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Remarks of the President on the Budget Before Departing for NY (10/25/00)

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                              THE WHITE HOUSE

                       Office of the Press Secretary

Immediate Release                  October 25, 2000

                         REMARKS BY THE PRESIDENT
                               ON THE BUDGET

                              The South Lawn

10:55 A.M. EDT

          THE PRESIDENT:  Good morning.  I want to say just a few words
about the budget and the work we still have ahead of us, if we want all our
children to have a first-class education.

          Way back in February, I sent to Congress a budget that keeps
America on the path of fiscal discipline.  It would strengthen Social
Security and Medicare, pay down the debt by 2012, and make key investments
in education, health care, the environment and national security.  It would
also modernize Medicare with a voluntary prescription drug benefit
available and affordable to all seniors who need it.

          That was in February.  Now we've come to the end of October,
nearly a month past the end of the fiscal year, and we still have not seen
from Congress a completed budget.  Four times they've asked me for an
extension of time to finish the work.  Today, the latest extension runs out
and Congress is about to ask for another.  But from this point forward, as
I've said, I will agree only to a day-by-day extension, until Congress
finishes the job.

          From this point forward, Congress should work every day and every
night to put progress over partisanship, to make the investments in
education our schools need and our children deserve.  Congress should pass
a budget that reduces class size in the early grades; that contains tax
credits to repair old, crumbling schools and build new, modern ones; a
budget that invests in after-school programs that mean more learning, lower
crime and fewer drugs.  It should ensure the hiring of new, highly-trained
teachers, and help states turn around failing schools or shut them down and
open them under new management.  This Congress is not done, and this
Congress will not be done until it accomplishes these objectives.  We
should also work together to pass tax cuts for middle class Americans.

          You know, in budget talks the two sides often wind up talking
past each other.  It takes a little extra effort to reach across the
divide.  So that's what I'm trying to do today.  I'm sending an offer to
Speaker Hastert and Senator Lott that says, let's work together in good
faith to achieve common ground on tax relief.

          I've identified areas of agreement so Congress can pass a bill I
can sign -- tax cuts that preserve fiscal discipline, help our people save
for retirement or pay for long-term care, help build and repair schools,
and boost investments in our new markets, the places that have been left
behind in our prosperity.  These are tax cuts we should all be able to
agree on, tax cuts to help America's working families provide for the
things that matter most.

          There's also more to do in the last days of this session.
Congress should be working overtime to pass a voluntary Medicare
prescription drug benefit, to raise the minimum wage, pass a real patients'
bill of rights, expand health coverage for the American people, and invest
our Medicare resources wisely.  Not just or overwhelmingly in the HMOs,
including those that don't need it, but in teaching hospitals, home health
agencies, rural and urban hospitals, and other health care providers.

          Congress should also pass a tough hate crimes bill.  After all,
there's a bipartisan majority for it in both Houses.  It's pretty hard to
explain why it hasn't come to my desk for signature.  And Congress should
insist on and provide for fairness for legal immigrants and equal pay for

          These are our most pressing priorities.  We can make progress on
all of them.  There's a huge piece of new evidence -- just in the last 24
hours, there has been a truly bipartisan and historic agreement on
providing much needed debt relief to the world's poorest countries.  This
initiative was supported by a broad -- in fact, the broadest imaginable --
coalition of religious leaders.  You all remember when many of them came to
the White House just a few days ago.

          This enables America to do something that is good and just and
manifestly in our interests.  It will go a long way toward ensuring our
leadership for progress and prosperity in the 21st century world.  It is
something that will be very important to leave to all of our successors
after this next election, something America can build on for years to come.

          I am profoundly grateful to the leaders in both parties in
Congress for reaching agreement on this.  This is something every single
American should be very, very proud of.  And it is fresh evidence that when
we work hard to put our differences aside and find common ground we can, in
fact, do it.  I hope the leadership of the Republican Party will join me
and the Democrats to continue to do this, to continue to put progress above
partisanship.  And we'll get an awful lot done for the American people in
the next couple of days -- then they can go home and have a good election
over the differences.

          Thank you very much.

          Q    Mr. President, are you prepared to risk a government
shutdown if you don't get what you want?

          THE PRESIDENT:  I don't think it will come to that.  I mean, I
think this agreement yesterday -- this is really big.  This will be one of
the signal achievements of this Congress.  And it shows that, as has been
the case since we've been in this unusual relationship with the Republican
majority and a Democratic President, that at the end, we can still get a
lot done.

          So I hope it won't come to that and I don't think it will.

          Go ahead.

          Q    Mr. President -- excuse me -- the Immigration and Latino
Fairness Act is something you have been pushing for.  It's supposed to come
up in the State, Commerce and Justice appropriations bill.  How are the
negotiations going on between the White House and the Republicans, and will
you veto it, the appropriation, if it doesn't contain what you want?

          THE PRESIDENT:  Well, as I said, I hope we can reach agreement on
it.  We've made some real progress and the Republicans have come some way
toward our position on this.  I don't think it's enough, and I hope we can
do more.

