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                  Office of the Press Secretary
                          (Tokyo, Japan)
For Immediate Release                           July 8, 1993     
                     REMARKS BY THE PRESIDENT
                       IN IOWA TOWN MEETING
                         Schneckloth Farm
                          Eldridge, Iowa  

8:30 P.M. CDT

THE PRESIDENT: Thank you very much. Folks, this is supposed to be informal, so I'm going to sit down, if you don't mind. That introduction you just heard is a good illustration of Clinton's first law of politics, which is whenever possible, get somebody you've appointed to high office to introduce you. They'll lie about you every time. (Laughter.)

I'm glad to be here with your Secretary of Agriculture, your Secretary of State, and your Governor, my longtime friend -- we served together for a long time. And when he got elected governor he was three months younger than me. He displaced me from being the youngest governor. Now there are 10 or 12 governors younger than we are. We've hung around too long and worked ourselves into middle age.

I'm glad to be here with Congressman Jim Leach and with Congressman Lane Evans, who's the Congressman from across the river in Illinois. I want to say we had some contact with Senator Grassley before I came today, and Senator Harkin called me the day before yesterday and gave me a long litany of everything I was supposed to be doing. I said, well, Tom, I only need to go to Iowa now -- been educated, you know. (Laughter.)

It is true that there wasn't much of sale's job to get me to come here. If you could come to Iowa on the 4th of July or stay in Washington and burn up, what would you do? (Laughter.) So I'm glad to be back here. The last time I was in this part of Iowa was when I was on my bus trip. And, actually, our bus trip went through almost every place that's badly flooded here, starting in northern Missouri and Iowa and Illinois and Minnesota and Wisconsin. And of course, you got some pretty substantial damage in South Dakota also.

I am very glad to be back. I want to thank Secretary Espy for coming out here so promptly. I wish I could have come a few days earlier, but the legislative and other schedules in Washington just wouldn't permit it.

I do want to say that I appreciate, Dale, what you said about Secretary Espy. One reason I asked him to be Secretary of Agriculture is that he represented a district in Congress that bordered my state, and I wanted to appoint somebody Secretary of Agriculture that actually represented farmers and that had seen crops flood and also seen crops burn -- often on the same land. If you hang around long enough you see it on the same land.

And we are trying up there to be responsive and to be helpful. And I want to thank all the people here in Iowa and all the people throughout this Mississippi River area who have been very cooperative with us and helped us.

I came here mostly to listen to you today, but I want to talk about -- I've got three or four notes here. I want to just make sure I don't forget to say anything. Of the things we already know -- we know that the damage from this flood is going to be somewhere in the neighborhood of a billion dollars. We feel that it is, anyway. I have only $100 million right now in my disaster fund under present law. And I signed a letter releasing that fund before I came out here.

There is also a new law which has been passed by the Congress which provides disaster payments for 1993. It's got about $297 million in it. It is on my desk and I will sign it as soon as I get back. And don't think I'm derelict, you're going to get the money. Even if I signed it yesterday it would take a while to get.

So we're still going to be real short of funds. So I'm going to ask Congress on an emergency basis to provide some additional funding, and Secretary Espy is going to be working with the rest of the people in the Executive Branch and your representatives from here to put together legislation that will adequately take care of the problems insofar as we can under federal law.

We are going to ask that the producers here receive the same benefits as the people who were affected by Hurricane Andrew and other major disasters last year, which is something that the congressional delegations and the governors have asked us to do and we're going to do that. And we'll eliminate the August 1st deadline for disaster filing, which is what is in the present law. And we'll present a bill to do that. I've already talked to the leadership in the House and the Senate on a bipartisan basis from other states and they don't have any problem with doing that. They know that we need to.

The last thing I'd like to mention before I open it to your comments and questions, because you may have some other specific things we can do -- is that I have asked Secretary Espy to work with the other federal agencies and with the appropriate people in Congress on a long-term reform of the crop insurance system. Any farmer who's ever fooled with it knows it's a good thing if you've got it -- if you've got insured what's go wrong, and that's the way it's supposed to be. But it's nowhere near what it ought to be. If you don't get your beans planted in the first place, for example, you can't get any insurance on it, even if you pay and pay for years.

That's a big issue. I come from a state that has not near as much corn as Iowa -- just a little bit of corn, but a whole bunch of soybeans. It is not a program crop and if you take out crop insurance against it and then it gets wet, you can't plant it at all. Under the present system you can't recover it. It's just not a very good or a comprehensive or appropriate system in my opinion. So we're going to try to see if we can't get some reforms up that people will agree to.

And there are some other actions that Secretary Espy can take that he may want to talk about or you may want to ask about. But these are the specific things we think we can do. I hope it will be enough so that we don't lose a lot of farmers who are operating on the margins. I went through that whole thing in the 1980s when I was a governor of a big farm state, and every other day I had a friend who was dropping out of farming. And we're going to do what we can to move as quickly and as aggressively as we can. I hope it will help.

I think it's real, real important to get this longterm reform of the crop insurance system and work it out so that people can access it, and then if they got it, it amounts to something when they suffer a loss. So we're going to do what we can to get that done.

