Remarks at a Luncheon Hosted by the Forum Club in Houston, Texas

The President. Well, thank you all for that warm welcome back; and thank you, Dick, for the introduction, sir. I thank you and Dick Johnson for putting this little lunch together. I never saw such a wonderful crowd. They say that Texas is a state of mind, but it's still good to set both feet down on Texas earth and come back home to Houston. And I'm very pleased to be here.

This is my first trip back to the State since taking the oath of office some 55 -- 56 days ago. My mind raced back as I was coming in on beautiful Air Force One to about 29 years ago, approximately -- saw the medical center. And Barbara, I recall, was there awaiting the birth of our daughter, Dorothy. And now Barbara is not here -- she is not expecting, but our dog is. [Laughter] And I think her priorities may be slightly askewed, but she doesn't. [Laughter]

But in any event, I am pleased to be back at this Forum Club, which has really contributed so much to the public debate on the important issues of the day. And I am delighted that Bob Mosbacher is with me, a past president of the Forum Club, now handling a difficult assignment there as Secretary of Commerce -- not surprisingly for those who know him, and that's most of the people in this room -- doing a superb job. And let me just say this: It's nice to have a person at Commerce who understands firsthand what it means to have built a business, to take risks; who understands that excessive regulation can be counterproductive in terms of job creation in this country. And also on a very personal side, it is very nice to have someone who you can kick your shoes off with and discuss the problems of the moment. So, I'm delighted that he is here with us today, and you should all be proud of the job he is doing. In addition to Dick O'Shields and Dick Johnson, I want to thank Judge Lindsay, Mayor Kathy Whitmire, and Lee Hogan for being here and welcoming me.

And I take great pride in what's happening here in Houston and, indeed, in our State. Houston has clearly turned the corner. I've looked at the statistics, and they're impressive: 280 new companies last month and nearly 90,000 new jobs in the area in the past 2 years. And the unemployment rate is almost half what it was just 2 years ago. And best of all, the new Houston is being built on a very broad economic base. And I've come here to Texas to tell you that we're hard at work in Washington; we are making progress. By the way, I came to Houston to share that news with you because they already heard it out in Lubbock. [Laughter]

We're working to drive down the deficit. We can, indeed, we must; but we can bring Federal spending under control and into balance with our resources. And under our budget, we'll have $80 billion in new revenue in 1990. You don't touch the tax structure, and you have $80 billion more in revenues to the Federal Government. We can stay on track to meet these Gramm-Rudman targets, and we can do it without raising the taxes on the working man and woman of this country. The key to building a better America is realistic -- it's a realistic and workable budget, like the one we sent up to the Congress 5 weeks ago.

We're working now on a plan that will help developing nations cope with the burden of debt, a solution that promotes growth and stability in world markets. And frankly, it isn't just Latin America -- take a look at Africa; take a look at Eastern Europe. Other countries have staggering debt problems; and we of the United States have to take the lead; and indeed, under the [Secretary of the Treasury] Brady ideas at the end of last week, we have stepped out to take the lead in trying to bring some solution to that very complex problem.

We're waging a war on drug abuse on every front -- just gearing up now with our new drug czar in place -- more effective education and awareness efforts to dry up the demand for illegal drugs, tougher law enforcement and interdiction to cut off suppliers and put the dealers behind bars where they belong. It's not going to be done just by the Federal Government. I might say parenthetically that I do want to find a solution to the so-called AK - 47 assault weapon problem, one that protects the rights of the legitimate sportsman, but also protects the lives of our police officers who are laying their lives on the line for us every single day.

But as I say, this problem isn't a problem just for the Federal Government. I know that some may know the phrase, a Thousand Points of Light. In Washington, one wag called it a thousand pints of Lite, and I took umbrage with that. But I'm going to keep talking about a Thousand Points of Light because it is this volunteer spirit of American helping American that really has the most to do about solving this drug problem. And I salute Houston -- with Houston Crackdown, a program that is such an effort of elected officials joining leaders in the community and education and labor and business and whatever to do something about this.

Another problem: We're working to establish a 6-month training wage as part of a package that raises the minimum wage from $3.35 to $4.25 an hour. And let me be clear and send this message to those Members of Congress that might be tuned in: $4.25 is my first and last offer. There will be no compromise on that figure. Anything higher will actually cost jobs by raising costs for many employers and will have an adverse affect on inflation and on productivity. A training wage does just the opposite. It provides the now-jobless, especially youth and minorities, a chance, a handhold on the economic ladder, a means of moving up.

