Press Briefing by Telephone with Gene Sperling and Bruce Reed to Preview the President's Speech in Dover, New Hampshire

10:37 A.M. EST

Q: Basically, what is the President going to be talking about in Dover?

MR. REED: He is going to Dover to give the third in a series of speeches that he has been giving over the past month to sum up what he's done and what challenges are left to do. The reason he's going to Dover is that it's where he gave his famous speech nine years ago saying that, I'll be there for you until the last dog dies.

And the speech is going to be on social progress, and Gene and I will go through some of that for you. It's worth taking a look at that speech, if you haven't looked at it lately. That is the --

Q: Is it on the website, the Archives?

MR. REED: I don't think so. I think you can --

Q: Do you know the date of it?

MR. REED: It was February of '92, at the Dover Elks Club. And if you can't find a transcript, then we can help you track one down. And I can read you a couple parts of it just for fun.

Q: What is that "last dog" doing now, Bruce? (Laughter.)

MR. REED: Well, he has a new dog --

Q: Oh, that's right, he's giving away Socks. (Laughter.)

MR. SPERLING: And also, on tax issues, as we've heard, that dog doesn't hunt. (Laughter.)

MR. REED: But basically, what he talked about in that speech is that the real character issue is who cares about you, who is really trying to say what he would do specifically if he were elected President, who is determined to change your life rather than to just get or keep power. And it was a defiant speech about what really mattered was rolling up our sleeves and getting to work for the people of New Hampshire and the rest of the country.

The major points the President is going to make tomorrow are, first, that the people were right and the pundits were wrong, that what matters isn't who is up or down in Washington, it's who is up or down in Dover and places like it. And second, that the reason that we have made such progress over the last eight years is that we put in place a new approach to social problems that rejected the old labels and false choices of what he called in that speech, the brain-dead politics of both parties, and that we have sought at every turn to expand opportunity and demand responsibility in return, and that we did this -- that this Third Way, as he's called it, has been even more effective as a governing philosophy than as a political one, that the only way -- it was the only way we could solve the problems that we inherited. The only way to turn around the welfare system was to reward and demand work at the same time. The only way to make crime go down was to put more police on the street and do more prevention. The only way to build the new economy was to balance the budget and increase investment at the same time, and so on.

And he believes that this approach to social policy will endure; that the new synthesis of helping those who are willing to help themselves forms a lasting basis for activist government that wasn't there before; that in the wake of the -- solutions of the '60s and the failed attempts of the '70s and '80s had dramatically undermined confidence in government's ability to solve problems, and that confidence has now been restored.

And I think he will talk tomorrow, the major point he'll make is that the strategy worked -- that crime is down to a 25-year low, that welfare rolls are the lowest in 30 years, and just as important, people on welfare are five times more likely to be working then they were when he took office -- that we've lifted 7 million Americans out of poverty; that we've doubled spending on education and put standards in place in every state at the same time; and that because of that, that America has a whole new confidence in its ability to solve social problems.

The very notion of social progress was in some ways unthinkable eight years ago. The problems that we inherited of rising deficits, rising rates of crime, welfare, illegitimacy, the decay of the inner city were widely regarded as intractable problems that nobody could do anything about. And now, happily, that has changed, not just because of what we've done, but because of what many have done around the country. And we've restored the faith that policy matters, that the approach government takes matters, and as the President said in his first Inaugural, everything wrong with America can be fixed with what's right with America.

Gene, do you want to say anything more?

MR. SPERLING: I guess that I'd just add is that we have seen, over the eight years, as he promised during the campaign, a focus on the economy, like a laser beam in the cause of empowering families. And I think what you've seen over this time period is an extremely -- as he promised, an extremely focused eight-year commitment to turning our fiscal situation around and, as Bruce said, investing in people at the same time.

And I think what was very distinctive about this period was that in the campaign in '92, the President -- then Governor Clinton -- promised to do deficit reduction in a progressive way, in a way that still invests in people and protected the poor. I think there was great skepticism at that time that that was possible and that was just a -- to promise both deficit reduction and progressive investments was a political statement, that you couldn't do both at the same time.

Yet, when you look at how the Deficit Reduction Act of '93 was put together -- with spending cuts, but also tax increases on the top 1.5 percent, with tax cuts during the earned income tax credit on the bottom 25 percent, and major increase in Head Start and WIC, you could see right from the start that he kept to that commitment. He kept to that commitment in fighting the Contract With America in '95; he kept that commitment in signing the progressive Balanced Budget Agreement in '97; and he kept to that commitment in saving the surplus for future generations, as opposed to letting it go to regressive tax cut over the last few years.

