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THE WHITE HOUSE

Office of the Press Secretary

For Immediate Release February 10, 1994

                       REMARKS BY THE PRESIDENT
                  IN KERREY COMMISSION ANNOUNCEMENT
             
                          The Roosevelt Room

2:34 P.M. EST

THE PRESIDENT: I want to thank all the members here for agreeing to serve on this bipartisan commission on entitlement reform. If you look at the membership from the Congress and from the private sector, you see a wide variety of experience and understanding of this issue and a real willingness to work together in a bipartisan spirit for the interest of the United States.

I particularly want to thank Senator Bob Kerrey, who proposed this idea, and extend my gratitude to him and to Senator Jack Danforth for agreeing to cochair the commission.

The commission will report directly to my National Economic Council later in the year, giving us an opportunity to consider its recommendations as part of the deliberations for preparing the Fiscal Year 1996 budget. I expect these results to be thought-provoking and significant.

This commission will be asked to grapple with real issues of entitlement reforms, not caps or gimmicks that defer hard choices, but specific and constructive proposals. And we will take very seriously proposals that have strong bipartisan support.

In the last budget, the one that is now in operation, I proposed and the Congress acted on a number of restrictions in cuts and entitlements. We all now, looking ahead, know that our number one entitlement problem is Medicare and Medicaid. They are growing much more rapidly than the rate of inflation plus population. We are committed to reforming these programs through a health security plan. And I was gratified that notwithstanding some of the disagreements we had with the CBO on the timing of the cuts, the CBO study clearly showed that the proposal we have put on the table will dramatically reduce health care spending in the next decade and beyond.

It is clear that there also other entitlement issues we have to look at, and the commission will do that, too. We cannot let up on our reforms and our efforts to reduce the deficit and get this economy going again.

The Vice President has done some important work on reinventing government, which has underscored our commitment to a government that can do more with less. We are committed now to a plan that will reduce the federal bureaucracy by 252,000 over the next five years. It will be at its lowest level in 30 years. But even if you do that, we can't bring the deficit down unless we deal with other problems.

This panel, I expect, will ask and answer the tough questions. This panel, I expect, will do the kind of work that -- something like the balanced budget amendment can never do; it doesn't ask or answer any of the tough questions -- but this panel has had the courage and the willingness to face them. And I thank them for that.

If I have learned one thing since I have been President, it is in the end we have to decide on specific matters and that rhetoric sooner or later always have to give way to reality.

I want to thank again all the citizens for agreeing to serve, and in particular I want to thank the members of Congress in both parties for agreeing to undertake what many might regard as a thankless task. It will not be thankless if it gives us a strong and secure and healthy American economy and society moving into the 21st century. I appreciate your willingness to deal with it, and I assure you that I look forward to your deliberations eagerly.

Senator Kerrey, the floor is yours.

SENATOR KERREY: Thank you, Mr. President and Vice President Gore. I will speak for both Senator Danforth and myself. Senator Danforth is the Vice Chair of this commission, and as the President has indicated, we did ask for this mission.

We say that the commission intends to produce a product that makes legislative recommendations, both in the area of entitlements and in tax structure. We expect the recommendations now, rather than to be the May 1, we expect to be later. We're looking now at December 1 to make our recommendations and hope that these recommendations become a part of the budget deliberations and actions for the budget year '95-'96.

Senator Danforth and I both feel that the entitlement problem today is the most important economic, as well as programmatic and social change, social problem we face. It has great economic significance because the growth in the programs exceed our wages -- our growth and wages and income. Not only is it creating the lion's share of the deficit problem, but it is also making it very difficult for the President and for the Congress to make the kind of peoplefirst investments that the President campaigned upon and that he's been trying to do for the last two years.

The growth in entitlements make it difficult for us to in fact create the kind of economic growth that we need if we want a strong safety net. It is coincidental, but I think appropriate, that this commission will be making recommendations for 1995. That will be the 60-year anniversary of the enactment of the Economic Security Act in 1935 that was the beginnings of the creation of the U.S. safety net.

As I've heard the President say a number of times, we all take great pride in what that safety net has produced. It has enabled us to be able to say that when you grow old in the United States of America you don't have to fear that you're not going to have income or health care. We do not intend to damage that safety net. But we also understand that in order to be able to build a safety net, this nation must generate increased wealth and income, otherwise all of our generosity will go for nought.

There are programmatic reasons that entitlements need to address -- the President has spoken far more eloquently than I can about the need to reform welfare. We see this effort both connected to health care reform as well as connected to welfare reform.

