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Remarks to Business and Labor Leaders and an Exchange With Reporters on the Economic Program

February 25, 1993

The President. Thank you very much. To all the business and the labor leaders who are here, and to Representative Clayton and the many Members of the House whom she represents so ably. Let me begin with a simple thank you to all of you for your support of our common efforts to turn our country around and put our Nation on the right track.

For too long we have seen business and labor divided over more issues than we see them united on. Part of that has been occasioned by the incredible difficulties of our economy. When people believe there is a shrinking pie, they're more likely to be fighting over that. Part of that has been occasioned by the fact that we have not been on a great national journey together in which we could all feel that we were a part, making our equal contributions, reaping our equal rewards.

I'm very encouraged by the business-labor partnership that we see manifested here today, by the fact that it represents a commitment to ending gridlock and to beginning change, and deeply impressed by the letter which Representative Clayton has brought here today by the people whom I think in many ways are most representatives of the American people: this new big class of freshmen Congress men and women who are out there, just as Vice President Gore and I were last year, criss-crossing the country in a beginning effort, listening to people and their concerns and their hopes. So I'm very, very happy about that.

If I might, I'd like to close just by emphasizing three or four of the critical elements of this economic plan and why I think they are worthy of the support of this distinguished group of Americans. Everyone knows we have to bring the deficit down; it has become the dominant fact of all the budgeting of the Federal Government. But there are those who say, "Well, how can you do that. You're just coming out of a recession, and traditional economic theory holds that the last thing you want to do is to slow down a recovery by closing a deficit."

That is, ever since the Depression, our country has operated on an economic theory that said when times were slow, there should be more Government spending; when times were great, then you could bring our accounts into balance. The problem is that for more than 20 years we have been building in a structural deficit into our Government, one that robbed the National Government of that flexibility, the flexibility to tighten up in good times to slow down inflation, and to invest more in bad times to put people back to work.

And our strategy now, I think, is actually supporting an economic recovery in bringing this deficit down because you can see the decline in long-term interest rates which means that borrowing is cheaper and which means that millions of Americans in their personal capacities and as business persons are going to refinance their debt which will free up cash to be reinvested in economic growth. So I believe this strategy is expansionary.

I also would make a couple of other points if I might. We are changing fundamentally the direction of Government spending itself, moving away from spending for consumption towards spending a higher percentage of the people's tax dollars on investment. It is simply not true that all Government spending is equal. Some investment will have a much bigger reward in terms of jobs and incomes than spending more money on the same program.

Finally, we are looking at ways to basically make the Government itself work in a very different and more efficient way. One of them has already been alluded to by Kathryn Thompson. We will be announcing in the near future some efforts by this administration to ease the credit crunch on small business. We are also trying to change the way the Government itself operates and the regulatory framework to do things that will achieve objectives in a better way.

We believe we can promote a clean environment and economic growth with the right kind of regulatory and investment climate. We believe by changing the way the Government itself does business, we can give the American people a much leaner Government. We think that the White House staff cuts and the reorganization are simply an example of what we can do throughout the Government, given time.

So I appreciate the support for this program. And let me reiterate, I am not simply interested in raising more revenues. I don't want new taxes unless we're going to have spending cuts, unless we are going to change the nature of Government spending toward more investment, and unless we're going to change the way the Government itself operates.

This is a whole program that will fundamentally give us an end to gridlock and the change we need. And I thank these people who are here. They are reflective of the kind of unity we need in America to move this country forward. Thank you very much.

Q. How committed, sir, are you to the stimulus part of your package? It's now been delayed another month, perhaps; your budget is not even going up until April 5th. A lot of economists say that if it gets delayed much longer, it won't even help the economy. Only one of the preceding speakers even mentioned this stimulus package. Just how important is this?

The President. Yes, that's not true. At least one of them did mention it first. And secondly, I think it is quite important. I think it would be a big mistake—let me just give you—it will do what it's designed to do later in time for everything except those things that have to be in place this summer. And I'm hoping that we can get the kind of—a lot of the Members of Congress are looking for a way to demonstrate to the country that they don't want to raise more taxes without cutting spending. And we're working on giving them an opportunity to do that. I agree with that. I think that's fine.

But there are some things that are time-sensitive in this stimulus package. The most obvious and apparent one is the summer jobs program. Nearly every person I know, including an enormous number of business people who are in and around cities like Los Angeles or Chicago or New York or other cities, believe that the prospect of being able to provide nearly 700,000 summer jobs in a framework in which we can then get business people together to work to provide more jobs—and one of the people here on this platform today has already told me that he wanted to get involved in that—could be a major statement this summer that we are trying to turn some things around in the more depressed areas of our country.

There are some other things that are somewhat time sensitive, but the main thing is we need to be investing more money at the same time that we are bringing down this deficit so that we'll be creating some jobs. The traditional economic theory is that if you reduce the deficit, you're going to slow down the economy and undermine the ability to create jobs. I just can convince—that's wrong now because of the vast accumulated debt. If you can keep interest rates down, you're going to speed up the economy by putting more money out there.

But I think the stimulus is important, and I intend to continue to support it.

Q. Mr. President, I was struck by the fact that of all your speakers here, they all said, "We support the package, but we'd like changes in the area that affects us." Isn't that what you've been warning against? That the tax increase—

The President. That's not what they said. That's not what—only one of them said that, I think. And I think that, for one thing, the very fact that they're here supporting it, knowing that they'd all like changes in something that affects them, is the very point I've been trying to make to the American people.

