E X E C U T I V E O F F I C E O F T H E P R E S I D E N T
THE WHITE HOUSE
Office of the Press Secretary
PRESS BRIEFING BY GEORGE STEPHANOPOULOS The Briefing Room
2:00 P.M. EST
MR. STEPHANOPOULOS: Good afternoon. As you know, the President will be speaking to the California Economic Conferences shortly. So why don't we get started.
Q George, can you clarify what the President was upset about during his recent tour? He was overheard losing his temper with an aide.
MR. STEPHANOPOULOS: I'm not sure. I'll have to check. I'm not aware of that.
Q The stock market appears to be down some 70 points today. Is this a reaction to the President's speech last night?
MR. STEPHANOPOULOS: I don't think so. I think the stock market, as you know, has climbed since the President was elected in November. There are often day-to-day fluctuations. We're watching it, obviously. But I would also point you to the bond market which has reacted quite well to the President's economic plans, and that's what's important -- making sure that we get long-term interest rates down so we can have real investment in this economy.
Q Is the President lowering the threshold for the socalled millionaires' tax?
MR. STEPHANOPOULOS: We're going to announce the details tomorrow night. The President will be announcing the details tomorrow night, but as he said last night, 70 percent of the revenues in this package will fall on those who earn over $100,000.
Q Could you take this opportunity, though, to perhaps knock down the story that this is now $250,000 as opposed to a millionaires' surtax?
MR. STEPHANOPOULOS: No.
Q You're not going to knock it down?
MR. STEPHANOPOULOS: No. I mean, the President will have the details tomorrow night.
Q What about the Republicans who say this is much too heavily weighted on the tax side and not enough on the spending side?
MR. STEPHANOPOULOS: We say that there are real spending cuts in this package. As we said, there will be over 150 specific spending cuts throughout the package, over 100 of those specifically on nondefense spending. And these specific budget cuts will save taxpayers more than $100 billion in nondefense spending alone over the next four years.
Q That's a total?
MR. STEPHANOPOULOS: Yes.
Q Of $100 billion?
MR. STEPHANOPOULOS: Of $100 billion in nondefense spending over four years.
Q Can you explain how you define -- I'm a little confused because I saw a briefing in which Dee Dee defined increasing the tax on Social Security benefits as a cut -- as a spending cut, not as a tax increase. Can you give me a working administration --
Q It wasn't Dee Dee, it was George.
Q Oh, maybe you did it. Can you give me a working administration definition of what's a cut?
MR. STEPHANOPOULOS: I don't know exactly how this is accounted for in the congressional budget documents, but I think that you would have known. Had the President proposed a cut in Social Security COLAs, which is far more extensive than increasing the tax rates on Social Security income over $32,000, it clearly would have come on the spending side. This if are less onerous than that and it affects a far smaller percentage of people on Social Security.
Q a current tax?
MR. STEPHANOPOULOS: Again, I'm not completely sure. We're going to have the budget documents out on Thursday.
Q Well, if I could just follow up on that for a moment. The more than $100 billion figure that you cited, does that figure include the Social Security tax
MR. STEPHANOPOULOS: I don't believe so, but I'd have to double-check.
Q That figure involves -- does that figure only involve discretionary spending or does it also include the entitlement?
MR. STEPHANOPOULOS: Again, I'm not positive. I believe it's the discretionary, but I'm not 100 percent sure.
Q You've been using a figure of in the ballpark of $500 billion for the total size of the package.
MR. STEPHANOPOULOS: I believe this is just the nondefense discretionary spending.
Q So that's about 20 percent of the total package?
MR. STEPHANOPOULOS: Yes.
Q And defense is roughly another --
MR. STEPHANOPOULOS: We don't have the final percentages of that yet.
Q Well, the figure that the President used during the campaign that's been used since is about $80 billion.
MR. STEPHANOPOULOS: No. I'm not sure of that.
Q But would it be fair to say that the combined domestic --
MR. STEPHANOPOULOS: There would be a rough balance between the spending and the tax provisions.
Q But it looks like you're talking about in the range of about $180 billion in defense and nondefense spending cuts out of a $500 billion package. Is that about right?
MR. STEPHANOPOULOS: Again, we'll have the specifics tomorrow night.
Q Is there a report today on Sessions?
