Press Briefing by Treasury Secretary Lloyd Bentsen and Former Social Security Commissioner Robert Ball
The Briefing Room
1:15 P.M. EDT
SECRETARY BENTSEN: Good afternoon. Thank you for coming. I'm also going to be joined by Robert Ball, who was the Social Security Commissioner during the administrations of Kennedy, Johnson and Nixon. Well, here we are with the President in the Middle East, helping the peace process and visiting our troops.
I thought I'd come over and say a few words about the economy and how important I think it is to the voters. We're going forward with an economic agenda that strengthens America, an agenda that takes on some of the problems that we inherited some 20 months ago. But, already, we're beginning to hear proposals that would take us back to the days of trickle-down economics, when our national debt was going up and up and up.
I've been talking about that deficit this week, how we've taken $87 billion out of it in just two years, and how we're going to bring it down to $167 billion next year. Our debt quadrupled in the '80s and the early '90s, up $3 trillion. The interest payment that we have to make on that much money this year is $174 billion.
Now, think about that. We have to take in enough money to pay all our bills this year, taking all of that in, then except the interest left over from the debt of the '80s and the early '90s, taking care of all of that, except for the interest -- if we weren't paying for the past, if I wasn't writing out that interest check and having to borrow to do it, we'd have ourselves a balanced budget next year.
Something else I'd point out as we come up to these elections. Our opponents put out a month ago -- they put out one $1 trillion worth of promises, with few specifics on how you're going to pay for those promises. I think the American people are tired of pie in the sky. They want you to get specific and talk about how to pay for it. What Republicans don't say is what they're proposing, really -- lowering taxes for the wealthy and more defense spending, and that it will mean cutting Social Security and Medicare to pay for it. And they would still end up running up the deficit.
I don't hear much talk about that contract these days. I think they're running from it. I think they wish they had never written it. They know that the voters understand that the policies of the past just will not work.
Our opponents are trying to sell the same old ideas when the economy today is in the best shape that it's been in decades. Americans are recognizing that this administration has turned the economy around with very specific cuts in programs. To make our system fairer, to encourage the business climate, there are more than 4.6 million new jobs that have been created in the last 20 months. That's nearly twice as many than the entire previous four years.
Unemployment is down almost two points. Every measure looks better. Economic growth is steady, not stagnant. Industrial production is strong. Business equipment investment is nine times higher than before. Millions and millions of homeowners have refinanced their mortgages and have extra money in their pockets to invest, to save, or to spend. And we've made all that happen, and at the same time we've been scaling down the size of government --making it smaller and more efficient.
We're always looking for ways to do a better job controlling spending. Some ideas are feasible and some aren't. And as President Clinton has said, he has absolutely no plans to cut Social Security.
I'm from the generation that fought a war, came home, helped build up what we have today. Look at my gray hair. I understand the concerns of people my age regarding Social Security. That issue matters to me. But there are other people like Oliver North and Newt Gingrich who want to make Social Security voluntary, take it private, do away with it, require Americans to have their own retirement plans. The only people who could afford a decent retirement would be those lucky enough to have some extra income to put away during those years that they're raising families, paying for education, paying doctors' bills.
Taking Social Security private, the way some Republicans suggest, would break the sacred promise of the United States government to its citizens; and that promise must not be broken.
I belong to the political party that started Social Security almost 60 years ago, and created Medicare almost 30 years ago. I also belong to the party that looks forward, not back, that deals with our problems head-on. Time and again, we've had to protect our seniors from wholesale Republican attacks on Social Security, and we'll keep right on doing that.
We cut the deficit, and Republicans want to cut Social Security. I'll tell you, for Republicans to go after Democrats on Social Security is like The National Enquirer accusing The New York Times of sensationalism. (Laughter.)
MR. BALL: I've spent most of my career in improving Social Security and Medicare, defending it against assaults, and it's the first time I've ever been involved in a congressional -- series of congressional elections. But when I read the Contract With America, I became greatly disturbed and felt that I had to do something about it.
What that contract does is to increase some expenditures, cut taxes, and promise at the same time to balance the budget. It doesn't add up. And when they add to the contract the idea of a constitutional amendment, which would take hold -- a budget-balancing constitutional amendment that would take hold in the year 2002, I see only one place they could possibly go: and that is to cut Social Security.
