Bill Clinton photo

Press Briefing by Chief of Staff Leon Panetta, Director of the Office of Management and Budget, Alice Rivlin

May 17, 1995

The Briefing Room

2:35 P.M. EDT

MR. PANETTA: Good afternoon. Let me, first of all, introduce the other members that are with me. I will say a few words regarding the President's veto. Then Alice Rivlin will present some of the specifics with regards to the issues that we're concerned about within the rescissions bill. We'll also have Secretary of Labor Robert Reich, Secretary of Education Richard Riley, and Eli Segal, who is head of the National Service Corps, all of whom will be available for questions following the statements.

As you know, the President today announced that he will veto the 1995 budget revisions bill that was adopted this week -- yesterday -- by the House-Senate Conference Committee, assuming that that legislation is passed by both the House and the Senate and comes to the President.

Let me be very clear -- the President wants to sign a bill, but he wants to sign a bill that reflects the nation's priorities, not the pork projects that members have included in this legislation. The issue is not deficit reduction. The President wants to increase the amount of deficit reduction that's included in this bill. The conference report, as we understand it, has about $16.4 billion in deficit reduction.

The President's proposals would bring it to $16.5 billion. And it would increase under the President's proposals almost $18.6 billion in five years. So the issue is not deficit reduction. The issue here is priorities. What happened here is that the conference committee in the Congress basically chose pork over people; courthouses over education; basically, highway projects over national service; government travel over clean water; and basically, allowing expatriate billionaires to get their kind of tax breaks while we're cutting public housing, and particularly housing for individuals like AIDS victims who need that kind of housing.

Let me just give you a few examples of the concerns that we have in this bill. At the same time they wanted to deprive literally thousands of young people the opportunity to participate in the national service program, they included -- what they did was they failed to rescind and included $130 million for nine separate highway projects in one congressional district alone -- $130 million for nine separate highway in one congressional district alone. They wanted to deprive school systems --

Q: Whose district was that?

MR. PANETTA: We will provide that information. They wanted to deprive school systems across this country of assistance in making their schools drug- and crime-free. But they were able to find a million dollars to fix a single street in Indianapolis. They wanted to cut deeply into the resources that we want to make available through the Goals 2000 program to train teachers in this country. They cut that money. But somehow they were able to find almost $109 million for a courthouse in Phoenix, Arizona, that more than doubles the size of the existing courthouse.

The problem is basically this: At a time when you really do have to make tough decisions about what programs you're going to rescind in order to achieve additional deficit reduction and, at the same time, you're focusing on the priorities in this country instead of making the choice to go after this kind of pork in order to protect education, in order to protect some of the programs that impact on people, they did just the opposite.

In addition, they also made an assault on some important environmental programs. On the Senate side, we had supported the level of reductions that they had asked for on clean water. Instead, the conference went up another $500 million in additional cuts with regards to safe drinking water. The President expressed from the beginning our concern about that level of cuts.

In addition, the President objects to the language that was approved by the conferees that relates to timber cuts. He has supported the objective of increasing timber salvage harvests. But the problem with this legislation is that it would simply lead to the same old gridlock that we have seen in the timber area year after year after year that was resolved by the forest plan that was finally put into place. This would just simply take us back to gridlock, and the President's not prepared to support that.

He has made clear to the Congress that he would reject this bill if they were to cut deeply into the nation's commitments and investments in education and national service. They went ahead and did it anyway. The President has no choice but to veto this bill as a consequence. He will not permit the Congress to impose distorted priorities on the American people.

At the same time, he's making very clear to the Congress how they can improve this bill so that he can sign it. And we are making specific proposals for additional reductions in order to achieve that.

The proposals -- Alice Rivlin will outline those even further, but they include, for example, $438 million in rescinding money for courthouses and other federal buildings; $450 million for special highway projects; another $470 million for government travel. In addition to that, we are asking them to close the loophole that impacts on those billionaires who basically surrender their citizenship in order to avoid paying taxes in this country. That is unacceptable and that, frankly, provides us with additional funds in order to provide some of the restorations that we think are important to people who decide they want to live in this country rather than in some other country.

These are not just numbers. And these are not just about programs. For those of us who have worked with budgets for years, I think all of us understand that sometimes it looks like this is all just an exercise in numbers, but every one of these numbers has some effect with regards to people. The cuts that are contained in this legislation would hurt people, and they would hurt people in order to protect projects and pork that the members wanted to include in this legislation.