I thank you for spending part of your 4th of July with me. I know you could be out shooting fireworks and I'm sorry about all the water. We had a whole lot of my state under water three or four years ago when the Arkansas River flooded, and we had towns under water, house under water, like what I saw today -- a town and an awful lot of farmland. I know what you're going through. I'm very sorry. I hope this will help, and I assure you we'll be very diligent in pushing to get this action through Congress. If you have any other ideas or suggestions we would be glad to have them.

And thank you again, Governor. Thank you, Mr. Secretary. Thank you, Madam Secretary. Congressman Leach, I'm glad to be in your district and see you looking so hale and hearty. And thank you all very much for having us. (Applause.)

Q First of all, I want to add my appreciation to the President for coming on such short notice to Iowa. Secretary Espy made a very good impression when he was here the other day and visited a farm here at Dumont -- and we appreciate hearing what you said about reforming the corp insurance system because it is very unfair.

We've got farmers that have tried their best and haven't been able to plant a crop, and consequently, even though they paid the premium, won't have any coverage. So that's important.

We also hope that the assistance can be similar to what was done in 1988 and '91, when we had similar disasters. The Congress did appropriate additional money and provide assistance to the farmers that are hardest hit. It's not the same as getting the crop, but at least we helped people stay in farming in the worst draught that we lived through in recent times in 1988. And also, we had a wet spring and early frost in '91.

This is going to be a lot worse than '91 and it could end up being worse than '88 in this state.

THE PRESIDENT: Can I ask just one fact question before we start, just for my interest because we're a little bit further north than my home state -- can you plant soybeans this late here?

Q This is the cutoff.

THE PRESIDENT: You mean three weeks from now, if the land dries off, it's too late to plant, isn't it?

Q Right. Some people have planted as late as the 4th of July and get a half a crop. At this point it's not worth the risk of planting a crop; the cost you have of putting it in the ground, you're not going to recover that. So at this point, it's just too late, I think, in the state of Iowa to plant soybeans. There was some corn ground that was switched to soybeans, but it's too late to do that now, too.

Q Thank you, Mr. President, for your interest in agriculture. I really appreciate it. And my question to you is, will you require repayment of the advance deficiency payments even though the fellow didn't get the corn planted? I would think that would be a very great help to those that didn't get planted to not have that burden of repayment.

THE PRESIDENT: I think I'll let Secretary Espy answer that. We talked about that very thing on the airplane when we were about to land and we saw how much land was under water. It was the first thing that came up when we were looking at the damage.

SECRETARY ESPY: This is something that we've been looking at a lot lately, as you might imagine. And since I returned to Washington from Iowa I've reviewed the law. And any outright waiver of the advanced deficiency payment that you've already gotten is going to be really, really difficult to do, certainly if you're not in the program.

But what we want to do is to extend the signing date for program crops, and we'll probably do it until the end of the month, July 31st, so that you can come in and declare your intent to plant another crop, particularly corn. Then you will fall in the 0-92, and then you could keep your advance deficiency payment.

For those farmers that already have the payment, we can't waive it outright, but we'll certainly work with you to make sure we stretch out the payment or we can go to Congress to ask that we have fall-back authority to do some other things.

THE PRESIDENT: Under the law, just to flat out do it we don't have the authority right now. So you either have to change the law or do what Mike said in terms of putting back the filing date and having people come in and make a declaration.

Q Mr. President, I thank you for coming to Iowa. And, Secretary Espy, I thank you for being here a second time in the last week.

In the area that you saw up in northern Iowa the other day, the crops in that area are probably as hard hit as anyplace in the state. And I think Don will probably even admit -- maybe he doesn't know it, but the corn down here probably looks as good as anyplace in the state, but even his corn isn't in the bin yet. If it happens to turn out extremely dry and hot in the last part of July and August, or even some wind, that corn will be under tremendous stress because there's just no moisture out there. The roots haven't established a root system to go down deep.

The impact out here is going to be tremendous. It's going to first affect these farmers, and secondary, then it will affect the agribusiness, ag suppliers, rural communities, the state of Iowa.

I think a thing that I would like to mention also, Mr. President, is -- and I can say this as someone who has farmed for 40 years in central Iowa -- there was a time when we as farmers had a little bit of a cushion or margin to operate under, and we'd sold a previous year or two crop at a pretty decent price. I don't know what corn is in this area. I imagine you're closer to the Mississippi. Of course, the Mississippi is closed down now, so I suppose that will have a negative psychological impact on market prices. But in central and western Iowa, the price of corn is less than $2 a bushel. Many of these farmers have no margin and no cushion left.

And it's going to have a tremendous impact on another category -- I think we have a problem within a problem. I don't know how correct it is, Mr. Secretary, but they tell me we have about 96,000 farmers in Iowa, and of those 96,000 we have approximately 3,000 under the age of 30. I have a neighbor boy that's 29 years old. He can't compete with an established farmer on that better ground, so he had about 600 acres of that river bottom, second river bottom ground rented this year. He's got 80 acres of it planted and it's under six inches of water today. We're going to lose something as part of our industry. They desperately need the ability to attract young people into our industry.