And we're working on a serious problem that Texans are aware of -- the threat to our financial system that's posed by insolvent savings and loans. Less than 3 weeks after taking office, we were faced with the enormity of this problem, and I announced a comprehensive set of proposals to take effective action on this problem. And we must clean up the S&L system so that the questionable practices and the outright illegalities that caused the current crisis will never happen again.

Nationwide, insolvent S&L's still in operation are incurring operating losses at a rate of about $300 million a month. That's almost $1 million during the course of this lunch. And if I speak too long, you can make that $2 million -- during the course of this lunch. It's a very serious problem. Some of these savings and loan -- the innocent victims -- have changed economic times, but some, an outright violation of the norms of reasonable business behavior. Three weeks ago, I sent the Congress a bill that will enable us to take action to halt the dollar drain and move forward on stabilizing our savings and loan system. It is a sound and comprehensive plan. It has been well received. And I want to see that bill passed with its central provisions intact within the 45-day timeframe which I have challenged Congress to act upon -- and there's no excuse for delay.

Once the legislation is enacted, we must turn our attention to careful and responsible handling of the assets of the failed S&L's. Let me be clear on a key point: Insured depositors, those across our great State and across this country whose deposits are insured, are not at risk. They are fully protected and will continue to be fully protected by Federal guarantees. Our solution must ensure the least possible disruption to local markets and, at the same time, keep costs to a minimum. And let me say clearly: We must see to it that those S&L officials guilty of criminal actions are pursued and punished for the losses that they've caused.

These are serious challenges, ticking time bombs that we need to defuse without delay, and we're trying to do just exactly that. These are by no means the only issues that demand leadership and prompt action. We're entering the 1990's, a horizon decade, threshold to a whole new century.

For people my age, and for people a good deal younger, the 21st century has been the place in our minds that we put all the fantastic ideas, all the discoveries and inventions we couldn't dream of experiencing in our own time. The 21st century was just another name for a future that seemed as distant as a voyage to the Moon. Here in Houston, we have a better sense of how we can cover that distance and transform a distant future into our destiny. The truth is the 21st century isn't far away at all. I graduated from school in the class of 1942. Our first graders today will be the class of 2000. The 21st century is here in our kids. The essential question today: What are we doing to prepare for the new world that begins 11 short years from now? And that's what my agenda is all about. Building a better America means laying the foundations today for the kind of future that we want.

Preparing for our future means investment in our economy and in our schools. It means safeguarding the environment against shortsighted actions that do long-term damage. It means finding ways to preserve and strengthen indispensable institutions like the family in the midst of social change. As I look at the fabric of society, and then look at the instability of family relationships, I see a real threat to our future. And so, a President, this President at least, should have everything he does be guided by how do we strengthen the American family? or put it in reverse: How do we keep from weakening the fabric of our society that is represented by the family?

Preparing our future means taking a long-range look at the international landscape to determine what policies and approaches will keep us free, prosperous, and at peace in the 21st century, as we are today. And speaking of freedom, it means formulating a multisource energy policy that, in the long run, will make us less dependent on the will of countries halfway around the world.

These aren't minor matters or unimportant issues. These are concerns that will determine what kind of world we live in and whether we as a people live up to our American ideals, and they're at the center of my agenda for the new American Century.

To prepare for the future, we've got to invest in our economy. We've got to create incentives for new investment and aggressive R&D programs that are catalysts to technological advance. And I have called for a permanent R&E -- research and experimentation -- tax credit to create that incentive and a 13-percent increase in federally funded science research. We've got to cut the capital gains tax -- and I've asked the Congress to join with me on this -- to spur the entrepreneurial activity that means new products, new industries, and new jobs. I've been hit in the political arena on this one, saying this is a tax cut for the rich -- no such thing. It is opportunity and hope for those that want a job and don't have a job. And that's what this capital gains tax differential will do if we can get the Congress to promptly move forward.

Free enterprise is the engine of growth that can lead us into the next century. And it's up to the Government to maintain a climate that is hospitable to growth, competitiveness, productive investment, one that gives free enterprise as much free rein as possible. And by the way, that capital gains tax differential I talked about will bring in, in 1 year alone -- estimate of the Department of the Treasury -- will bring in, in 1 year alone, $4.8 billion more in new revenue if we go forward and enact what I am calling on the Congress to do.

To prepare for the future, we must protect our environment. Whether we're talking about the disposal of nuclear or other hazardous wastes or the discharge of CFC's [chlorofluorocarbons] into our atmosphere, the United States -- on our own and more in concert with other nations -- must make a clean environment a top priority. And what I've done so far is show that this isn't talk; we are taking action. And incidentally, maybe some of you saw it? This morning I talked to the astronauts, the Discovery group up there in outer space. And the need for us to all act on the environment was brought home to me again today when, in the Oval Office, I found myself talking to that spaceship and hearing from the crew that from their very special vantage point, looking down on planet Earth, the need was very clear to those five people that we must protect the global environment.