Let me be very clear: The President of the United States wants a budget bill that he can sign. We need the assistance that he is requesting here for the people of Oklahoma City and for those who suffered the disasters in California. We also need deficit reduction. The President has requested these funds, and he wants the Congress to come back, approve the kind of cuts that we are recommending to the Congress, approve the restorations that we are asking for, and send that bill to him so he can sign it.

The President will not allow the Congress to hold the needed assistance that should go to Oklahoma and to California hostage to the kind of pork that was contained in the bill. He will not tolerate using this needed legislation as an excuse for forcing on the American people the kind of distorted set of priorities that we do not believe is in the interest of our country.

Let me have Alice go ahead and go into some of the particulars.

DIRECTOR RIVLIN: I think every time we look at a budget action we need to keep in mind the basic goal of budget policy, and that's to raise the standard of living of average people. To that end, we need to invest in people and their skills. We need to make it possible for today's young people to have good jobs, high wage jobs in the future, especially those with low skills who have been falling behind. We also need to reduce the federal budget deficit so that more of the nation's savings go into productive investment instead of financing the government.

There are twin deficits -- the investment deficit and the budget deficit. The Republican bill cuts $16 billion in spending from the current year to reduce the budget deficit, and we like that. The bill also cuts programs that the President fought for -- spending that would help people get an education and training for better jobs. And it cuts money for clean water to make it safe for drinking. And it fails to rescind highway demonstrations that didn't seem to be needed, that the President's budget asked to be rescinded. And it keeps funding for courthouses and other kinds of buildings that the administration did not request.

We just think those are the wrong priorities. It's not a question of the bottom line, it's a question of the priorities.

Very specifically what we are proposing is to add some things and to subtract some things in order to put together a bill that the President could sign. The President proposes to cut from this bill $438 million for courthouses and other federal office space, $450 million from highway demonstrations, $474 million from government travel and overhead, $102 million from low-priority foreign aid, and $60 million from the expatriates billionaires loophole. That adds to $1.5 billion.

The President proposes to restore $619 million for education and training, $500 million for the environment -- that's safe drinking water -- $230 million for housing and some veterans programs, $20 million for the Women and Infants Nutrition Program, $31 million for crime prevention, and $14 million for community development banks. That adds to a slightly smaller total -- $1.4 billion.

That leaves the total deficit reduction in the bill that the President would sign slightly higher -- $16.5 billion instead of $16.4. As I said, it's priorities, it's not the bottom line.

Q: Does the President think they're going to accept these priorities?

MR. PANETTA: The President believes that these are the American people's priorities and that the Congress should reflect those priorities as they approach this legislation. We think that the President's veto will be sustained by the Congress.

Q: What is the low-priority foreign aid that you referred to?

MS. RIVLIN: It is PL-480 for the cognoscenti of food aid, but it is not the main food for humanitarian purposes which I believe is Title I. This is Titles II and III, which have been less effective and which we thought were not necessary.

Q: Who reviews it?

MS. RIVLIN: Partly it is food aid that goes to governments for resale. They basically use the proceeds, and it is not the part that goes to the humanitarian organizations to distribute in the face of disaster, which is a much larger number.

Q: And who, in particular? Which governments?

MS. RIVLIN: The countries -- we can provide you a list of the countries that have received aid.

MR. PANETTA: It's government to government.

MS. RIVLIN: It's government to government.

Q: Bob Livingston, the Chairman of the Appropriations Committee, wrote the President a letter today saying that "For the past several months my committee has begged you to come forward with proposed cuts. You've remained silent until the conference has closed." He says that Pat Griffin followed up with the staff, saying that you couldn't accept any certain -- cuts in certain investments. He said that they never followed up with specifics, and basically says that you are not cooperating.

MR. PANETTA: Well, let me just tell you what we did and then you can draw your own conclusions. First of all, the President made very clear in the Dallas speech that we would accept the Senate bill and the levels in the Senate bill, and that he would sign that bill. Secondly, in the policy positions that we send up to both chairmen, both Chairman Livingston as well as Chairman Hatfield, and also the ranking members up there, we made very clear that the Senate version of the bill is acceptable, and indicated our strong concerns for the House version of the bill, and that he would veto the bill. That was actually contained in the letter that we sent forward. It also expresses our position on a number of issues that were before the conferees.