There are moral reasons for us to take action. Again, the President has spoken extremely eloquently on the need for us as adults to make certain that we pass this economy on, our nation on, to our children in better shape than what we found it. And unless we continue the strong and forceful action of the President with strong and forceful action with this entitlement commission, it is very likely that the next generation will have a lower standard of living for the first time than we do.

I applaud the courage that the President has shown by empaneling this commission. I do intend to work extremely hard. This is not the sort of problem that's apt to be one that needs to be studied. The real question is, can we muster the requisite political courage that's necessary to make the recommendations and then to follow those recommendations into action.

So I'm pleased on behalf of Senator Danforth, as well as myself, to be leading this effort.

Q Mr. President, it seems that in the aftermath of NATO's decision to issue this ultimatum to the Serbs, that you're having a very tough time talking to President Yeltsin. Is he deliberately snubbing you?

THE PRESIDENT: I don't think so. I don't think so. And I expect to talk to him soon. I don't know -- I can't say anymore than you already know.

Q Well, what is the problem?

THE PRESIDENT: I don't know. You'll have to ask them. But we've had a lot of high-level consultations on it. Madeleine Albright has talked to her counterpart. Ambassador Collins is there even though Ambassador Pickering is here. And we have received -- we have no reason to believe at this point that there's a serious problem with our going forward.

I did receive a letter early yesterday from President Yeltsin that I wanted to be the basis of the telephone conversation. And he initiated this letter with me. And I think we can work through it so that we can go forward. And as you know, I said yesterday, I was hoping he would agree to help get this peace process on track. So, I don't know what else to say.

Q Mr. President, you've appointed some people to the commission who advocate deep cuts in Social Security benefits, means testing and so forth. Does that mean that you could go along with that or would you rule that out before the commission starts its work?

THE PRESIDENT: Well, I think Senator Kerrey said that nobody's really interested in cutting Social Security in terms of the social safety net that we have built up in this country. I want to wait and see what they have to say.

In my budget I recommended what amounted to a restriction on the unlimited benefits of very high income people by subjecting more Social Security income to taxation for the top 12 to 14 percent of Social Security earners. But no one that I know of has suggested actually cutting the benefits to people who have paid for them. That's not what's at issue here.

So, let's see what the commission recommends. They're just starting. I don't want to prejudge their deliberations.

Q Mr. President, is NATO prepared to go ahead on Bosnia with air strikes or other measures without Russia's acquiescence, if necessary?

THE PRESIDENT: Well, we have no reason -- I'll say again -- we have no reason to believe that -- keep in mind everything we have done with NATO is consistent with action the U.N. has already taken. It's within the umbrella of U.N. action, and Russia was on the Security Council when that happened. So, I don't think we're

doing anything inconsistent. There may be people within Russia that don't agree with this at all, but the primary purpose of what we're trying to do is not to get in a fight with the Serbs, but to have NATO protect the integrity of Sarajevo and the innocent civilians who live there while we make an effort, which I hope the Russians will participate in, to get the peace process back on track.

Q Mr. President, why do you think after nearly two years and 200,000 deaths it took this last incident Saturday to get the NATO allies finally to issue this ultimatum to the Serbs?

THE PRESIDENT: I can't answer that except to say that I think that there was a feeling -- first of all, keep in mind, the people who were opposed to this have troops on the ground there in numbers too small to defend themselves from an overwhelming assault. So all along, I think they were sympathetic with the desire to try to use the muscle of NATO to save civilians. What they felt was that they were saving more lives doing what they were doing now.

And I think a lot of people that just because the conflict has gone on, a lot of people lost sight of the fact that the United States has largely carried out and largely paid for the largest humanitarian airlift in history, now longer than the Berlin airlift; that the people with troops on the ground there have put thousands of people's lives at risk to try to keep those highways open and to keep people alive. And I think they just felt that the risks didn't outweigh the -- or outweighed the benefits.

I think this last horrible incident coming as it did after a pattern of shelling of Sarajevo convinced them what I have always believed about this, that Sarajevo is sort of the Humpty Dumpty of Bosnia. If you want -- ever want it to be put back together again, the country, you've got to keep Sarajevo from total collapse and you've got to try to save those people if you can. And I think finally they agreed with that. And I applaud them for doing it. But let's not be sanctimonious here; it was harder for them than us because they had their troops on the ground.

Thank you.

THE PRESS: Thank you.

END2:50 P.M. EST