MR. STEPHANOPOULOS: Excuse me?
Q Do you have a report today -- a decision on the FBI director?
MR. STEPHANOPOULOS: Nothing new on Sessions today, no.
Q George, Dee Dee said this morning that the tax impact is going to be felt on people with incomes of $30,000 a year or more -- apparently individuals, but that 70 percent of the revenue is going to come from individuals or families making $100,000 a year or more. If you're talking about households with $100,000 worth of income, doesn't that shift that main burden much further down into the middle class?
MR. STEPHANOPOULOS: I don't know. It still is in -- I think that we still would be under 10 percent of the total population will be bearing 70 percent of the burden.
Q What do you mean by that?
Q apply to families or individuals -- your $100,000?
Q Are you talking about families or are you talking about individuals?
MR. STEPHANOPOULOS: It will be anybody over $100,000. When you take all the population over $100,000, they will absorb 70 percent of the revenues.
Q whether it's individuals versus families?
MR. STEPHANOPOULOS: I think it's just the population. This is not necessarily an income tax increase on individuals or families over $100,000; it's the overall burden.
Q Are you talking about individuals of $100,000 or families with $100,000?
MR. STEPHANOPOULOS: We're mixing apples and oranges here.
Q No, no --
MR. STEPHANOPOULOS: No, no. It's not a --
Q If you're talking about a percentage of the total population, are you counting children and --
MR. STEPHANOPOULOS: It's just every percent of those -- all individuals earning over $100,000. That population will absorb 70 percent of the revenue impact. That is not to say that everybody over $100,000 will get an X percent increase in their income tax. It just means that when you look at the distribution of all the tax benefits and all the tax increases, 70 percent will fall across this population.
Q And a family of $30,000 would not be affected? In other words, the $30,000 that you mentioned earlier this morning, that was individual income, not family?
MR. STEPHANOPOULOS: Yes. Generally families under $30,000 will not have increased revenues.
Q Families or individuals?
MR. STEPHANOPOULOS: Again, as long as you --
Q It makes a difference --
MR. STEPHANOPOULOS: No, no it doesn't.
Q Because you could have two people earning $30,000. That's a $60,000 family, but each individual has $30,000 income. So is this a family with only --
MR. STEPHANOPOULOS: Family incomes. It was families under $30,000.
Q George, with the $100,000 then, if you have two people each earning $60,000, together their income is $120,000. Are they or aren't they affected at your $100,000 level?
MR. STEPHANOPOULOS: Well, clearly they would be affected. But there's no necessary formula. I mean, there's no set formula on how much they would pay. This is the overall impact. You're taking the gross revenues that are coming in.
Q I understand, but then you are saying family joint filing income of $100,000 or more is in the category paying 70 percent.
MR. STEPHANOPOULOS: No. No. No, not at all.
Q Are we talking gross or taxable incomes?
MR. STEPHANOPOULOS: They will not be subject to a 70 percent rate.
Q No, no --
Q that is paying overall 70 percent.
MR. STEPHANOPOULOS: Yes, yes.
Q So on an individual basis, you can affect people
with incomes individually of $60,000 or $50,000 a year if there are two of them, or $20,000.
MR. STEPHANOPOULOS: Well, depending on how they file. Again, it's not necessary --
Q Let's go back to the original question. You're talking families then, even --
MR. STEPHANOPOULOS: Right, exactly.
Q And are you talking gross or taxable income?
MR. STEPHANOPOULOS: I believe this is gross income.
Q There's a story that you may ask for a second round of tax increases to pay for the health care reforms in the coming months.
Q He'll never get it. He'll never get it.
MR. STEPHANOPOULOS: The President hasn't made any determination on that yet.
Q Is that something that's under review?
MR. STEPHANOPOULOS: The task force will report by May.
Q Originally, it was said that the 31 percent to 36 percent increase would affect those with incomes over $200,000. The Wall Street Journal said today it would be those with incomes of $140,000. Is that right?
MR. STEPHANOPOULOS: Again, that number in the Wall Street Journal was taxable income, and that will hold on the tax increase.
Q George, is it correct that this package will include no excise tax increases on consumer goods like tobacco and alcoholic beverages? Is it accurate that this package will include no excise tax increases on consumer goods like cigarettes and alcohol?