If you leave Social Security out, and you do the other things that they say, they have to cut every other program in the federal government by 30 percent. That is, retirement pay to the military, food stamps, the FBI -- every program you can think of would have to be cut an average of 30 percent, and if you don't cut one 30 percent, you have to cut the others more.
So I don't think they can do that. I don't think they would do that. And, therefore, when the constitutional amendment actually took hold in the year 2002, they would have to turn to Social Security -- they'd turn to Social Security and Medicare -- if Medicare was also exempt, we'd be talking about 43 percent cuts across the board in everything else -- they put -- they start to cut Medicare and Social Security -- it seems to me just inevitable. The program is on, really, a collision course with the rights to Social Security benefits and the rights to Medicare.
Now, not every Republican congressman or candidate is the enemy of Social Security. I don't want to leave that impression. But I'm talking only about the 300 candidates who signed this Contract with America.
As far as they're concerned, I would encourage every beneficiary of Social Security and everybody contributing to Social Security to ask and find out whether their own Republican candidate in their district signed this contract. If they did, I consider it a menace to the Social Security program.
SECRETARY BENTSEN: Thank you. All right, we'll take any questions you might have.
Q: Mr. Secretary, while you have out there the dollartesting World War II, post-World War II lows and you have the long bonds a little above eight percent now, aren't you afraid of making the markets nervous when you come out defending entitlements so strongly?
SECRETARY BENTSEN: No, what I've come out defending is a budget-cutting program that is ahead of schedule, that has given us low inflation, and steady, substantial growth -- a budget that has created some 4.6 million jobs -- created jobs at least twice as fast as the previous administration was creating it, and they did it over four years, and we're talking about some 20 months.
I'm looking at one where labor unit costs have stayed moderate. I'm looking at a report coming out of Geneva that America has now become the most competitive nation in the world, and displaced Japan on that one.
Q: Mr. Secretary, the GDP, the quarterly GDP number is coming out tomorrow. Do you have any sense of how strong it's likely to be? The markets seem to be anticipating it with somewhat unusual anticipation. And what might its significance be?
SECRETARY BENTSEN: Well, I might say -- if I became as specific on that one, that would have some effect today and we wouldn't need to bring it out tomorrow, would we? I'm afraid I can't do that.
Q: Mr. Secretary, the Rivlin memo makes clear that in the year 2013, the Social Security system goes into a cash flow imbalance. If you're not going to cut the benefits, does that mean you're going to have to raise taxes to keep the cash going in?
SECRETARY BENTSEN: What you're talking about is, in effect, a 75-year projection, and we're talking about something that'll run a surplus well into the next century. Where our concerns are at the moment is on containing health care cost increases; that's where we have to get quite specific and work on it next year.
Q: The Republicans are starting commercials tomorrow, and one of the commercials attacks the Rivlin memo. And they say in the commercials that Democrats have been secretly plotting to make these horrendous budget cuts the same way you're criticizing the Republicans of plotting horrendous budget cuts. What's your reaction?
SECRETARY BENTSEN: What you see on the Alice Rivlin memo is a catalog of what think tanks -- various think tanks, what specific Republicans have made in the way of recommendations. That's something that the President should be apprised of, of all of these things that are being floated as possibilities.
Q: Mr. Secretary, isn't it really, the Rivlin memo, perhaps the most honest thing that's coming out of Washington nowadays when you consider --
SECRETARY BENTSEN: It's an honest accounting of all the options that the Republicans have brought forth, that think tanks have brought forth, and the President is entitled to look at those. That does not mean that the President is seriously considering any one of those.
Q: Mr. Secretary can you explain why with all this economic progress that you've reported and others have reported that family income is still so stagnant?
SECRETARY BENTSEN: I think what you're saying in that situation is a creation of jobs that is far beyond what you've seen any other major industrial country in the world bring about. And I think that is getting through to the American people. I think that's one of the reasons that you're seeing the polls of Democrats beginning to move and beginning to improve.