In addition to that, I met with both chairmen prior to the conference and made very clear that the President's bottom line on these key priority investments was the Senate bill. We have always said that it is the levels in the Senate bill that we felt were acceptable and that restored the key programs that he cared about and that that was, frankly, our bottom line. We understand that in conference there's some give-and-take, but I made very clear that the President felt that the Senate levels were bottom line.

In addition to that, I called both chairmen during the course of the conference when I could see that they were headed towards beginning to double the cuts that were in the Senate bill with regards to the programs that we cared about, talked both to Bob Livingston as well as to Mark Hatfield and made very clear that the President would not just sign any bill that they sent down. And we have continued to stay in touch through myself, as well as through our legislative operation to make very clear that we were not prepared, the President was not prepared to just accept any bill, that he had some very strong priorities that we had outlined, and that the Senate bill represented the levels that we thought were acceptable.

And, instead -- I just have to tell you -- the conference nearly tripled the cuts, nearly tripled the cuts in the education and training area from the Senate level.

Q: Leon, can you explain the origin of rescinding on courthouses and highways and the other things that the President objected to as pork? Is this new spending that they have slipped into this bill, or is this old spending that had been previously approved that they failed to cut out? Where is this money coming from? What's the nature of it?

MS. RIVLIN: Well, the highway demonstrations, we proposed rescission in our 1996 budget submission and they didn't do it. So we still think it's a good idea to rescind those projects. On the courthouses and --

Q: So that's pre-existing spending?

MS. RIVLIN: Well, it's money -- I mean, that's what a rescission bill is. It is -- it's been appropriated, but it hasn't been spent. And we think it's low priority.

Q: There is some new spending in this bill, isn't there? I mean, the Oklahoma and --

MS. RIVLIN: That's right. That's right.

Q: I'm just trying to make a distinction whether they stuck a bunch of new money in here or is it old stuff.

MS. RIVLIN: No, this was stuff previously appropriated, but which we thought was low priority, and had, in the case of the highway demos, already asked to be rescinded. In the case of the courthouses and other federal buildings, this was money not requested by the administration last year, but added by the Congress.

Q: And approved and signed by the President?

DIRECTOR RIVLIN: Oh, yes, all of the rescissions come from money that has been appropriated.

Q: Did he previously propose that this courthouse money be rescinded?


Q: When did it dawn on him that this courthouse money should be rescinded?

MR. PANETTA: What happened is that -- obviously, these are monies that we did not request that were then included in the context of appropriations bills that came to him last year that were signed into law. Now we're facing the issue of, do we try to achieve additional deficit reduction and try to maintain the important priorities, particularly affecting kids in this country, that the President's concerned about. So clearly we've got to make some tougher decisions here with regards to what are we going to -- what are we going to try to protect in funding, and where should we cut?

Instead of cutting kids, instead of cutting education, instead of cutting national service, they decided they were going to keep in place the pork projects -- the highways projects, their building projects. We think when you're faced with kind of decision, kids ought to come first; that national service kids ought to come first; that programs that affect people ought to come first; and that they ought to cut the projects in their district. And that's the choice that we're facing.

Q: Just to be clear, you had never presented these before?

MR. PANETTA: We have presented the highway demonstration projects as rescissions. We have proposed those. We've --

Q: How much did that amount to?

MR. PANETTA: That's about -- over $450 million.

Q: Is there a lock box provision in this bill? The President today said he thought it was a mistake to have that removed to dedicate the savings to deficit reduction --

MR. PANETTA: The President supports making sure that this would go for deficit reduction and not go to be used to pay for tax cuts in the out-years.

Q: specific language in the bill?

MR. PANETTA: Pardon me?

Q: Is there specific language in the President's bill?

MR. PANETTA: The President would support any language that made clear it could not be used for tax cuts in the out-years.

Q: As a technical matter, what do you want them to do, reopen the conference? I mean, can they amend this on the floor in the House?

MR. PANETTA: It's really -- it's a decision that is up to them. I think at this point they've closed the conference, so it would probably be difficult to reopen the conference and make these corrections.

Q: As a practical matter, you've got about, what, a billion and a half here about which you're --

MR. PANETTA: That's correct.

Q: So would it be fair to say then that the President accepts the overwhelming majority of these?

MR. PANETTA: That's correct.

Q: And what happens to the Oklahoma City funding if --

MR. PANETTA: The Oklahoma City funding is in this bill. All they have to do is make the changes with regards to the restorations that we've asked for, do the additional cuts that we've asked for in pork, and we can get the Oklahoma money out.