MR. STEPHANOPOULOS: I don't believe that it will, no. But the President will have the announcement tomorrow.
Q George, is it the President's feeling, since apparently individuals earning as low as $50,000 will bear the burden if there are two of them in a household --
MR. STEPHANOPOULOS: Again, I really don't think we can calculate the way you're calculating. You take -- all of the revenues that are coming in will fall across this line. The bulk --over 50 percent will fall on incomes over $200,000. The figures for the income tax increases are related to taxable income.
Now, the other revenues in the package could fall across the spectrum, but it is the incomes over $100,000. You can't then just take -- divide it in half and say that each of these will then be part of that 70 percent. There will be different impacts. But when you take the population of individuals earning over -- of incomes over $100,000, they will be, in aggregate, bearing the burden of the 70 percent.
There is no set formula that you can then break down to make the kind of calculations you seem to be taking from this.
Q If you gave us your calculations based on what the President said last night, we'd be happy to -- I mean, the problem here is he's the one who used the figure, which any normal person hearing him last night is going to say, how does it affect me? And before you can know that, we have to know gross, taxable, family, individual -- all those things go into that calculation. Will we get those tomorrow?
MR. STEPHANOPOULOS: We will definitely --
Q How about today?
MR. STEPHANOPOULOS: We will certainly give them tomorrow. (Laughter.)
Q As long as you've already gone on the record discussing it this morning, let's try and get it cleared up while we're still --
MR. STEPHANOPOULOS: That's fair. I think that is fair.
Q I still have my question, however, which is, at $100,00 or $120, 000 even, is it the President's opinion that individuals who make $50,000 to $60,000 a year no longer in the middle class?
MR. STEPHANOPOULOS: Not at all. No, not necessarily so.
Q Will those individuals not -- quite possibly fall into that aggregate you talked about that's going to bear the 70 percent brunt?
MR. STEPHANOPOULOS: Again, not necessarily, no.
Q Why would they not?
MR. STEPHANOPOULOS: Well, if an individual is making $50,000 --
Q I understand, yes, one individual who is doing that. In a household where you have two individuals who are making $50,000 each, that comes into the 70 percent category.
MR. STEPHANOPOULOS: You just can't necessarily make that calculation. They would not necessarily be subject, for instance, to the higher income tax rates, depending on how they filed. It would depend on their behavior when you talk about the other revenues. It's just not that kind of a simple calculation.
Q That's what we're trying to figure out, because Dee Dee this morning was saying individuals making $100,000 or more, or households making $100,000 or more.
MR. STEPHANOPOULOS: They could be included in that. When you take the aggregate of all the people making over $100,000, they will bear 70 percent of the burden. There is no set definable way that you can pick out any individual or family in that group and say necessarily how much more they're going to be paying or how much their burden is going to be going up.
Q When you came up with this number of 70 percent, the 70 percent of the burden would be borne by these people, were you thinking of tax returns showing $100,000 or more in taxable income or in gross incomes, or individuals, regardless of what the tax --
MR. STEPHANOPOULOS: I believe it's the tax returns.
Q A 1040 that says $100,000?
MR. STEPHANOPOULOS: Yes. I think that's the way the Treasury Department generally produces the distribution tables.
Q If you're having this much trouble explaining this to us, how are you going to sell it to the American people if they don't know how it's going to affect them?
Q They do.
Q They're smarter than we are. (Laughter.)
MR. STEPHANOPOULOS: I think we will put out all the details tomorrow and Thursday and that it will be clear.
Q But you already started the sales job last night.
MR. STEPHANOPOULOS: Right. And it starts out the President has said very clearly he is going to cut spending, he is going to increase taxes on those -- generally, the bulk is going to fall on those earning over $100,000. The American people understand that.
Q George, once again last night the President used this number of 500,000 jobs he said that would be created. You indicated yesterday that was a result of the stimulus ingredients alone that will be in the supplemental and also in the reconciliation with regard to taxes. Does that count only the positive effects of that and none of the possible negative effects of higher taxes?
MR. STEPHANOPOULOS: We don't see the negative effects in '93 and '94 from the stimulus package.
Q Are you telling me that you're going to raise tax rates and raise energy taxes, and there are no negative effects, that there are no elements, no parts of this economy where economic activity would be depressed by doing that?