If you look at this, if you look at this, if every person looks at this through the mirror of what is best for you today, there will always be something in here that doesn't quite work. The thing that makes this work is that it is a package in which everybody forgoes something they would like and gets something that they would like, but that in the main it moves the country in the right direction.

The Vice President. Could I add something to that?

The President. Yes.

The Vice President. You know, Lod Cook started off by singling out the two provisions which you would expect him to oppose in the old model. And he singled those out as things that he supported. And many of the others have said, privately and publicly, that they strongly support the package in spite of the fact that it contains elements that they would not like to necessarily single out by themselves but as part of a package it makes sense for the country.

Q. Would you be willing to put forth more spending cuts before your budget goes up? I know you called for the Republicans—

The President. Like what? Like what? I mean, unlike a lot of these other people, I worked for weeks and weeks and weeks on this budget. What I said was, if they had more spending cuts they thought were good ideas, I'd be happy to embrace them, that I intended for the entire duration of my term here to continue to look for more spending cuts. If I find more that I think are worthy, I'll be glad to incorporate them.

But let me just say, I have a difficult time taking these people seriously, who say we should have more spending cuts, who were here for the last 12 years. Where were they? I don't mind; anybody can say whatever they want about more spending cuts, but why are you asking me? Why don't you ask them? They're going around saying, "I have the list of spending cuts that I will discuss with somebody at some later date."

Q. They're saying that you're suggesting many spending cuts which have been up on the Hill for years and that these aren't any new cuts and these are— The President. If we pass them, it will be new. [Laughter] They've been up there. If we pass them, they will be new.

Q. You said earlier you obviously don't like to raise taxes. Are you ready to acknowledge at this point that you will have to go back to Congress and ask for more tax increases for the health care reform package? And would you also comment on a report that you've dropped the idea of taxing benefits?

The President. I haven't picked any tax up, so how could I drop—you can't drop something you didn't pick up. So I won't comment on something—if I pick something, I'll tell you.

I can say this: I'm not ready to admit that I think that the people who have paid the bill for health care in the 1980's should turn around and pay more right now. We're spending 14 percent of gross national product. You do have to find some way to recover some revenues to cover people who now don't have coverage, if the Government pays for the coverage. And that's an important part of stopping the cost shifting, which has led to so much increase in private insurance.

But there are lots of options we are looking at now which wouldn't necessarily increase middle class tax burdens. There are a whole range of options for dealing with this, which is why I asked you to let us finish this process of review before we try to pick it apart.

There was a huge transfer of wealth in America in the 1980's away from everything else to health care, to pay more for the same health care. Most of it went into paperwork, insurance costs, extra procedures by providers, and duplication of expensive equipment, and emergency care, partly due to the absence of primary and preventive care. If you correct all those things and you don't change the present spending patterns, that will create a huge windfall to people whose pricing structures have all that built in. There are all kinds of things that we might be able to do to solve this problem, short of having health care become even more expensive for people who are paying 30 percent more for it than anybody else on Earth.

Q. [Inaudible]—that burden middle class. Does that rule out sin taxes then?

The President. I think health-related taxes are different. I think cigarette taxes, for example, are different.

Q. Why?

The President. Why? Because I think that we are spending a ton of money in private insurance and in Government tax payments to deal with the health care problems occasioned by bad health habits, and particularly smoking, which is costing us a lot of money.

Q. [Inaudible]—you stand on the cuts? What kind of cuts would be considered? I know you're hearing a lot of input. You stressed the importance of input. In that input—

The President. I haven't really been getting a lot of input. That's the thing. A lot of people keep talking about it; I haven't been getting a lot of specific input. A lot of folks say they want overall caps. Overall caps are another way of saying, let's take Social Security benefits away from people even though Social Security is producing a $70 billion—$60 billion-plus surplus in taxes. Or let's take Medicare benefits away from middle class Medicare beneficiaries instead of reforming the health care system.

That's basically the only things I've heard since then. If somebody wants to come forward with something else specific—now, there are some people who—let me just be also fair. Some of the people in my party have been somewhat more specific about some of the cuts they want that I honestly disagree with, and there ought to be a debate on that in Congress. Some of them want me to cut defense more. I've already had to cut defense more than I pledged to do in the campaign because it appears that the last budget which was adopted by Congress had defense cuts in it which weren't real. So I don't think I can cut any more right now. The Congress will be free to debate that.

Some people think that we should abolish the superconducting super collider or end the space station program, but I honestly don't agree with that. I thought about those programs and I debated them, but at least those are specific, and they can be debated on the floor of Congress. But these general "cap this, blanket that," I think people ought to say what the cut is and who will be affected by it and be very specific. Thank you.

NOTE: The President spoke at 11:02 a.m. in Room 450 of the Old Executive Office Building. In his remarks, he referred to Representative Eva M. Clayton, who represented the newly elected Democratic Representatives, and Kathryn G. Thompson, chairman and chief executive officer, Kathryn G. Thompson Development Co.

William J. Clinton, Remarks to Business and Labor Leaders and an Exchange With Reporters on the Economic Program Online by Gerhard Peters and John T. Woolley, The American Presidency Project

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