So we appreciate you coming out here; we appreciate you being sincere in understanding the severe economic impact, not only just farmers but on the whole state of Iowa. It's good to have you here, sir. And let me mention one thing. This isn't a short-term thing, but I think it's an option we can look at longer-term down the road. It's one of the Farmer's Union has suggested in to the longer-term approach, and that is assigning a one percent assessment fee on all the commodities traded on the interchanges and earmarking that for disaster assistance. And at least we're talking about a fund available when these people need it which is right now.

Thank you again for being here, both of you.

THE PRESIDENT: You know, there's another issue that you alluded to there that I don't have an answer to but I worked on it quite a lot when I was a governor, and that is the whole question of the small number of young farmers. Unless there are just young farmers that farm their parents land and it's all paid for and they've got their debt paid down. The average age of a farmer is pushing 60, just on the near side of 60. That looks younger to me all the time -- (laughter) -- but still it doesn't quite qualify as young.

We spent a lot of time when I was a governor trying to work out financing operations and some other things for firsttime farmers. Secretary Espy and I spent a good deal of time talking about that. Maybe this is not a discussion for tonight because we're all here worried about the floods, but if you had any specific ideas about kinds of initiatives we might undertake or partnerships for the states for first-time farmers to get young people in or help them get through those first rough years if they've got some accumulated mortgage or other debt, I'd really like to know it. Because I think it's a pretty serious social problem for this country to have the average age of farmers going up every year and almost no young farmers coming in.

GOVERNOR BRANSTAD: Mr. President, there is one thing that can -- we have a program called the Family Farm Beginning Farm Loan Program which right now we're waiting for an extension -- that authorization. It's financed through the sale of tax-exempt bonds. And we've used it -- the Secretary of Agriculture administers it, I have to sign off on each of those loans. It's been very successful in the state of Iowa and if that could be extended and made permanent. I know under consideration in the Congress and you've been supportive of it. We think that if this could be made permanent, not just extended for a year or so, could be really helpful because right now we have several hundred of those loans I think that are waiting to be approved.

The banks already approved them but the Congress has to extend the law right now it's expired. So, that's something that could be done that we'd really appreciate.

THE PRESIDENT: That whole tax-exempt bond law is now part of the discussion now being held on the budget, and I am strongly in favor of extending it. We had a program like that at home. It works and I'm strong for it. I think it will be extended.

GOVERNOR BRANDSTAD: It could be made permanent as opposed to extended for a year or so.

THE PRESIDENT: I think it will be extended. We're trying to make it permanent and I hope we can do it.

Q Thank you for coming, Mr. President and Secretary Espy. I have a question with the existing federal crop. I've had about a thousand acres under water since April and it's still -- most of it is under water and I've took federal crop out. Of course, most of it didn't get planted. What exceptions can be made on that one rule there? And the other thing is in 1988 the disaster fund helped out greatly but your county had to have 35 percent damage. This time it's not going to be quite that way; there's going to be isolated cases in every county. And I just wondered what kind of changes could be there also.

SECRETARY ESPY: Mr. President, this is the great irony of crop insurance, frankly, because you can only recover based on crop losses. And if you have a situation such as you have here in Iowa where you can't even plant, then, of course, you have no crop failure as such and, therefore, no coverage at all. I mean it's incredibly ironic.

That's why we need to reform the crop insurance program, and we're really going to do that. I want to work with you, honestly, to make sure that you are covered under the regular disaster. What the President said, basically, is that we now have about $100 million in his discretionary fund already that he is going to dedicate to this, and then we have about $279 million or so already in the program.

We still don't think that's enough because that would be tantamount only to about 19 cents on a dollars worth of loss. We don't think that's good enough. So, we're going back to the Congress and we're going to ask for about $850 or so million more dollars to bring up the total amount available to about $1.2 billion. That will bring us up to about a 50 percent coverage loss. And if you have crop insurance, you're going to make out a little bit better because we do think we need to provide incentives for those who have gotten in the program rather than those who agreed to opt out.

So we'll stagger it, favoring those that have agreed to sign in on the crop insurance basically.

THE PRESIDENT: Let me just mention one other thing. You asked a question about the county loss thing. That's always been in the federal law, at least as long as I've been fooling with it. And under normal circumstances it's a pretty good rule of thumb, you know, for example, if there's -- I don't know -- a tornado or a heavy, heavy rains that are uniform across the state. But when you have something that comes directly out of the flooding of a river like this, it's possible depending on the size and shape of the county that people could be wiped out and could be living just across the county line and their county not trigger.

So what I think we're going to have to do on that, I can't promise, but I'm aware of it because I've been through it before. What we're going to do is wait until all the reports come in and we can see what the shape of the damage is. And if we've got substantial numbers of people who are really wiped out who are in counties where they don't have the 35 percent county loss for just pure geographical fluke, then we need to make some provisions for that and I think we'll be able to.

Q We need to have a crop insurance program with a catastrophic feature to it, and we don't have that now.

Q I would like to say one thing. I'm from Illinois just across the way here but I'm not from Iowa but it's been bad over there, too.

Q Mr. President, I'm 23 years old and this is my first year of farming. I had been planning on starting and I grew up on a farm but everything I've done I've done myself. And I'm kind of wondering where the moneys coming from that you're planning on helping everybody with.