MR. STEPHANOPOULOS: We believe that generally this package will have a stimulative impact.
Q I understand that, George, and I don't dispute that. All I'm trying to ask you is whether that number, 500,000 is offset in your calculus by any loss of jobs that might occur as a result of higher taxes. I mean, this is not a very controversial economic notion that when you raise taxes in a given area that you depress economic activity.
MR. STEPHANOPOULOS: But we do not have any estimates on job loss from this proposal, no.
Q So what you do is you have estimates for jobs created by the things you believe will create jobs, but no estimates of job loss on things that might cost jobs?
MR. STEPHANOPOULOS: We don't believe this will cost jobs, we believe it will create jobs.
Q It will cost no jobs?
MR. STEPHANOPOULOS: We believe it will create jobs.
Q Can you understand how difficult that is for somebody to accept, that you count the positive effects only and no potential negative effects?
MR. STEPHANOPOULOS: Well, we say look at the whole package, and we think overall it will create jobs, absolutely.
Q Well, I think overall it will, too, but is it overall -- are you going to net out 500,000 jobs on this, or is it going to be 500,000 minus some yet to be determined or estimated number of job loss?
MR. STEPHANOPOULOS: I don't have any estimates of job loss. I believe that we will create 500,000 new jobs.
Q George, if you gave us more detail on the BTU energy tax, then we -- presumably, that is the tax that will affect people the greatest beyond the income tax increases for the richer people. That's how the middle class gets into paying more taxes, correct? And the Social Security tax --
MR. STEPHANOPOULOS: I mean, the President will have those details. We will have all the details.
Q What other components would there be to the increase in the middle class tax bill then, apart from an energy tax and Social Security -- higher Social Security tax?
MR. STEPHANOPOULOS: I don't know necessarily of any that would call for more increases, no.
Q Can you walk us through the process that you hope the average American will use at the end of this process, when it all kicks out of Congress? How will they know things are better? What standard should they look for? What yardstick should they --
MR. STEPHANOPOULOS: Well, when you look at the package look and see was spending cut, did government take its hit first, did everybody pay in proportion to what they could afford to pay, are there incentives here for creating jobs, are there real credible investments in the things that will make us healthier as a society -- in jobs and education and health care? And look at the whole package.
Q But is there any gauge that you're using? For example, increased investment by a certain percentage? Decreased unemployment by a certain percentage? Is there any standard that people can look at and say "yes, this really did make a difference"?
MR. STEPHANOPOULOS: I think in general terms, look at are we creating more jobs? Are we on the path towards better incomes in the future? Are we reducing waste in government? Is the deficit moving in the right direction?
Q So a turn in the deficit?
MR. STEPHANOPOULOS: A turn. Absolutely.
Q The President talked about 500,000 more jobs. Are you talking about jobs like at this photo op this morning where there were 30 jobs created for a $3 million project? Or what is he talking about?
MR. STEPHANOPOULOS: Well, that would be part of the package. And we expect that the infrastructure improvements can create over four years over 150,000 jobs. We also expect that the
bulk of the jobs will be created by the private sector tax incentives like the investment tax credit.
Q George, on another subject, did you guys turn off the feed this morning after the President cursed out his aide? Do you feel that the White House has a right to turn off the feed if you don't want people to hear what you're saying?
MR. STEPHANOPOULOS: I just got one sense of that before I walked in. I'm not aware of what happened and I'll find out. I don't know if he was -- if we were turning off the feed anyway. I just don't know.
Q Philosophically, the White House -- the feed is paid for with public money. Do you feel the right to cut it off? Do you sort of like live by the feed, die by the feed? (Laughter.) Do you feel a right --
MR. STEPHANOPOULOS: No. We provide feeds on a periodic basis, on a regular basis, and we'll continue to do so.
Q If I could just follow up on this job question for a minute -- it's not clear to me whether you and Brit are actually disagreeing about something or not. (Laughter.)
Q They are.
Q It may be a net figure.
Q Are you simply saying that overall when the package is all done, the net job increase is going to be 500,000? Or are you saying -- there are clearly some things in the package that will cost jobs. You're saying 100,000 fewer jobs in the federal government over the --
MR. STEPHANOPOULOS: That's over the long term, right.