To prepare for the future, we must encourage and improve education. We must recognize and reward excellence in education: in our schools, our teachers, our students. My merit proposals for teachers, schools, and our nation's best young science scholars will reward the best and encourage others then to follow their example. Our National Science Scholarships alone will provide 570 top students up to $10,000 a year to attend the college of their choice.

And we can also strengthen our schools by introducing an element of competition into education. Magnet schools give parents and students the power to choose their schools, and that will serve as a powerful incentive for schools to improve their performance. This has been tested and tried, and it works. And that's why I've urged Congress to provide $100 million to help with the startup costs for new magnet schools.

Preparing for the future means confronting the changing nature of our society. What are we doing in the age of the single parent and the two-career household to help the family survive and prosper? I've called on Congress to adopt a set of child-care initiatives aimed at strengthening the American family, giving parents a choice. I don't want to regulate grandmothers. I don't want to regulate things from Washington so that church groups can't get together and provide day care service. I don't want the regulators to push the churches and the private groups out of the child-care business. We must preserve choice for the parents and diversity so that the kids can go and be in these child-care centers that their parents want them to be in. Our 1990 budget requests a 20-percent increase in the funding of the very successful Head Start program and institutes this child-care tax credit that I've referred to for low-income households to make balancing the responsibilities of work and family less difficult.

But let me just parenthetically mention a problem. I sent a bill to the Congress yesterday with choice intact; it's a beginning. It can fit into a very tough budget on the spending side, and I think the initial year proposal is, say, a quarter of a billion dollars. And the very day that that goes up there, the Congress -- one of the committees over there on the Senate side comes out, or the House side -- can't remember which -- comes out with a budget ten times that much for the first year. And then they say, "What are we going to do about getting the deficit under control?" We've got to have some discipline in the Congress if we're going to meet the deficit needs and still start to provide the needs for the child care and other social causes that should really have a command on our resources.

To prepare for the future, we've got to map a national security strategy that ensures our freedom and gives due weight to each factor of change in the international scene. And that's the aim of this series of these defense and policy reviews that I've instructed my national security team to conduct. And some are saying, "You'd better hurry up. You don't want Mr. Gorbachev to capture the high ground with his speech at the United Nations, don't want him to mold public opinion further in Europe." Far more important is that we do a prudent review of our foreign policy, of our national security requirements, and then -- in concert with our allies -- move forward. We are prepared to lead this alliance, as the United States has in the past. But I am not going to be pushed into speedy action because Mr. Gorbachev gives a compelling speech at the United Nations, and I hope the Soviets understand that.

So, this is an American agenda for the long-term, and we aren't going to clean up the environment, turn our education system around, or create a more responsible business climate in one single day. But if we begin today and make steady progress, we will succeed. And in this kind of work, more is going on than meets the eye or makes the headlines.

The proof will come when we look back from the year 2000. And I'm confident we will be able to look back with pride on work we did to get ready for a new century provided we look forward today. We must enter the 21st century as a strong and trusted partner in the alliance of free nations and a frontline leader in the defense of freedom. We must enter the 21st century as a productive, energetic, and innovative member of the global economy, second to none in the technological competition that will determine economic leadership in the decades ahead. We must enter the 21st century as a nation whose people enjoy freedom, opportunity, and equality of life that fulfills the American promise: a society that draws its strength from the individual, the family, the community; and a government wise enough to respect those institutions as the cornerstone of our democratic system.

We've got work to do, work that won't wait, great work to ensure that the next century now on the horizon will be the American century. Thank you all very much. It's a great pleasure to be back, and I'll be glad to take a few questions. Thank you very much.

Decontrol of Natural Gas

Q. First off, of considerable interest is the topic of natural gas decontrol. Congress seems to be looking at this question again. And although it's been talked about much for several years, do you expect action this year, and will you actively work toward that goal?

The President. I am strongly for it; I've made this very clear to the Congress. There is a bill, I believe, being marked up on the House side right now. I think it has the best chance certainly in the last 20 years to get passed. And the administration will send no confusing signals on this one. I believe it is in our national security interest, as well as in the interest of freeing up markets that I've talked about here earlier on -- so it will be priority. And I have a feeling that it is more apt to happen than any time since -- well, certainly in the last 8 years that we've watched it and followed it and run into snags. But I'm for it; the administration is solid behind it. And the climate in Congress is much better today for this.

And some of it is environmental, and much of it is that people now realize we are becoming more and more dependent on foreign oil -- it's getting close to 50 percent now. And most people, even if they don't come from an oil-producing State or a hydrocarbon-producing State, understand that that is not in the national interest of the United States. So, I'm optimistic about it.