You also saw that this kind of sustained recovery, together with a focus on more investments in education and training, higher earned income tax credit, taking away the shields to barriers going to work has helped ensure that this recovery has benefitted all people.

And there's a very consistent thread running through this. When you look at the minimum wage, when you look at the Earned Income Tax Credit, when you look at the focus on child care, on not having people lose their Medicaid when they go to work on the welfare reform, all of it is a consistent pattern on addressing problems of the poor through taking away barriers to work, and rewarding work. And as a result -- and this is really quite worth focusing on -- in the 12 years before we came into office, the top 20 percent had seen their incomes go up 26.4 percent, but you had no income growth for the bottom 60 percent during that 12-year period.

Q: Could you repeat that again -- I'm sorry.

MR. SPERLING: During the 1981-to-1983 period, that 12-year period, the highest quintile, the top 20 percent, saw their income grow 26.4 percent. But the bottom 20 percent actually saw their income fall. During a 12-year period their incomes actually fell by 4.4 percent. And then in the second and third quintiles, you had virtually flat -- virtually zero growth. So for the bottom 60 percent of American income workers in the 12 preceding years, they had zero income growth, though the top 20 percent had 26.4 percent.

Since 1993, all five quintiles have seen significant income growth, even in a shorter time period. The highest income growth has been, we're proud to say, in the bottom 20 percent. Their income is up 16.3 percent. This is the Census numbers, the annual Census poverty numbers.

Q: I'm sorry, that is bottom 20 percent?

MR. SPERLING: The bottom 20 percent have seen their income go up 16.3 percent. The highest quintile is up 16 percent. And then the second quintile is up 13.6 percent; the middle quintile is up 13.4 percent; and the fourth quintile is up 13.4 percent.

So when you talk about that there was a commitment to make sure not just that we had growth, but that we grew together, that all votes were brought up together, that commitment is manifested in the numbers. And I do think there's no question that it was affected by the policies and the values in which deficit reduction was conducted.

Unlike the '80s, where many people were driven -- fell through the cracks -- lost housing, lost some of their social safety nets -- this was a period where the fiscal situation was turned around while actually taking significant steps to empower people with the Earned Income Tax Credit, with the education and training. And so you've seen that all five quintiles -- and those are -- that's inflation adjusted growth, have seen more than double digit income growth in that time period, with the greatest income growth being at the bottom 20 percent.

Q: Gene, is the increase in the bottom 20 attributable largely to the Earned Income Tax Credit?

MR. SPERLING: I think it's to a couple of things. One is that -- it's interesting. The Census, the poverty numbers do things where they include the Earned Income Tax Credit and then they show measures when they don't. Overall, there are 7 million less people in poverty today then when the President took office. That is a fall from -- where is it -- the Earned Income Tax Credit pulls out generally about 4 million people out of poverty, about 2 million more than when we took office.

But in terms of what is credited with that, I would say two things. I wouldn't credit just one specific thing. I would say that there was a very conscious effort for eight years to not let the burden of turning our fiscal situation around fall on the poor. And I think you saw in 1995, when deficit reduction was going to be done by undermining the safety net, the President was willing to face even a government shut-down to prevent that. He was willing to take the significant political hit of raising taxes on the most well off in '93 to prevent that.

And he was, at this time, very much increasing funding. Head Start funding more than doubled during this period, more than doubled. Dislocated worker training more than tripled. As Bruce said, when you take all of the key education -- I mean, education as a whole more than doubled during this period, with significant amount going to low income.

The other thing, though, which I think goes to the general economic view, is that strong fiscal policy certainly gave the Federal Reserve more flexibility. It helped the management of a very long expansion. And as that expansion got longer and longer, the private sector had to reach out more and more to people who had been on the fringes of the work force. And so you saw a very nice coming together of a long expansion, a smart welfare reform plan, and pro-work programs like the Earned Income Tax Credit.

And, together, you had both economic -- a long expansion, and economic and social policy all helping encourage more people who had been on the fringes of the labor force moving into the work force. That's just a dramatic improvement. It's stunning to see the unemployment rate fall during the last -- during this period among where Hispanic unemployment has gone from over 11 percent to 5.5 percent.

