THE WHITE HOUSE
Office of the Press Secretary
PRESS BRIEFING BY SECRETARY OF TREASURY LLOYD BENTSEN The Briefing Room
1:10 P.M. EST
SECRETARY BENTSEN: Well I'm delighted to be here with you and to talk a bit about what's happening to the economy. What you're seeing is what I believe to be a long-term sustainable recovery; nothing spectacular. But you've seen the gross domestic product go up in the first term, and then in the second quarter somewhat above that, and the third quarter 2.8. That's nothing terribly exciting, but it is growth. There are a lot of countries across Europe that would be delighted to have it, including Japan and Asia. But what you're also seeing is that coupled with low inflation rates and continuing long-term low interest rates, which is providing a substantial stimulus to the economy.
Now the question of NAFTA. Let me say I think we're going to win that one. It's a tough one, but the momentum is on our side and I think we'll pull it off. But what disturbs me, of course, is organized labor and their opposition. I think they're totally sincere about their concern that jobs are going to go south or to Asia or whatever. But I think they're totally wrong insofar as NAFTA. Those jobs have not moved because of NAFTA. NAFTA is not in effect. But NAFTA will do is where you have tariffs two and a half times as high from Mexico on our products going there, is on their products coming here. It will level that kind of an impediment to our trade, and that's a major plus for us.
But what does concern me, too, is the idea that we're going to retreat to our shores, that we're going to go back to protectionism. To see us -- this government and the President of the United States pushing for GATT by December the 15th -- some of the very same arguments used against NAFTA, the emotional arguments, are arguments that can be used against GATT. And I think it would be a tragedy if we would return to the days of protectionism here and fear of competition.
What you're seeing in the American worker today is the most productive worker in the world. We still have the work ethic in this country. What you're also seeing is business much more competitive than it has been in the past; and in addition to that, seeing the American worker and the American businessman understanding how important quality is in products and the demand from the consumer for that. And you're seeing him accomplish those kinds of goals. Those are major pluses for this economy of ours.
Q Mr. Secretary, Walter Mondale found it a political liability when he was labeled as the tool of organized labor in the 1984 campaign, and to some extent the same thing happened to Dukakis in '88. Is the congressional wing of the Democratic Party, much of which is against NAFTA, in danger of being labeled as a tool of the special interests, specifically the labor movement?
SECRETARY BENTSEN: I think what you're seeing, obviously, is some difference within the Democratic Party, but that's not unique to our party, and that certainly has been true of the Republican Party just as well. And insofar as any one particular
interest dominating this party or the other, I don't think that's the case.
Q Mr. Secretary, what tactics have labor used on specific members?
SECRETARY BENTSEN: From my understanding, what I've heard is refusing to contribute to a candidate who opposes NAFTA and, obviously, they're talking about campaigning against him. These things -- when you're in an elective office, various interest groups are going to use what tactics they can to try to influence you to vote in their way.
Q Mr. Secretary, could this bill have had a chance -- would NAFTA have had a chance if President Clinton hadn't become involved so deeply? And what do you think --
SECRETARY BENTSEN: Why do you say "could it have"? It is going to win.
Q Without the President -- if President Clinton had chosen to be neutral or say he was for it and let it happen on the Hill, would it have had a chance under those circumstances?
SECRETARY BENTSEN: No, this is something that requires the leadership of the President. I think that's an imperative, and he's doing it.
Q With so many other things on his agenda, why did he choose this bill to get into when it was a creation of the previous administration?
SECRETARY BENTSEN: Well, it was a bipartisan one. It wasn't just a creation of the previous administration. As Chairman of the Finance Committee, I worked very hard for it, as I did for the Canadian-U.S. Free Trade Agreement. I happen to believe that we have the edge when it comes to international competition and I believe we create jobs here. And I think that's important for the growth of this economy.
Q Labor has been against this agreement for some time. Why did you and the President decide to take off the gloves this weekend?
SECRETARY BENTSEN: Well, I thought I'd had them off for some time. (Laughter.) No, I think it's -- you see these things as you get near the vote. They accelerate and they intensify. There's nothing unusual about that.