THE PRESIDENT: Where's the money coming from -- the $850 million?

Q Exactly.

THE PRESIDENT: Well, I don't think we'll have any trouble getting it because this year we're way below the spending targets established by the Congress before I became President. We've got the deficit way down, it's much lower than they thought it was going to be. Our interest payments are much lower because interest payments are down. And I think the Congress will -- they'll do one of two things. They'll either appropriate it as an extra expense or they'll just cut the money out of somewhere else and pay it.

Everything we've done so far since I've been there we've just cut something else and put it into some supplemental bill, which is what we did, for example, to add another 200,000 summer jobs this summer.

So they'll either find something else to cut and pay for it or they may, because it's a genuine one time emergency, just appropriate the money since we're well under the spending limits approved by the previous Congress.

Q In my opinion, what would help us out now and in the future would be not this new tax. We're taxed enough the way it is right now. We only get 50 cents on the dollar; by the time we spend it I would just as soon be able to spend my money the way I want to spend it.

THE PRESIDENT: You won't have to worry about this causing taxes because it's a tiny fraction of a huge federal budget anyway.

Q The whole United States is getting taxed on this -- what's the percentage of the United States population is farmers?

THE PRESIDENT: Three percent, but 100 percent of them eat.

Q Yes, and a hundred percent of them are going to get taxed, too. I would just as soon that you not tax me as a farmer and I would just as soon if you didn't raise taxes on the rest of the nation, too.

THE PRESIDENT: Well, if we had a decent crop insurance program, we wouldn't have to worry about disaster payments. In other words, if we had one that worked -- if there was a system of crop insurance that worked, we wouldn't have to worry about it.

Q As a farmer we've got enough to gamble on with the weather, let alone gambling on our government raising taxes. And I remember somebody saying no new taxes about six months ago, I believe.

THE PRESIDENT: Well, you didn't hear me say no new taxes. I've promised to raise taxes on the wealthy because they're incomes were produced --

Q I'm far from wealthy, Mr. President.

THE PRESIDENT: Well, if your income is under $30,000 you'll probably get a tax cut under my plan. If it's between $30,000 and $100,000, according to the Congressional Budget Office, it will cost you a very little amount of money.

Q Thirty thousand is a wealthy man then?

THE PRESIDENT: No, that's not what I said. But when I took office, sir -- let's have a political debate. I didn't think we were going to talk about this but I'd be more than happy to. (Laughter.) Let me tell you something. After the election -- not during the election when they had all the figures -- the previous government announced after the election that the deficit was going to be $165 billion bigger than they said before the election. We just discovered we're going to have $50 billion more in deficit -- this is just for four years not the whole five-year period.

So my choice was pretty simple. I could ignore that or I could ask middle-class people between $30,000 and $100,000 to pay a modest contribution to the deficit, get almost all the money from people above $100,000 and cut spending by as much as we would raise in taxes, reduce the deficit $500 million and bring interest rates down.

Let me finish. You've started to talk so you're going to listen to me now. (Laughter.) Since I became President we dropped long-term interest rates a point; they're at their lowest rate in 20 years -- only because there's finally a government in Washington trying to bring this deficit down.

Millions of Americans have refinanced their homes since January and they've saved more money in one year than they're going to pay in five years by far if this small fuel tax passes that the Congress has approved. By far. The people whose taxes were raised substantially are people whose taxes were lower in the 1980s while taxes on the middle class were raised. And for every dollar that the taxes were raised even on the wealthy, we cut spending. We have cut everything in the federal government.

We have a five-year hard freeze on all domestic spending which includes the increases we're putting into Head Start, job training and new technologies. We have slashed spending. We have raised 74 percent of the taxes on people with incomes above $100,000, and we held harmless everybody below $30,000.

I think it's a fair deal. And not only that, if it gets the interest rates down, the country will get more money out of it then they'll pay in taxes. Even the people who don't agree with me admit -- right in The Wall Street Journal -- if we keep interest rates down this low, it will put $100 billion a year back in the pockets of ordinary Americans to refinance their homes, their business loans, their farm loans, their consumer loans, their car loans, their college loans. And it's because we have let the deficit get out of hand and we're bringing it down. We've got interest rates down, we can turn the country around.

I think it is a fair plan. And you may believe you're taxed to death, but our taxes are lower than all of our competitors. And now our interest rates are, too, because we're finally doing something about the deficit. (Applause.)

I might say -- all the people who talk about how terrible this was -- we just had a hearing in the Senate last week and it was a straight party line vote voting this bill out of the Senate Finance Committee. But all those people that said the issue was spending in the Senate Finance Committee, you know how many amendments the other side offered to cut spending --they said, you know, "it's spending, stupid." "It's not taxes, it's spending" -- zero. Not one. Not one amendment, because I had taken all these politically tough spending cuts. We slashed education, slashed veterans, slashed -- we cut everything in the world in a wide budget.

And I just think it was worth it to get the deficit down. If you don't believe that you should have any tax increase at all, even a very modest one, to reduce the deficit you're entitled to that opinion. But I think you'll make more money from lower interest rates than you'll pay in higher taxes. And I think it's fair.