Consider that when we came into office, unemployment was 7.4 percent for the country as a whole. And -- I'm sorry, Hispanic unemployment went from 11.3 percent to 5.7 percent. African American employment went from 14.1 percent to 7.6 percent. So imagine that we came into office, the general unemployment rate for the economy was 7.3 percent. Consider that Hispanic employment now is lower than it was for the general unemployment picture as a whole. And remember also in December of that year, people forget unemployment in California in '92 was 9.7 percent. It was nearly 10 percent in our largest state in --

Q: I'm sorry, what was that average again for all Americans at that time?

MR. SPERLING: It was 7.3 percent in January of '93 when we came into office.

Q: Okay. And then, is the President going to address the fact that obviously there's going to be sort of a change of mentality and viewpoint in Washington with the Bush administration? Is he going to address that at all?

MR. SPERLING: Well, I think that he will talk about some of the work that lies ahead on education, on health care, on maintaining the prosperity. I think that as he said yesterday in Chicago, we hope that on some of these issues, the country can continue to make bipartisan progress. We think it would be good for the country if education reform becomes a bipartisan issue.

Q: True, but getting away sort of from the specific issues and getting more into the mentality that's going to be driving those changes like you were discussing earlier between -- the mentality that President Clinton brought that was successful in bringing about certain changes, there's obviously going to be a change in that driving mentality. Is he going to address that at all?

MR. REED: I don't think he'll get a critique of the Bush agenda. I think that there are some important issues he'll talk about that he hopes will remain at the center of the national debate, like education, health care, the economy. And I think it's too early to tell whether the new administration will govern from the center, in a practical way, as he has, or make false choices and wrong choices as he tried not to do.

Q: Can you guys talk at all about any sense within the White House about him going back there? I mean, this was a state that was almost the end of the political road for him, and now he's going back there 10 days before he leaves his second term. Is there any sort of sense of nostalgia, or is there a specialness to going back to New Hampshire at all?

MR. REED: Oh, absolutely. He has always felt a special bond with the people of New Hampshire. And he went back there early -- I guess about two years ago, at this time, to say thank you. But he wanted to go back one more time and talk about what it all has meant. And New Hampshire certainly has gone through a stunning transformation over the last eight years. The recession in the early '90s hit there harder than almost anywhere else.

Gene, do you know off the top of your head what the unemployment rate is down to now in New Hampshire?

MR. SPERLING: The unemployment rate -- I need to find out what it was in '92. By '93, January '93, it had gone down to 7.6. It was still above the national average. It's a remarkably low 1.8 percent now, if you can believe that.

So, Bruce, we ought to think about that. (Laughter.) Bruce, we ought to think about that. They're looking for people there. (Laughter.)

MR. REED: Find ourselves a Dunkin' Doughnut. (Laughter.)

Q: Manchester Holiday Inn.

Q: Donuts and domestic policy. (Laughter.)

Q: Would you guys know off the top of your head, too, about this stop in Manchester, what's going on there? I guess it's a closed event, but do you know what it is?

MR. REED: Oh, is there a closed event?

MS. GEGENHEIMER: I can chime in. The President is just going to go to a private reception. If you have more questions, just contact the press office.

Q: Is that going to be a private reception with the Governor or other --

MS. GEGENHEIMER: We can check on that. If you want to check in with the press office, we can get you some more details.

Q: And are there future subjects coming up in any of the other stops he's going to make, as he closes out his tenure here? He's got a trip to Arkansas, but you said that he'd talk about a couple different subjects over the last week or so. This one is going to be social progress; are there other subjects to come?

MR. REED: I hesitate to say that this is the last. But I don't think there are any other policy speeches scheduled in the same way. He's done one on foreign policy, one on economic, and this one's on domestic.

Q: Bruce, what's been decided about a possible state of the union? Is one going to be given? Is there going to be a written state of the union, or do you know if any decision's been made on that?

MR. REED: I don't know, Mark.

Q: Have you guys decided what he's going to do on the 20th, in terms of, is he going to go up to Chappaqua once he's done, or what's going to happen that day? Do you know yet?

MR. REED: I've heard that he's leaving for New York, but I don't know the schedule for exactly what he's doing or -- I assume he's spending the night in Chappaqua, but I don't know for a fact.

Q: Is the speech in Boston going to mirror the one in Dover?

MR. REED: Yes, although I think that's more -- that is a big crowd event, as I understand it. So more of a rally then a policy speech.

Thanks a lot.

END 11:05 A.M. EST