Q I know. But are you saying that the whole thing nets out to 500,000 plus --
MR. STEPHANOPOULOS: No, I'm saying the stimulus package on its own should create 500,000 new jobs. We expect to create far more through the long-term investment package. But we don't have a solid estimate on the exact number that can be created by the longterm investment package.
Q So you're saying the short-term stimulus package will create 500,000 jobs once it's all finished, and you don't know what the job figure is for the long-term?
MR. STEPHANOPOULOS: Exactly. We expect it to be far more, but we don't know the exact number.
Q 150,000 figure then?
MR. STEPHANOPOULOS: That's just on the infrastructure investments.
Q Is that part of the 500,000?
Q And the short-term --
MR. STEPHANOPOULOS: No, no, no, no. The 150,000 is part of the long-term infrastructure investments. We expect to
create about 58,000 through the stimulus package in '93 and '94.
Q The 150,000 not part of 500,000? The 500,000 is over what period of time?
MR. STEPHANOPOULOS: The 500,000 is the entire stimulus package '93 and '94.
Q And 150,000 is what?
Q This story cannot be written. (Laughter.)
MR. STEPHANOPOULOS: The 150,000 is the infrastructure over four years. And the 58,000 is part of that, right.
Q Do you have a separate number over four years altogether for the long-term package? You don't.
MR. STEPHANOPOULOS: Not for the entire long-term package. Simply for the infrastructure investment.
Q And 150,000 is --
MR. STEPHANOPOULOS: The 58,000 is the subset of the 150,000.
Q is not a subset of 500.000?
MR. STEPHANOPOULOS: And a subset of the 500,000.
Q Oh, it is?
MR. STEPHANOPOULOS: Right.
Q The 150,000 and 500,000 are separate?
MR. STEPHANOPOULOS: Right.
Q And what's the 150,000 from? I'm sorry, forgive me.
MR. STEPHANOPOULOS: The 150,000 is the overall investment in infrastructure over four years -- highways, roads, bridges.
Q And that's different from the 500,000?
MR. STEPHANOPOULOS: The 58,000 of the 500,000 -- he's got it. Fifty-eight thousand is the subset of both 500,000 and 150,000.
Q George, yesterday morning we were told that the short-term stimulus package has reduced 200,000 jobs. And then two hours later the President at a photo opportunity said 500,000 jobs.
MR. STEPHANOPOULOS: The 200,000 only included the spending portions and did not include the tax -- the investment tax credit incentives.
Q Is 500,000 a total accurate --
Q Is the 58,000 a subset of 200,000?
Q -- or is there a range?
MR. STEPHANOPOULOS: Yes.
Q George, is there a range that you're working from that could create between this many and 500,000 and you're taking the top figure?
MR. STEPHANOPOULOS: No. We expected the final estimate is about 500,000.
Q George, on incomes, how does the White House define middle class?
MR. STEPHANOPOULOS: I'm not going to get into that.
Q But if you're talking about upper income people, taxing the rich first and so forth, obviously you have an idea in mind of what constitutes rich and what constitutes middle class.
MR. STEPHANOPOULOS: I think clearly the 70 percent earning over $100,000 is basically the wealthier Americans.
Q So $100,000 -- a family earning $100,000 a year is a wealthy --
MR. STEPHANOPOULOS: I'm not going to put a numerical figure on that. We think that generally people who are working hard and who are paying their taxes, playing by the rules, are part of the middle class. That's not to say that's to the exclusion of everybody else, but we're not going to get into the game of putting a hard number, and then you say what's up and what's down and who is above that and who is below that.
Q George, would you say the American people understand what you're saying when you try to sell it to them? (Laughter.) What exactly are they going to understand? That things are going to be better soon?
MR. STEPHANOPOULOS: I think they're going to understand several things. Number one, that the government is being responsible with their money, for a change. Number two, that there are going to be direct benefits from the kinds of changes we propose. And it's going to be direct benefits through increased investment in children, in health care, in education and that they are going to see the difference in their lives, that they are going to look at the whole package and say, yes, this is fair. Because I may be asked to make a contribution, but everybody else is being asked to make a contribution as well. And those above me are not getting off scot-free as they may have in the past.