          Look, this is a very large issue.  There are a lot of people in
this country who came here in good faith under adverse circumstances.
They've lived here, worked here, paid taxes here, established families
here.  And I believe we ought to go as far as we possibly can get this
Congress to go to legitimize their presence and to do the other things that
are in our initiative.  So I'm working, and I think that's all I should say
now.  We're in the process of negotiating this.

          Q    In the Middle East, can Yasser Arafat be considered a
reliable partner for peace while he is releasing Palestinian militants from
jail and actually giving them decision-making roles?  Can he be reliable?

          THE PRESIDENT:  Well, as you know, part of what the parties
agreed to at Sharm el-Sheikh was a certain specific set of security
measures which were, by agreement of the parties, kept confidential.  But I
think it's quite important that, as I think it was reported in the morning
press, that I had a conversation with Chairman Arafat, I talked with him
and Prime Minister Barak yesterday -- I talk to them several times a week
now -- and one of the things we need to do is to have people who are
interested in violence off the streets, and the people who are interested
in ending the violence out there doing what they're capable of doing.

          A big part of what the parties recognized at Sharm el-Sheikh was
that it's impossible to maintain this uneasy status quo, where we've come
so far in the peace process, but the big and most difficult issues remain.
We can't expect there to be a reliable peace process unless we can reduce
the violence.  That's the real answer to your question.  We would like to
see, and I think that the Israelis would like to see a resumption of the
peace process, but both parties have got to do what they said they'd do at
Sharm and get the violence down, so we can open up the possibility of peace


          Q    Mr. President, the Democrats are about to launch a concerted
campaign effort to discredit Governor Bush's Social Security proposals.
I'm wondering if you plan to participate in that effort.

          THE PRESIDENT:  Well, I haven't been asked to do that.  To me,
the major issue right now -- I had hoped we could get agreement on Social
Security reform and I thought that Chairman Archer and I could actually
make an agreement.  But neither of us had enough support in our caucuses to
do that.  And this is one of those big issues that I think will have to be
resolved in the next four years.

          So I decided to do the next best thing, which is to make sure we
could keep paying the debt down, and to offer the option to put about 10
years of savings on interest that we get because we're not spending the
Social Security taxes now, which we did from 1983 until a couple of years
ago.  We're not spending the Social Security taxes now, so they're
contributing to debt reduction.  That means our interest burdens are lower.
And what I think should be done at a minimum is that the interest savings
should be applied to Social Security.  That way you could take it out to
2054 and get it out beyond the life of the baby boom generation, when,
after that, the pressures on Social Security will begin to ease because
there will be fewer people retired in relation to the number of people

          Now, if they want to make other changes -- as I learned and Mr.
Archer learned when we tried to argue this through -- there will have to be
a bipartisan coalition in Congress.  And I hope there will be fresh energy
when you've got a new President, a new Congress, a new amount of time to
work on that.

          The central problem here is, there are problems there.  And I
think that the Vice President and Senator Lieberman and the Democrats in
Congress and the experts are perfectly capable of pointing them out.  What
I'm most concerned about is that we don't get anyone locked into something
that would take us back to deficits.  And you have to add up the cost of a
tax cut and a privatization of Social Security and all the spending
programs.  And if you do that, and the sum of it is more than $2 trillion,
you're in trouble, you're back in deficits, you've got high interest rates.

          That's the thing that I've tried to get the American people to
focus on.  We've got to keep paying down the debt to keep the interest
rates down, to keep the prosperity going.  But I think on the details of
the plan, that's something that should properly be left to the candidates
in this election.  And I think that Governor Bush can state his position,
the Vice President can state his, and the members of Congress on both sides
can argue it out without too much help from me.

          Q    Mr. President, do you think that Chairman Arafat can still
retain sufficient influence over his people to stop the violence in the
West Bank and Gaza?

          THE PRESIDENT:  I think the violence can be dramatically reduced.
I think that there are probably some people within the Palestinian
territories, and probably some people within Israel, that are not within
total control of Chairman Arafat or even the Israeli government.  But I do
think Chairman Arafat can dramatically reduce the level of violence.

          The problem, as I have been saying for years and years to the
people in the region, is that once you actually start a peace process and
people's expectations get built up, and you have a commitment to peaceful
resolution of these issues, violence is no longer a very good tool to
achieve political objectives.  It always, in the end, will be
counterproductive.  Why?  Because if you look at the pattern, what you have
to do is you stir the people up, you get the people all stirred up so that
they believe that violent reactions are legitimate.  And then you can't
just turn mass emotions on and off, like you can a water tap.  It's just
not that simple.

          So I think that it's very important -- I think what we did at
Sharm was to put at least a speed bump on the road to the dramatic
deterioration of the situation.  But I don't think that we should ask
ourselves whether he has 100 percent control, because the truth is, none of
us know the answer to that and nobody has 100 percent control of any
situation.  The real and fundamental question is, can the level of violence
be substantially reduced by a sustained effort.  If the parties do what
they agreed to do at Sharm, the answer to that is a resounding, yes.