U.S. Space Policy

Q. Mr. President, could you comment on your feelings about the future of NASA, particularly with respect to the space station and a manned mission to Mars by the end of this century.

The President. On the space station, I am strongly for it. We have taken the steps, budgetwise, to go forward on that. I have not reached a conclusion on whether the next major mission should be a manned mission to Mars. And so, I'd have to say it's not on hold, but we're asking the space council that has been reconstituted -- or constituted now to come forward with its recommendations. The Vice President's chairing it. He'll be in Houston in about 2 weeks from now. So, no decision is made -- what happens beyond the space station itself, and I will make that decision when I get their recommendations. And I would have to say this as a word of caution: Even though we've increased -- or requested that NASA's budget be increased, there are constrained resources that I have to deal with as President, and so, I can't pledge instant commissioning of this follow-on mission to Mars.

Government Ethics

Q. Is the increased attention being given to the private lives of public officials and candidates a good thing or a bad thing for politics and government in this country?

The President. Well, I think there are excesses. I think there are intrusions into people's private lives that go beyond the public trust or go beyond one's ability to serve. And I don't like the excesses.

And I think you all here know how I feel about the recent proceedings regarding Senator Tower -- didn't like that because I think it was unfair. I don't think it is fair to a man who has been in public life and has served his country with honor to be tried by perception and rumor. That is not the American way. And people say to me, "Well, didn't it drag your administration down to stand with Senator Tower?" The answer is no, and I'm very pleased the Senate committee moved this morning on our new nominee, Dick Cheney. But the answer is: I wasn't about to move away from John Tower. People are entitled to fairplay; they are entitled to have the rumor laid aside and people to make up decisions based on fact, not perception. And so, whether it damages me 5 percentage points or 10 doesn't matter.

I think it is proper to have full disclosure, particularly on financial conflicts of interest. We've just received a report from a nonpartisan ethics commission with Griffin Bell and Judge Malcolm Wilkey of Houston as a matter of fact -- its Chairmen. There's some good recommendations in there. I want to have the highest possible ethical standards, but I think in some areas most people realize that we may have gone too far in terms of the intrusion on people's private lives.

U.S. Naval Power and World Peace

Q. Mr. President, we have time for one additional question. Would you discuss the future of the 600-ship U.S. Navy? Will we continue to rely on submarine-based nuclear defense?

The President. Well, submarine-based nuclear defense is and will continue to be a very important part of our deterrent. There's no question about that. There is nothing going on in the field of arms control thinking that would convince me to have anything other than to preserve our technology and our ability to deter war through preserving, strengthening that kind of defense.

In terms of the 600-ship navy -- it's a goal. I've been for it, will continue to be for it. But I have to defer now to this budget review and strategic review and administrative review that I've tasked the Defense Department to come up with. And it's serious business. They will report back soon, and then we'll have to make our budget choices. And so, I would have to defer answering how much more will be done on a 600-ship Navy within the next budget cycle. But as a goal, as an objective, I am for that. I believe naval power is a significant deterrent to aggression.

I might say this, inasmuch as that's the last question: We've got 11 grandchildren, and I expect, looking at the age lines on some of the men around here -- notice that one -- [laughter] -- some of you may have some grandchildren. When you get to be President, one of the main concerns you have has got to be how do you feel about world peace. What can you do to strengthen it? Are you optimistic or pessimistic about the world moving away from confrontation towards more peaceful resolution of problems?

We're in the process of reviews, as I said, and I've met Mr. Gorbachev several times. I am convinced that I can say to our 11 grandchildren we have a real opportunity now to make this year 2000 and beyond, that I was talking about, more peaceful. The changes in the Soviet Union are profound. Gorbachev himself will tell you when you ask him about perestroika -- he said it'll never go back to the way it was. Changes in China are profound. Barbara and I are just back from there. It will never go back to the days when the Soviet Union and China were in lockstep together. But we're facing a challenge in the United States -- we've got to figure it out. We've got to measure Soviet intentions and then come forward with proposals that will enhance the peace for our kids and our grandkids.

But I wanted to leave you, my neighbors and friends, with this thought: There is reason to be optimistic because of the changes inside the Soviet Union and some of the changes that you're seeing surface now in Eastern Europe. And you saw the relief of regional tensions in Angola. Hopefully it will come to be brought to bear in Central America. So, I would say to you, my friends and neighbors, if we do it right, if we keep strong and are not naive in it, if we don't make drastic cuts in the security accounts of this country, I think all of us can look forward over that horizon to a much more peaceful world with the United States still in the forefront of what's right for democracy and freedom.

Thank you all very, very much.