States -- help us get our anticrime package through, which is provided for in terms of its spending levels. So, again, nobody wants to pay any taxes. Everybody can say if the money goes to a tax, whether it's for gasoline or for whatever deduction it might be, that money won't be there to fight crime or it won't be there to clean up the environment or it won't be there to educate our kids. So, I understand that, but I just don't happen to agree with it.

Now, let me do this -- because I do have a signing ceremony over there -- let me take three more. I don't know how to be fair about this. Way in the back. We haven't worked the back here.

Federal Budget Agreement

Q. Mr. President, John E. Mulligan, from the Providence Journal. You say that you use words like ``catastrophe'' that need to be averted here. But yet you compare this issue to vetoes that you've sustained, and you say: Well, I won't withhold my visits from people running for election this year. Are you giving a free ride to the Claudine Schneiders, the Tom Taukes, the Lynn Martins -- a free no vote on this?

The President. Look, I've got to understand -- and I said this last night -- I've got to understand that there is a lack of enthusiasm on Democrats and Republicans for certain provisions of this, and I have to be realistic. If we had -- let me make a partisan statement -- if we had control of both Houses of the United States Congress, there would be things in this package that are extraordinarily different than what we see now.

I have to understand the passions of people standing out there for election. I will continue to urge every single Republican, in office and out, to support this package. But I can't bring myself to be recriminatory. I think we've got enough credibility that we can get this thing passed. It isn't easy. But if I might use this opportunity -- your having raised the question -- I wish all of them would support me strongly and lay aside some of the passions that one or the other of them have on a specific issue. That probably isn't going to happen, if I believe what I'm hearing on the television. So, now what I've got to do is get 50.1 percent, and then we're home.

Yeah, on the aisle back here, yes, sir; and then one over here. Persistence pays up.

Q. Mr. President, John Nestor, with Newslink. Why do you suppose this package is so unpopular? If that vote was held today, who would win, and can you turn it around?

The President. The American people would win if we pass it. It is tough, and the reason is because there's a lot of people that have long been advocating specific things that they're not going to get out of this package. You're looking at one of them. But I think that's where the difficulty stems.

I mean, there are broad philosophical differences. Some want to raise income tax rates and increase spending. Dick Darman and Nick Brady can tell you they fended off in the negotiations some significant increases in domestic spending. Others, on the other hand, want to have certain bigger tax cuts and want to curtail more spending. Most know that the biggest part of the budget increases come from COLA's, entitlements. But entitlement freezes or entitlement cuts on Social Security, for example, aren't in there because it's politically impossible to get those things through. So, we've protected the senior citizens in this regard.

So, I think what's happening is we have people who have been out front advocating certain positions -- coming out of the left, coming out of the right, coming out of the broad center. And I'm having to say to them: Now, look, lay aside that passion for that specific issue or that specific spending program or that specific approach, and put the national interest first. And I can do that; I know I can do it with conviction. I hope I can do it persuasively, because I feel that the best antidote for all the problems is an economy that grows with lower interest rates and more jobs.

So, that's the argument I'm making to those on the left and those on the right and those on the center who, for constituent reasons, have extraordinarily difficult problems. And I'm saying to a Democrat that's openminded: Blame the President. Say I rallied to support the President. He was elected, and I don't like this, but I'm going to support him. To a Republican, I'd say the same thing. I happen to like it because I think it's a good deal, but you're hitting the right notes here because individuals have made commitments on one specific or another. And so, I'm asking them: Look, please accept the view that this is serious business. We've got to get this deficit down. We've got to move now credibly to get it down, and this in spite of your differences with this part or another, or my differences with this part or another -- the overall good things outweigh the negative. And besides, the country has got to be governed. We have to move.

Last one.

Q. Mr. President, Roger Renningen, of the Small Newspaper Group of Illinois. Agriculture subsidies have gone from 26 billion in '85 down to more than -- they've been cut in more than half now. Your budget package calls for billion in cuts over the next 5 years. On top of that, agriculture will be dealing with the gas tax and other energy taxes. How can that be fair?

The President. It is fair because if we're correct -- and I'm happy to say the ag economy for the most part has increased and farmers' income is at a -- I don't know about an all-time high, but a significantly good level -- we're talking about billion of program over 5 years. You've got a /2\ trillion economy. That means that -- you put it in percentage of the total economy -- it isn't that high. And I believe if we are successful in our trade round -- and we're fighting like mad to do it -- that alone offsets in one fell swoop all the programs you possibly have.

So, I don't think it's burdensome. And I think people ought to look carefully at the details. And again, any time a subsidy or a support program is cut, I can understand people being critical. But I think they also know that an economy that is in recession, for example, would wipe out instantly or offset instantly the individual amounts of money that one gets from program A, B, C.

And it isn't just agriculture. It isn't just agriculture. It's in some of the entitlements areas as well. So, I'd ask the farmers: Look at what we're trying to do. Look at the success of the market-oriented approach we took to agriculture. Look at how -- where agriculture -- the per capita income to farmers stands. And help us preserve the kind of markets that guarantee continued prosperity to the farmer. So, that's the approach.

Hey, listen, I really have to go. We got German Unification Day across the way.

Voter Initiatives

Q. Mr. President, what do you think of all the voter initiatives in California and Colorado?

The President. Let them worry about that. [Laughter] I've got one right here I can worry about.

Thank you very much.

Note: The President spoke at 10:31 a.m. in Room 450 of the Old Executive Office Building. In his remarks, he referred to Richard G. Darman, Director of the Office of Management and Budget; Secretary of the Treasury Nicholas F. Brady; and John H. Sununu, Chief of Staff to the President.

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