Q Mr. Secretary, you were -- before you were talking about NAFTA, you were talking about the state of the economy and the stimulus that lower interest rates have put into the economy already. Can you quantify that?
SECRETARY BENTSEN: Well, I quantify it by the fact that my home mortgage -- I took the ARM. I believe, obviously, that if I thought the interest rates were going to go skyrocketing, I wouldn't have settled for an ARM. Sure hope I'm right. (Laughter.)
Q Mr. Secretary, you know Ross Perot as well if not better than anybody in this administration. If labor is the big bugaboo here, the big nemesis, why elevate Ross Perot tomorrow night the way the administration is going to do with this TV show?
SECRETARY BENTSEN: I think the facts are on our side and I think that puts you in a position where I think we'll win it and I think it will be obvious. There's been such a distortion of
the facts. It is getting those facts out and having a good-sized audience to watch it.
Q But again, why Mr. Perot? Why elevate him now?
SECRETARY BENTSEN: Well, I thought he was the one of them that was making the charges. We're trying to straighten that out.
Q Mr. Secretary, the election in Canada, what in fact do you think that will have on the final vote of the United States on the NAFTA?
SECRETARY BENTSEN: I don't think it's going to have any impact. And the reason I think that is because the differences I see with the labor party there is not really with NAFTA. I think they're talking about the Free Trade Agreement between the United States and Canada, and the question of what positions we might take on Durham wheat, on -- charges out of British Columbia. But you have the process set up to negotiate that. That's the largest bilateral trade agreement in the world today. You're always going to have things in contention with that much trade involved. And we have the process to consider those. We also have them under GATT.
Q Mr. Secretary, you said in your opening remarks in regard to NAFTA that you think the momentum has turned your way. Can you give us some evidence to show how the momentum is turning your way on that?
SECRETARY BENTSEN: I think we have had a number in the last two or three days who have come out and committed, and others telling us that they're going to, but want to take it on their own time to make the announcement.
Q Can you say how many people have said that? Because we have not heard people coming out and saying that they've committed.
SECRETARY BENTSEN: You've got to listen more carefully. (Laughter.) We sure have, Andrea. We've had them. And we've put them out there.
Q If the NAFTA opponents say they have 215 hard votes, do you believe them?
SECRETARY BENTSEN: No, I certainly don't believe them. (Laughter.) And I understand the idea of trying to create momentum in saying this is a done deal, forget it.
Q Why do you think, Mr. Secretary, the conventional wisdom is so wrong on this? That being the wisdom that most people think it's failing quite handily at this point.
SECRETARY BENTSEN: I remember the people that wanted to bring -- pull back the budget deal, to take it down and not follow it through to the final vote. And some of us that argued to go for it. And we won it. And if you talk about intense debate, I date back to the Panama Canal. This is a piece of cake compared to that one. (Laughter.) Let me tell you, in Texas my mail was running 100-1 against -- you'd have thought Texans had dug it. (Laughter.)
Q The President has put a lot of his personal prestige and the administration's prestige on the line for NAFTA. Given that labor is making this an issue with penalty, is the President doing that with lawmakers, telling them that they should not cross him on this or there will be a price to pay?
SECRETARY BENTSEN: You mean, explicitly? (Laughter.)
Q Mr. Secretary --
Q Would there be a price?
SECRETARY BENTSEN: No, I believe I'd rather have hers. (Laughter.)
Q Thank you. Mr. Secretary, when you were discussing the outlook for the U.S. economy, I know earlier today you made some comments with reference to Japan's economy and that they were not stimulating enough. They've already put out three stimulus packages --
SECRETARY BENTSEN: They put out three appropriation packages. But they were relatively modest and they're in a position to do more. But I believe that cutting the income tax, putting money into consumers' pockets where they can buy products and, frankly, raise their standard of living -- you take a look at standard of living in this country, and look at wages here and wages in Japan. Wages in Japan, about 30 percent higher than ours. But if you look at the standard of living, it is higher here because of what we can buy for the wages that we earn here. And if you get that cut in income taxes, it is my hope also that they'll open up some of their markets and that you'll be able to help the consumers there insofar as better prices. And that would help us on exports.