And, number four, that we are making an honest effort to really change the way the government works. And, finally, that, through all this, we're going to bring the deficit down, which can help create jobs in the future, which can help standards of living not only in the present but in the future, and help protect the American Dream for their kids.
Q Sounds as if you're saying is not that people will be looking at their pocketbooks and judging your package, but they will be looking at your intentions and judging it.
MR. STEPHANOPOULOS: No, more -- they will look at their quality of life and the direction that the country is going in. I think that we expect that there are going to be pieces of the package that people can say, well, that might be taking something from me, I might be having to give a little more here, but look what I'm getting in return. I am getting better roads and bridges, I'm getting better schools, I'm getting better health care. And overall, we're building
an economy that will work for everybody in the future.
Q The new taxes would take effect in the coming fiscal year, assuming everything passes.
MR. STEPHANOPOULOS: Assuming everything was passed.
Q So that would mean as of, what, October 1st, 1993 through -- they would take effect, or would they take effect with the calendar year?
MR. STEPHANOPOULOS: I think they would take effect upon passage, and usually you go by the fiscal year. But that's something that's often dealt with in the legislation, and I don't want to set a hard date now.
Q But in your calculus about the impact of these things --
MR. STEPHANOPOULOS: We go by fiscal years. It's a fiscal year '94. Right.
Q So at least for a quarter, perhaps, of the current calendar year, there would be new taxes in effect and also whatever other changes in the tax code would occur as a result of this would start later this year?
MR. STEPHANOPOULOS: Again, if the legislation were passed, they could set the effect date -- yes. The general thinking is that it would be fiscal year 1994, with the exception --
Q One quarter of this year with the new rules in effect presumably --
MR. STEPHANOPOULOS: One quarter of this calendar year.
Q Of course, I'm just talking about the tax year.
MR. STEPHANOPOULOS: Yes.
Q And then it would begin in earnest for the whole year would be actually January 1, '94.
MR. STEPHANOPOULOS: And then some of the benefits would reach back to the December 3rd date.
Q What's been decided about Thursday? Thursday in the House -- will he go?
MR. STEPHANOPOULOS: I believe he's not going to be going to the House for question and answer on Thursday.
Q Did Foley ask him not to?
MR. STEPHANOPOULOS: Not exactly. They had a discussion about it. They've had several discussions about it. It's not something we want to foreclose necessarily in the future. I think it's something that we would probably like to do in the future. But at this time, there are still some details to be worked out. The President is also going to be traveling on Thursday, and we think it's best just to postpone it for now.
Q George, on the travel, where is the President going, and why were the particular sites selected? St. Louis, Ohio and --
MR. STEPHANOPOULOS: The President's going to be traveling quite a bit for the next several months, at least once a week, and this is just a good place to start. He wanted to go back to St. Louis in Missouri, and the Midwest. And then he's going to southern Ohio, Chillicothe -- a more rural area. And then he'll be going to Hyde Park, New York.
Q George, the President said this morning that among those that he talked to at this construction site that they said they'd be willing to pay higher taxes if they could be assured that the money would go to reduce the deficit and create new jobs. Just how is it exactly that this plan is going to guarantee that this money, or either this money goes toward reducing the deficit or, in fact, there will be a net reduction in the deficit regardless of other spending?
MR. STEPHANOPOULOS: Because the plan calls for that. If the plan is followed, you will have strict controls on spending, you will have strict reductions on spending. You will have controls on some health care costs, and you will have investments to create jobs. And the deficit will follow a downward path.
Q How is that different from the 1990 budget agreement promise of a reduced deficit for higher taxes?
MR. STEPHANOPOULOS: Well, the 1990 budget agreement wasn't followed in full, and I would just say that the largest reason that the 1990 budget agreement failed, however, was because the economy didn't climb out of the recession. And that's because we don't have enough investment in private sector incentives and in job creation investments of all kinds.
Q So an overall economic recovery is built into your equation?
MR. STEPHANOPOULOS: We move forward on the assumption that this program will spur economic growth, will create jobs, and will reduce the deficit. And by increasing investment and cutting spending, cutting wasteful spending at the same time, you can come forward with a program that does increase growth while reducing the deficit.