Q Not if I don't borrow money. I've got my money saved from earning it and I wish the government could --

THE PRESIDENT: Most 22-year-olds don't have that kind of money. (Laughter.) Lucky you. I'm proud of you.

Q I would like to thank you, Mr. President and Mr. Secretary, for coming here. And we could probably talk more about the tax issues, and I'd be happy to visit about the Senate and House version. But I think that in the interest of time we should maybe move on.

The other thing I want to say to both of you is thank you so much for being sincere and showing a concern for the damage that we have because of the excess water. That is a short-term problem in my opinion. And I have two boys at home just about ready to finish school, looking at colleges. I think at least one of them would like to get back into production, agriculture. There's many young farmers sitting around here.

We have got to do some things. We as farmers think global. And I don't think there's a better time -- you're leaving for Tokyo tomorrow -- that you carry a message and you're our leader, that we need market access for all American farm products so that we can get it overseas on a free and fair basis. I think that will build rural development, the tax base, jobs, and the list goes on.

A second part of that question -- I guess that's really not a question and I think that you're going to be our leader and carry that message very clearly to those people as we go into the discussion.

The other area that I think you can maybe halt some of the rhetoric that's going around by Mr. Perot and others on NAFTA -- I think commodity organizations will get behind your philosophy on trade to those two countries. To the south, where the average age are teenagers, there's lots of product that we can get from America down there. But we need some leadership to get that through the Congress and get it ratified. And the commodity groups are going to be behind you.

Mr. Secretary received a letter with 40 signatures on it from various commodity groups and food organizations. And so I hope those two issues you take very seriously. Because we in agriculture need to have the opportunity to get our products overseas on a free and fair basis. (Applause.)

THE PRESIDENT: Thank you. Yes, give him a hand.

If I might -- let me just say one thing, to go back to the comment the young man who just spoke made about the taxes. If everybody in this country who wanted to work had a job and we had free and open markets in the world, then we could lower taxes and reduce the deficit. That's the real truth. The real answer to this whole issue is how to get growth back into the economy. That is the ultimate answer. It's not to have the argument he and I just had. But the argument is how can you have more people working and have more markets open.

And if I might just make two comments on that. Since 1987, about two-thirds of the new jobs generated in the American economy have come from expanded trade. That's how you add jobs in a world where you're already a wealthy country and most people are working. I believe -- I'm glad to hear you say what you did about the North American Free Trade Agreement -- I believe that most of the fears the American people have are not well-founded about that.

There are some problems with it. We're trying to get side agreements on labor standards and the environment to make sure the Mexican government strengthens those things. But believe me, folks, anybody who wants to move a plant to Mexico and work people for low wages, and export products back in here, they can do that today. In other words, if we don't hit a lick at this NAFTA deal, everything that people are worried about with NAFTA can happen today.

But before Mr. Salinas became President of Mexico, we had a $5-billion trade deficit with Mexico. Today we have a $6-billion trade surplus. Last month Mexico replaced Japan as the second biggest purchaser of our industrial products. And you know what it does for you folks here and the kinds of crops you raise. It's a good deal.

So we're going to try to pass it. The people who are against it are genuine and passionate, and they represent folks just like you who work hard, play by the rules and are getting the shaft and are scared to death and are afraid this will make it worse. But I honestly believe it will make it better. If I didn't think it would be more incomes and more jobs and better for the farmers, I wouldn't do it.

And I assure you, when I go to Japan I'll carry the message you sent me with.

Q Mr. President, I just might agree with you and also agree with this gentleman -- that we've done an analysis of the impact of NAFTA on agriculture, and during the midpoint of the implementation period, we will see a $2 billion to $2.5 impact to the problem when it comes to agriculture sales, particularly when it comes to corn, berry, and beef, we'll see it. So we are absolutely in favor of NAFTA.

On GATT, as you mentioned it, the same thing also holds true, with the caveat that you mentioned. When it comes to the GATT, we believe in the general theory of the Blair House. The reduction in internal support and reduction in external subsidies, but the market access is something not discussed at the GATT, which we absolutely have to have -- market access, market access particularly to Japan and the EC.

We think that, in this regard, no deal is better than a bad deal. And we won't give you a bad deal. Thanks. (Applause.)

Q Thank you for coming. My question is have you given any consideration to possibly reopening the farmer reserve? The decision not to enter that was made when everybody thought they were going to get a big crop, and some of the farmers might want to reconsider that decision at this time.

SECRETARY ESPY: Well, we've already opened the farmers own reserve, as you know. We took it to the highest applicable ceiling. Now that we have problems here we'll consider reopening it for a brief period. We will.

Q Thank you, Mr. President, for coming out here to the midwest. My name is Marcus Gumms. I'm not a farmer in Iowa, although I have a few mid-plantings up in northeast Iowa. I'm a farmer up on south central Wisconsin, between Portage, Wisconsindale and Barrabou, where the Ringling Brothers started the circus and where we have the circus museum. I came down here from Elgin with my very special friend, Frances Helms, over here in the red, white and blue. She's dressed for the 4th of July. And I want to thank that farmer that I saw here about 3:00 p.m. this afternoon -- he invited us to come down. So we are here.