I'm looking at what has happened to Cuomo's polls in New York City; I'm looking at Diane Feinstein's polls. These things are beginning to improve, and I think they're reflecting on the American's people's attitude.
Q: My question was, why is family income still stagnant if you have all this economic progress?
SECRETARY BENTSEN: By what you're seeing overall is a creation of jobs. And that's important to families. And what you're seeing in the other countries of the world is 12 percent unemployment in Europe, you're seeing growth flat in Europe and flat in Japan. And if you didn't have growth in this country, you'd see a substantial decline in family income.
Q: Mr. Secretary, yesterday you're Under Secretary Noble said that starting in the 1995 filing season the IRS will no longer provide direct deposit indicators to electronic return originators. How will that help you fight fraud? And how much of a fraud problem do you have with electronic --
SECRETARY BENTSEN: Well, what that does, it gives time to check. And so they will not have the prior notice. And that means some of these commercial institutions, financial institutions that were making short-term loans will not have the advantage of that information. But it will help us very substantially in certifying and ratifying the legitimacy of the return.
Q: You have mentioned the high cost of financing the national debt. There is a widespread expectation that the Fed will boost interest rates again later this year. That would increase your cost of funding the national debt. If that happens, aren't you going to have to look for further economies to keep your deficit promises?
SECRETARY BENTSEN: I'll tell you what we're seeing -- we're ahead of schedule from that standpoint as far as the promise -- we have a cushion. We're doing more than we said that we would commit to. And I'm not about to try to anticipate what the Fed's going to do. I learned that one sometime ago.
Q: Mr. Secretary, what is your position on 187, about 187?
SECRETARY BENTSEN: What's my position? I don't vote in California.
Q: No, but what do you think about --
SECRETARY BENTSEN: I'll let the people of California vote on that one.
Q: Mr. Secretary, the Rivlin memo that was leaked last weekend, had some initial --
SECRETARY BENTSEN: At least I knew what it was. (Laughter.) I understand one of the candidates, it took him a week to figure out what it was. (Laughter.)
Q: Mr. Secretary, what about that candidate, himself, not paying Social Security taxes on his nanny, or having an illegal immigrant nanny?
SECRETARY BENTSEN: Shame.
Q: Mr. Secretary, the Rivlin memo that came out last week appeared to have had three initials, the copy that was leaked had three initials in the upper corner. And I heard some speculation that that might have been addressed to somebody in your department, Secretary. Was that memo in any way prepared at the request of somebody in the Treasury Department, or was this somebody in the general --
SECRETARY BENTSEN: No, it was not. And I don't know where the leak came from. I tell you, the way Washington is these days, it could come from many places.
Q: And secondly, may I ask --
SECRETARY BENTSEN: And third -- (laughter) --
Q: have you or any of the top administration officials talked with Mrs. Rivlin about how that memo happened to come out just a couple weeks before the election and the wisdom of having such a memo circulating two or three weeks before the election?
SECRETARY BENTSEN: Let me tell you, Alice Rivlin is a very qualified, capable person. And what she was trying to do, as I understand it, was develop a catalog of all of these options that Republicans are surfacing, think tanks are, and others are.
Q: Can you reasonably see the United States moving towards a value-added tax at any time in the near future?
SECRETARY BENTSEN: I know of no plans to move toward a value-added tax -- none. I did see a flat tax proposed by one of the Republicans. And the problem with it, it did not -- it gave you an enormous deficit each year. And I think the proposal was a 17.5 percent flat tax. And the numbers I saw after the study of it by some of the economists were that to get even, you'd have to raise that to something like a 25 or 26 percent flat tax. Obviously there's some very serious problems with it.
Q: Mr. Secretary, the President recently on campaign swings has been talking about how he would like to address the issue of middle class tax relief, especially for middle class families with children. Can you be more specific, perhaps, in what kind of plans the administration has now as it prepares for next year?
SECRETARY BENTSEN: Well, I must say, we have nothing definitive on that. I know the President would like to have one, certainly I would. The problem always is paying for it.
Thank you very much.
THE PRESS: Thank you.
END 1:30 P.M. EDT
William J. Clinton, Press Briefing by Treasury Secretary Lloyd Bentsen and Former Social Security Commissioner Robert Ball Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/269769