Q Do you have any reaction to the Armey-Gramm plan that was presented today which does nothing on the tax side but heavy hits on the entitlements --
MR. STEPHANOPOULOS: I haven't seen it, but I know that if it's how you described they couldn't do it without having deep and almost impossible cuts in Social Security and Medicare.
Q What percent of the new taxes will go to deficit reduction?
MR. STEPHANOPOULOS: I don't know if you can make that overall formula. What we're saying is the overall package will reduce the deficit, we hope as a percentage of GDP, in half over time and we'll reach a significant deficit reduction number.
Q You can't say a percentage of every new tax dollar or under every -- or percent of every dollar saved will go --
MR. STEPHANOPOULOS: I don't have a hard percentage of that. We might have one tomorrow.
Q Can I just follow up on that for a second? You say that you're hoping that it will reduce GDP, it will come down as
percentage of GDP by half over time.
MR. STEPHANOPOULOS: Over the four years.
Q Over the four years?
MR. STEPHANOPOULOS: Yes.
Q So the target is by 1997 the deficit will go from about 5.4 percent of GDP down to about half that?
MR. STEPHANOPOULOS: Right.
Q Can I go back to today's decline in the stock market. You seemed rather unconcerned in your previous answer. Are you saying that you don't believe that the stock market reaction today is passing some kind of a judgment on what they heard from the President last night and that there is no cause for concern here at the White House?
MR. STEPHANOPOULOS: Well, not necessarily. The stock market does fluctuate daily, and I would just point out again that it has generally risen since the President was elected in November.
Q Why do you think it dropped so much today?
MR. STEPHANOPOULOS: I don't know. I'm not an expert. If I were I probably wouldn't be here. But I know that it's generally gone up and down. Since the election it has been on an upward path. Again, I would point you to the bond market and say that the bond market has generally reacted very favorably to the President's economic proposals, and that's because it's serious about deficit reduction.
Q So you don't think this is a reaction at all?
MR. STEPHANOPOULOS: Again, I don't know necessarily. I can just say that the market does have fluctuations, and generally it has gone up since the President has been elected.
Q George, would you talk to us about the space station, which the OMB Director a year ago was vehemently opposed -- also the Majority Leader in the House and some other people. Can you tell us what it's about?
MR. STEPHANOPOULOS: Well, the President will have the details on that tomorrow. But we're committed to making sure we can control any cost overruns in the space station, but we also don't want to lose any jobs in protecting the investment. But the President will have the specific details tomorrow.
Q Is it true that you're going to cut from $800 million to a billion dollars out of the space station in Fiscal '94?
MR. STEPHANOPOULOS: The President will have that tomorrow.
Q Are you concerned about Ross Perot's reaction to this? He's going on Nightline tomorrow night. Are you concerned about the political effect if he comes out against it? And is there any attempt to try to get him on board?
MR. STEPHANOPOULOS: I don't know about getting him on board, but there clearly will be discussions at some level with Mr. Perot. We want to make sure, as I said yesterday, that he understands the plan, that he is fully briefed on all of its details.
And we think that when he looks at it, he'll see that it's serious about reducing the deficit and helping our economy grow.
Q Have there been discussions with him now?
Q Who will be -- if I can follow, who will be discussing with him and it will be before the speech?
MR. STEPHANOPOULOS: Oh, I assume there will be discussions before the speech. I'm not exactly sure who.
Q From somebody in the White House or the Cabinet?
MR. STEPHANOPOULOS: It could be -- it will be somebody in the administration.
Q Have there been any discussions with him so far?
MR. STEPHANOPOULOS: I don't think so, but I couldn't swear to it.
Q Why are you going to discuss it with Mr. Perot?
MR. STEPHANOPOULOS: We want to make sure -- he had a lot to say about the economy during the last election. He's now --as a public spokesman on the economy. We think this is a good plan that he will be able to support.
Q You feel like it's just as important to win him over and his supporters over as it is to win the folks on the Hill?
MR. STEPHANOPOULOS: I don't know about that, but we certainly want the support of every American we can get.
Q George, could you go through how the deficit got so much worse from the campaign to justify --
MR. STEPHANOPOULOS: Gene's having a briefing on that at 3:00 p.m. I can give you what I know again, but Gene is having --
Q But I think that's an off-the-record briefing, I believe.
Q Off the record?