But anyway, last Wednesday I traveled from Elgin back to the farm in Wisconsin to do some work, and I was very fortunate to spend time with Secretary Espy. He came over to Wisconsin to look at our wet mess over there. Well, the problem that we have is our ground is too wet, like everybody else in the midwest, and I'm sure glad to see a President from Arkansas, because I've argued with these environmentalists and these regulators in Wisconsin for years that we have rights to drain our land under the Swampland Act of 1850 for farmers in Arkansas and other states. And I'm sure you must know about that.

But that law gave us farmers the right on our lands to levies and greens. Up in Wisconsin, the regulators up there and the DNRs tried to stop us from draining our farms. In 1981, the state DNR hauled my -- of my farm when I was trying to keep the ditches clean on 2,700 acres for myself and for my neighbors. They drowned us out three years in a row.

And, of course, we all need to do a lot of praying, Mr. President, for better weather. That's the main thing we need. But we need to do something about infrastructure. I've heard about infrastructure -- bridges and all those kind of things. What we farmers need is to have our lands properly drained for farming. And we don't need wetlands and duck ponds and environmentalists restricting us from putting in pile and cleaning our ditches. Most of us farmers know what we need to do and we can contact the soil conservation people or engineers and do it right.

And my family has been farming for 100 and some years in Indiana, Illinois and Wisconsin. We know how to pile our land. But yet, these people have gotten in control, of the Sierra Club and the John -- and the Ducks Unlimited. And I've just got about 700 acres under foreclosure with Farmers Home. And I mentioned that to Mr. Espy the other day.

The farmer head of the Farmers Home Administration in Wisconsin was just replaced by Mr. Lucterhand. After he was two weeks after his job, came to me on behalf of a wealthy investor that lives in Madison that wanted to buy our farm that's under foreclosure, to bail us out so that they could make it into a pond for canvas-back ducks.

Now this land was drained originally, starting in the early 1900s, after 1906, by farmers in Cole, Iowa, who came over there, ditched it and piled it. And it's been productive. And we've tried to make a living on it. We had three bad years and these bad years have come about because of government regulators. And I want to know if you can do something about this Swampland Act and get the Congress to appropriate some money to clean out these rivers and these drains. Because the dams on the Wisconsin River have caused silting in of probably five to 10 feet, and there's no outlet for our farms. So we have to pump it most of the year around.

And finally, the cost of pumping has gotten excessive, and we couldn't keep up with it. We couldn't make our payments to the Farmer's Home. Well, we're still hanging in there. I've got two sons who just got through college in the last two years, and they're 22 and 23 years old. And they want to farm. And we have 2,700 acres. Maybe people think that's too big a farm, but it has to be operated cohesively because it's part of a drainage district. Unless you get cooperation, you can't drain it properly and you don't raise much of anything.

I've raised mint, potatoes, onions, corn, soybeans. I used to have some beef cattle in 45 years of farming in Wisconsin. I put my life into that farm. It's like a painting to me, and I want to make it successful, and I want to produce food. And I know there's thousands of millions of farmers like that in this country. But they've been hamstrung and obstructed by the environmentalists. And I think it's time that the Congress and the President put an end to the monkey business in this country.

(End of tape.)

(Begin tape two, in progress)

THE PRESIDENT: I don't know -- Iowa -- is this thing on? I don't know what to say -- where I come from, we got -- we grow more rice than anybody else in the country -- we're kind of interested in that market access you're talking about. And the rice land floods anyway, so our ducks don't give us that kind of trouble. I never knew I was supposed to be as hard on ducks; I may have to reassess my position on this. I'm not kidding. I mean, I'm really not. Where I come from it's a big deal, but it's not a problem because the rice lands flooded anyway at duck season.

You want to say anything about the other issue --

SECRETARY ESPY: Am I speaking to the duck lovers or the nonduck lovers? Mr. President, I just say one word -- you raised a lot of issues. First of all, we're coming to a new farm bill that we'll begin discussing next year. And that farm bill will be based on a lot of things -- whether or not we have a GATT, the budget situation domestically, but also the environmental situation as well.

You know, we have to sit down and talk with everyone interested in getting a good farm bill. The second problem is that I could announce to you that based upon the presidential emergency declaration, which we will establish, we'll be able to allow you to modify the width and the size requirement for your ACR or your conserving use acreage. That's something we're announcing here today. And that gives you a lot more flexibility when you're trying to establish your CU acreage, right? You know that.

The second thing, you mentioned foreclosures. I remember talking to you about this a bit on Wednesday. I hope you can recall that when I traveled to south Dakota last February, I announced there that we would be suspending all farm foreclosures that had not yet made its way into the court system. Because we believe in being farmer friendly. And we do believe in giving the farmer the benefit of the doubt. So if there's no way to cash flow, you would not expect for us to raise taxpayers money on an enterprise that simply can't make it. However, if there's any way to cash flow, if there's any way for you to make it, we want to make sure that we don't stand in your way, that we can in fact help you. So we have suspended that. And we wrote all farmers within the nation a letter to give them 30 days for a fourth review, which we are doing at the Washington level.