One of the problems that we're having on exports today is the fact that Europe is not growing and Japan is not growing. And here, even at this modest growth that we're experiencing here, we're turning into the engine of growth for the G-7.
I must say, I can recall -- I can recall three years ago being at a meeting in Europe, in Yonne, France, where I remember one of the Europeans standing up and saying, "What a change in the world. The end of the Cold War. And now Europe and Japan emerging as the world's leaders and America in decline." And here it is today, they're flat on their growth, and that's better than flat otherwise.
Q Mr. Secretary, with the proposal for a G-7 meeting in January to be on Russia and other economic matters, do you think this is the time to go ahead and promote another special financial G- 7 meeting to discuss growth and what Japan's contribution will be?
SECRETARY BENTSEN: Well, we'll be having one on G-7, but not in the immediacy. We've just had one.
Q About an hour ago there were some very serious charges of Mexican government corruption leveled before the House Banking Committee. And this has come up time and again with various labor movements as well. How do you calm those fears that corruption will not be a part of this NAFTA deal and that you could enforce the amendments that you --
SECRETARY BENTSEN: Let me tell you, neither one of our countries is immune to corruption. That's something we have to continue to try to root out. And they're working on it and we're working on it. I must say that this government that you're seeing today in Mexico has brought about quite a change in attitude. I look at what Pedro Aspe did with the customs officials along that border, and how he put in interns and then fired most of the older customs officials, then brought them back one at a time and then raised the salaries 10 times to try to raise them above the level of corruption -- one thing after another like that one -- to have them tell me that from the time of the revolution in Mexico to 1988, having only four Mexicans successfully prosecuted for income tax evasion -- four --
and since that time, several hundred. And they're beginning to pay their taxes. Quite a change in attitude taking place there in Mexico.
Q Mr. Secretary, on NAFTA -- just to follow up. You didn't really give us a sense of what the administration is trying to do to convince people, beyond talking to them about the grand benefits of NAFTA. What kind of --
SECRETARY BENTSEN: What's wrong with that?
Q Well, there is a sense out there that you may be doing a little bit more. Could you give us a sense of what other kinds of things you're talking to people about?
SECRETARY BENTSEN: Well we're talking about what happens with the President going to GATT. We're talking about foreign policy as well as jobs, as well as the economy. We're talking about leadership by the United States of America. We're talking about from the days of Franklin Roosevelt when we're talking about a good neighbor policy, which was more rhetoric than reality, unfortunately -- of this window of opportunity that you've got insofar as good relations throughout Latin America, an area that is exploding in growth.
Q Mr. Secretary, there's been some talk about delaying the House vote until November 22 or later. Have you talked at all with the House leader --
SECRETARY BENTSEN: That's my bad ear, I don't hear in that. No, I don't see that, even though November 27 is a very momentous day since it's my 50th wedding anniversary. (Laughter.)
SECRETARY BENTSEN: Looks like it's going to work out. (Laughter.) She's terrific. (Laughter.)
Q? Ross Perot says that there is a pro-NAFTA conspiracy to assassinate him. Do you find that at all credible?
SECRETARY BENTSEN: Well, that's been turned over to law enforcement agencies and, obviously, Treasury enforcement officials will also be looking into it.
Q Do you know anything about the credibility of those charges?
SECRETARY BENTSEN: Not to speak of.
Q Mr. Secretary, do you know of any company that labor was able to stop from moving to Asia or across the border? And do you know why they have a full court press now, when for 12 years they apparently had no basic campaign to stop this kind of movement?
SECRETARY BENTSEN: I must say I think they're so wrong on this one that I have difficulty understanding the rationalization from the other side. It is something where we've increased our productivity in this country. We've increased the quality of our products. The cost of our capital is far more competitive. And then I look at some of the problems in these other countries. We're ready to take them on. I think America can take on the rest of the world in trade and I think we should.
Q Well, why is labor so scared?
SECRETARY BENTSEN: I think they misunderstand the realities of what we're facing. I think they should have more confidence in the American worker. Thank you very much.
END1:26 P.M. EST