Q Background briefing. In other words, is there an administration person who is willing to sort of explain --
MR. STEPHANOPOULOS: I can explain clearly again -- I mean, I'll go through the numbers. The OMB numbers are $70 billion to $120 billion bigger now than they were projecting in July. The CBO numbers are $29 billion to $30 billion bigger now than they were projecting in July, in August. The OMB numbers are $50 billion higher than they were in November. By any of the official baselines, the deficit is far worse than it was in July or August or November.
Q George, can I go back to the tax situation? Are you saying that the effective tax rate on incomes -- taxable incomes of $140,000 will be 36 percent? And are you saying that the rate on the $250,000 will be 39.5 percent?
MR. STEPHANOPOULOS: The President will announce the details tomorrow.
Q I thought you said earlier that that was so.
MR. STEPHANOPOULOS: I'm saying that was what the report in the Wall Street Journal referred to -- is referring to taxable income.
Q But these numbers were put out by your administration yesterday on the other part of it -- the $147,000 and all of that. Are you saying those numbers aren't -- I'm not talking about the millionaires' tax, now. I'm talking about the -- those numbers -- are you saying those numbers don't hold now?
MR. STEPHANOPOULOS: I'm not saying they don't hold. I'm just saying that the President will be putting out the official paper tomorrow.
Q And your answer to an earlier question -- did you say that the effective date of all of these tax increases would be October 1st --
MR. STEPHANOPOULOS: No. He was saying -- it's the general assumption that this would hold for fiscal year 1994. The general assumption is that if we can pass it, it will hold for fiscal year 1994. I also added that many times as these bills are being written, for certain technical reasons they can move dates around on certain taxes. And I'm not foreclosing that possibility. But the general assumption is that we move forward in fiscal year 1994.
Q That means October 1st for the tax increase?
MR. STEPHANOPOULOS: Well, it could be, yes.
Q Could be or would be? There's a big difference --if you have energy taxes on the whole country.
MR. STEPHANOPOULOS: Again, I can't say for certain. There are often -- when they pass these tax bills, it depends on when it's passed, it depends on how the Finance and the Ways and Means Committee finally calculate the bill out. And they can set an effective date. I cannot say for certain it will be October 1st. We are generally moving forward with the assumption that the entire bill takes effect for fiscal year 1994.
The President's about to speak in four minutes. (Laughter.) The President's going to speak in four minutes, at which point I will stop.
Q Is there any chance that the increase in the income tax rate that's being discussed here, that you refuse to confirm, will affect families with taxable income down as low as $140,000? Can we rule that out?
MR. STEPHANOPOULOS: With taxable --
Q Families with taxable income down to $140,000 range.
MR. STEPHANOPOULOS: Well, I can't rule that out.
Q As opposed to individuals, we're talking about families.
MR. STEPHANOPOULOS: Right.
Q George, could you give us a list of the lobbyists coming into the EOB this afternoon to be briefed on this plan?
MR. STEPHANOPOULOS: I'll find out about it.
Q This is a surprise to you that there's a variety of different special interest groups being briefed by the administration?
MR. STEPHANOPOULOS: I wouldn't be surprised if there are representatives of business and other places being briefed, but I don't know of any. I don't have the list.
Q Would you get those for us so we could --
MR. STEPHANOPOULOS: Sure.
Q compare those to the unpatriotic to the --
MR. STEPHANOPOULOS: Right. (Laughter.)
Q By reaching out into the populous, people that I certainly would consider to be middle class, even though you don't want to call them or set a threshold for middle class -- aren't you guys setting yourself -- can't it be said that you're doing exactly what President Bush said you were going to do during the campaign?
MR. STEPHANOPOULOS: No. The President has said that he's going to make sure that people contribute, but it's going to be fair. And the President also said quite clearly last night that the deficit was worse than he had estimated and it was worse than any official estimate and that we have to take real action. But when you look at the overall package, it's going to be fair. And people are going to see that if they are being asked to contribute, those who are doing better than them are going to be asked to contribute far more.
Q George, we understand that the White House is cutting a jogging track into the driveway around the South Grounds. How much does that cost and who decided to do that?
MR. STEPHANOPOULOS: I'll have to find out. I don't know.
Q Can you get back to us on this incident?
THE PRESS: Thank you.
END 2:34 P.M. EST