So we're doing a lot. But on your environmental point, we have a bit to do on that. As we move toward the farm bill for 1995, we'll keep your point in mind.

Q Mr. President, Mr. Secretary, we appreciate you both being here in Iowa and the concern you've had for the flood damage and for the bad crops. You know, I'm a young farmer. I've got three kids back here with me today. I don't want them to start farming, because I don't have much time left. There's no margin out here for us. When we go into this '85 farm bill and the '90 farm bill, we kept getting cut and cut and cut. I'd like to see that '95 farm bill have something of a profit margin in it so that we can survive, so that we've got that cushion.

We've got to look at some things -- we're willing to shoulder our fair share of this burden. We realize there's a burden on the country. But only our fair share. We just want a fair shake in this thing. Anything you can do in that farm bill that would help us -- disaster through the '95 farm bill that's going to increase the margins out here, it would be greatly appreciated. Thank you.

THE PRESIDENT: If I could just -- Mike want to say something about that, but if I could comment on that, just make two points. First of all, on the disaster issue, we're either going to have to have an adequate, reliable, comprehensive disaster program or a decent crop insurance program that works. And if had one, wouldn't need the other.

On the question of supports, I can tell you again, the last two farm bills I went through as the governor with my farmers on the receiving end of them. As you know, because you're a farmer we had a 20 percent unilateral cut in farm supports in the '90 farm bill. So American farmers have really done their part to reach out to our competitors overseas and ask them to open their markets and stop their supports.

I think it's fair to say that the '95 farm bill, at least from my point of view, since I'm in a different position now, my attitude about it is going to be determined by a couple of things, one of which is, what are these other countries doing? That is, what's it going to take for our people to make a decent living? And if other countries make an appropriate reduction so we got a fair chance to compete in a market system, well, that's one thing. If they don't, then I think we're going to have to take a completely different look at this '95 farm bill about how it's structured. And I think it's fair to say it's up in the air now and it depends on what happens and what our competitors do. But I'm going to be very sensitive to people like you, because I -- you know, there's a limit below which we ought not to go in terms of how many farmers we've got in this country as long we're the most productive in the world. It's just crazy to stay on that trend.

Q Mr. President, we really appreciate you being out here today. We truly need your help. And everyone here feels the same; we need your help. Generally, we have a surplus of corn. And I know you're concerned about a couple things. You're concerned about fuel and pollution. The farmers here have a good solution to it -- a way to decrease pollution and a way that we can grow our own fuel right out here. Very simply, it's called ethanol. What do you think about it? And how can we get your support to make sure that ethanol is part of the program and that we won't have to have such a gas tax? I think ethanol is an answer.

THE PRESIDENT: I agree with that. Let Mike talk a little about what we're doing.

SECRETARY ESPY: We agree with you. We think that ethanol is a viable alternative resource. We think that it allows an alternative use for corn, which is great, which drives the price up. We believe that it's renewable as well and it helps us when it comes to depend us on foreign oil. So we do inside of the USDA, we have supported ethanol in our research program. We've given up -- I don't know, but millions of dollars so far since we've been in office when it comes to resource assistance for ethanol -- for the ethanol productivity. And also within the budget debate, we've had some things that say when it comes to that as well. So we agree with you. We think it's a great alternative source.

THE PRESIDENT: You know, if I might say, when that whole energy tax issue was being debated, we recommended that ethanol be exempt. And then we had an alternative that was effectively going to just take the tax out of the production sector, out of agriculture and industry altogether. But the Senate decided that rather than do that, they'd go to some more broad-based fuel tax. But if they do it in a way that's consistent with state law, it's okay for the farmers, I think.

SECRETARY ESPY: I wanted to mention that also, Mr. President, I was getting to that. On the one hand, we supported, and that's why on the budget debate we wanted to make it exempt as well. Some in the Congress didn't feel that that was right. But the administration position was absolutely consistent. You don't tax something on one hand that you want to promote on the other.

THE PRESIDENT: Can we take one more question.

GOVERNOR BRANSTAD: One of the problems, Mr. President, that we're concerned about -- and I testified before the EPA on the rules on the Clean Air Act -- present rules would really make it so cumbersome and complicated it would basically rule out ethanol. And USDA's been very supportive of our position. And I went in and testified on behalf of the coalition of governors that support ethanol. But we're very concerned about where the EPA's going to come down on that. And I would just ask that you be -- watch that issue. We just want to have a fair chance for ethanol to compete with MTBE as the additive of the future in the reformulated fuel. And we're concerned the present rules don't take care of that and it may take leadership from the White House to convince the EPA the rules need to be adjusted so that ethanol gets a fair chance to compete. The technicians there, you know, the oil companies are spending a lot of money to try to make sure that ethanol doesn't get a fair shake. We need your help on that.

THE PRESIDENT: Yeah, I've noticed them doing that. (Laughter.) Go ahead.

Q President Clinton, I'm a local small businessman, and employ approximately 30 people. And just to let you shift gears for a second here, can you or would you please tell me something that can alleviate my concerns about the upcoming striker bill. I'm concerned that it will be detrimental not only to the small business men but to the economy in general, which again is going to directly affect the farmer.