          Yes, ma'am.

          Q    Mr. President, to follow up on that question and one other
question -- you said that you do believe he is capable of reducing the
violence.  So are you saying that he hasn't tried to do that?  And,
secondly, there was a poll out today in Israel that showed that if there
was an election today, Netanyahu would beat Barak 2-1.  And are you
concerned at all that in your attempts to be an honest broker and the way
the violence has continued that you've somehow sold out Barak, that he will
no longer be a leader in Israel in a few weeks, in a few months from now,
and that the peace process will inevitably be over once that happens?

          THE PRESIDENT:  Well, the short answer to your question is, no,
because he made the decisions that he made -- he made very courageous
decisions and he's in a difficult position now because he's getting the
worst of both worlds.  I mean, he reached out to the Palestinians and he
showed enormous courage in doing so.  And we did not get an agreement at
Camp David, although it was, on balance, quite a positive thing.

          I will say again, you can't maintain this status quo.  We either
have to shut the violence down and get back to the peace process, or there
is going to be at least a level of anxiety, mistrust and a worsening of
relations, which I don't think would be good for anybody.

          But I think that -- I will say what I said the day the Camp David
talks ended.  Prime Minister Barak knew what he was doing.  He took a big
chance.  He did it because after years in the Israeli military, he reached
the same conclusion that Yitzak Rabin reached, that in the end, the best
guarantee of Israel's security is a sustainable peace with all of her
neighbors.  He knew there would be bumps along the road and that there
would be points at which the process would be ragged.  He made a decision
that he was trying to go for the long-term security of Israel.  And events
in the next several days will determine whether or not we can get back on
that path.

          That's my reaction.  I think it can be done and I think the
parties can do it, and I'm going to do my best to see what I can do to be
helpful.  But we've got to get the level of violence down.  This peace with
the Israelis, and the aspirations of the Palestinians can in the end, only
be fulfilled by agreement.

          We called at Sharm for a commission to look into what happened,
to try to make sure it shouldn't happen again.  We can do that, but the
critical pillars for a good situation in the Middle East are the absence of
violence and the presence of negotiations and continued progress.  And
those are the things that all the people should be focusing on.  Those are
the things that I've been working on every day for the last couple of weeks

          Q    On the tax package, the Republicans yesterday said they are
considering including an increase in the minimum wage, which you want, and
a scaled back school bond proposal, which you also support.

          THE PRESIDENT:  A scaled back what?

          Q    A scaled back school bond proposal.  But they are also
considering including the Medicare giveback, which you've threatened to
veto.  Would that veto still hold if the tax package includes these
provisions which you support?

          THE PRESIDENT:  Well, it depends what the Medicare thing looks
like.  The only thing that bothered me about the Medicare issue is that we
were working along in a bipartisan way.  We had some differences -- they
want to give what I think is too much money to the HMOs.  They say they
need to do it because the HMOs are dropping people, dropping Medicare folks
from coverage in their HMOs.  But if you look at the provision, the money
goes to the HMOs without any guarantee of continued coverage for Medicare
patients who may have serious problems.

          So the thing that bothers me about it is, you have a lot of other
-- look, we all have acknowledged that in the Balanced Budget Act of 1997,
to achieve the savings we targeted we had certain specific changes in the
Medicare program which, number one, produced greater savings than we
estimated, or than the Congressional Budget Office estimated, and did so at
a cost to the health care providers which was unacceptable; and that there
were substantial difficulties for urban hospitals, for rural hospitals, for
the teaching hospitals, for nursing homes, home health providers, hospice
services, the whole range of things.

          And I have no objection to the HMOs being given consideration in
this bill.  The only point I tried to make is that if you give them as much
money as the Republicans do, you severely short the urban and rural
hospitals, the teaching hospitals and these other providers that I just

          So the question is, can we achieve some balance here?  I hope we
can.  This is a very important thing.  I sympathize with the Republican
leadership in not wanting to let the cost of this bill balloon out of
control.  And I offered to work with them on that.  That is something -- a
goal that we both share.  But this should be a question that's decided
strictly on the merits.  This is not a political issue with me.  You have
all these folks, they have people they have to care for.  We made a
decision in '98 to sign a balanced budget bill, and they made a decision to
pass it, which had specific changes in the Medicare program designed to
produce an amount of savings.  The savings were greater, and accordingly,
the loss to the providers was greater, and the quality of health care is,
therefore, strained.

          So what we need to do is just take this on the merits.  So I
don't want to turn this into a big political fight.  I just think this is
one where the facts should get out, and we should do what the facts
indicate is the best balanced thing to do with the money we have available
for all the providers.  And I simply don't think that their proposal does
that, or even comes close.  So I hope we can reach agreement on it.

          Thank you.  I've got to run.

                       END        11:15 A.M. EDT

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