Q: But if they don't?

MR. PANETTA: If they -- look, it's the Congress's responsibility to pass these funds.

Q: Mr. Panetta, are you setting a precedent here? I mean, you've accepted the Republicans' parameters, that $16.4 billion or more have to be cut. Are you willing to come up with your own list of budget cuts to meet the Republicans' other goal, which is getting to balance by 2002? I mean, are you setting a precedent here?

MR. PANETTA: The President has made clear that he's prepared to sit down tomorrow, if necessary -- sit down tomorrow -- if the Republicans are willing to move off of their huge tax cut for the wealthy, if they're willing to do Medicare and Medicaid savings in the context of health care reform, and if they're willing to protect education. If they'll make those commitments, we'll be willing to sit down tomorrow and talk about where we go with the budget.

Q: Back to the question about Livingston's letter. We have sat here in this room dozens of times this year and asked you for cuts. And you've always answered that you -- and Ms. Rivlin -- that you favor that idea, but nobody ever mentioned this courthouse money. If you knew you had half a billion dollars in money that you wanted cut, shouldn't you have mentioned it to Bob Livingston at a time when the conference was open?

DIRECTOR RIVLIN: Well, this isn't money that we absolutely wanted cut. I mean, it isn't that courthouses are always a bad thing. But when you have to make very tough choices, and we were faced here, as Leon has said, with a bill with the wrong priorities -- so we wanted to say, here are some things that ought to be added, and here are some things we think, after due consideration, are lower priorities. Certainly courthouses are lower priority than education.

Q: Why not make that point while the conference was still open?

MR. PANETTA: But we said we supported the Senate bill. The Senate cut the courthouses. They cut almost $1.2 billion or $1.3 billion, pointing specifically at the courthouses. That's why the President would accept that bill. Made that clear at the time we discussed it. The Senate bill makes the right choices. That's why the President would sign it. They reversed that.

Q: Leon, is the President disappointed or frustrated that the Senate's going to take a whole new look at Whitewater? Is that going to tie up the administration?

MR. PANETTA: Well, the President has always said that we would cooperate. As a matter of fact, I think the vote and our cooperation in the proposal today reflects that.

Q: Leon, to follow on a related subject, is the President going to ask Ron Brown to remain on the job? And can you tell us what the President's justification in whatever decision he makes is?

MR. PANETTA: The President has issued a statement on that, and I have nothing more to say than what's in the statement.

Q: Could you explain the White House criteria for that? Because we were told previously, in the case of Henry Cisneros, for example, when an independent counsel was named, that because the allegations involving Mr. Cisneros did not involve his job with the government, the federal government, that therefore he could remain on the job. But the allegations involving Ron Brown involve his very application to the job as Commerce Secretary. So why would the President permit Ron Brown to stay on the job and not ask him to step down?

MR. PANETTA: All I'm going to say is that we're going to stand by the President's statement with regards to Ron Brown. And Mike McCurry is going to answer the other questions involving -- (laughter.)

Q: Do you have a list of the courthouses and the highway projects in whose districts they're in? And do you happen to know if any of them are in Democratic districts?

MR. PANETTA: I'm sure there are some in Democratic districts and there are some in Republican districts. Having been a member of Congress, there is a tendency to always split the pie on this stuff when you're passing out these kinds of projects. So I'm sure it affects both Democratic and Republican districts.

Q: Can we get that list?

Q: Who are the nine highway --

MR. PANETTA: We have the full list of all the courthouses, but this number does not represent all of the courthouses, it represents, as we said, about $438 million.

Q: Who has the nine separate highway projects?

MR. PANETTA: The Chairman of the House Public Works Committee -- wouldn't it? It sounds like the Chairman of the House Public Works Committee.

Q: Dr. Rivlin, you seemed to suggest in an interview with The L.A. Times that was published today that you'd be willing to reduce the level of your own tax cut proposals. By how much were you thinking?

DR. RIVLIN: I certainly didn't imply any specifics at all. We were talking about a smaller, more targeted tax cut, which is what ours is.

THE PRESS: Thank you.

END3:00 P.M. EDT

William J. Clinton, Press Briefing by Chief of Staff Leon Panetta, Director of the Office of Management and Budget, Alice Rivlin Online by Gerhard Peters and John T. Woolley, The American Presidency Project

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