THE PRESIDENT: Well, you know that I have expressed my support for the bill and I knew you knew that or you wouldn't have asked the question. I don't have any idea of whether is can pass the Senate or whether it will at this time.

Here is the problem. Let's just talk about the problem. For many years the federal law was that strikers could not be permanently replaced if they went on strike once a group voted to unionize, if the allegation behind the strike was that there had been an unfair labor practice. But if it was just an economic strike, that is if the strikers say we ought to be getting a better deal than we're getting and we're fighting over this contract, that they could be permanently replaced. That gave the management of unionized firms a little more leverage in dealing with strikes where the argument was wages and benefits instead of they did something wrong to us.

Now -- and it worked pretty well until the 1980s when the economy became more global and there was more pressure to keep down wages and benefits and when the public mood became decidedly more antiunion in the United States. The reason it worked pretty well is management had the right to do that under a court decision but they never did it. I mean, it was unheard of, it never happened. For decades no strikes were just broken and people were run off on that account.

Then in the 1980s it started to happen with some significant frequency and that's what led to the pressure for the striker replacement bill. There was almost a compromise adopted in the -- and let me just say that this gentleman's question is related to something else. Very few small businesses in America are unionized. A lot of small businesses believe that maybe they'd be more of a target for a union if people thought they could strike over wages and benefits. I personally doubt that very much because of the relationships people have with their employees in small business. But that's really the fear, I think, behind your question.

But where it is now is that it's passed the House, they don't have the votes in the Senate yet, and we're talking about whether they can get some sort of compromise to deal with the balance issue that I talked about. The people who are for it in the Congress -- I don't mean everybody that's supporting it, but the people who are for it in the Congress -- have no interest in trying to make it either easier or harder than it is right now for people to organize themselves into unions. The question is whether that once the workers vote to join a union the bargaining process plays out in a fair and balanced way.

And so I think there's a lot -- there will be a lot of debate in the next few weeks about whether some compromise along the lines of what they were talking about last time might be passed to alleviate some of the fears that you've expressed and still deal with the balance question that came up in the '80s.

GOVERNOR BRANDSTAD: Mr. President, that will be the last question. We know that you have to get on to California and on to Japan yet in the next day or two. We certainly do appreciate you, Mr. President, and you Mr. Secretary coming to Iowa this evening and showing you frankness and both of you showing that you are very farmer friendly. And so we appreciate that and of course the crowd certainly appreciates that opportunity. We had some very frank questions, some very frank answers this evening, and I think that it was very meaningful, and I think that from this as you go back to Washington you will have a better understanding and can serve the people even better, and keep on serving the people as you have in the past. And thank you. (Applause.)

THE PRESIDENT: Thank you very much for what you said. I'd like to say one thing in closing if I might. First, I have very much enjoyed being here and I appreciate your taking some of your family time away on the Fourth of July to come out and visit about these farm issues.

Second thing I'd like to say is I really wish we had more time to do a little town meeting about the larger economic issues like the one the young man raised about the tax issue.

This is a very difficult time for this country. And a lot of the decisions that I have to make as President are not simple or easy. Before I became President I never raised any taxes from anybody to balance a budget or reduce a debt. I lived in a state that had a balanced budget law that made my chief budget officer a criminal if he let three months go by where spending outstripped revenues. And where I literally had the power to cut spending once a week if I wanted to, to keep the budget in balance. And we did what we did while having one of the fifth lowest tax burdens in the country as a percentage of income.

So this whole experience dealing with this deficit has been very painful to me. And I guess we split the difference, he and I did, on what we said.

When I was running for President I said that I thought we ought to raise some taxes to pay the deficit down on upper income people, but that we shouldn't raise taxes on the middle class and I meant it. When the deficit got written up $165 billion the choice I had was to take the politically difficult decision in the short run to ask for a modest contribution from middle class folks, cut as much as I could in spending without really getting into hurting older people on Medicare or essential investments in education. And takes threequarters of the money from the top six percent of the income earners in the country, or stick with literally what I talked about in the campaign and risk not being able to do enough to really get interest rates down and try to get the economy going again.

It's a very tough call. It is not an easy call. But as you will see when you read in the papers about this trip I'm about to take to Japan, as the toughest shape as we're in we're doing better than Europe is -- they're having negative growth; Japan's got the slowest growth they've had in 40 years; and all these people have been after us for 10 years to get our deficit down. They said if you'll get your deficit down, we'll do some things and, together, we can grow the world economy.

So I'm doing the best I can, believe me, you may think I'm wrong and maybe time will prove me wrong, but I'm trying to make the best decision I can to create jobs and incomes for the American people so that we come out ahead on this deal, not behind. It is a complicated difficult time that the goal ought to be to ask every question in terms of is it good for jobs, is it good for incomes, will it help the economy to grow, will it help people to have security and health care and educating their children and to make this a stronger and better country.

And on this, the Fourth of July, we're always going to have our partisan and philosophical differences and that's what makes this country wonderful. But if we can always keep that goal in mind, then when we differ at least we'll be arguing about the rights things.

Thank you and God bless you all. (Applause.)

END9:25 P.M. (L)