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THE WHITE HOUSE

                  Office of the Press Secretary
                       (New York, New York)
______________________________________________________________
For Immediate Release                            May 9, 1994

                     REMARKS BY THE PRESIDENT
             TO THE ASSOCIATION FOR A BETTER NEW YORK

                         New York Hilton
                        New York, New York

1:07 P.M. EDT

THE PRESIDENT: Thank you very much. Lou, you are certainly richer than I am, but that ain't saying much. (Laughter and applause.) If only the people who weren't were compelled to stay here and the rest of you could leave, we could hold this meeting in a closet. (Laughter.)

I am delighted to be here. And I thank Senator Moynihan for coming with me, and I'm glad to see the members of Congress who are here. I see Representative Maloney and Congressman Schumer, but I have been told that Congressmen Nadler, Towns, King and Serrano are here. They may not be, but that's what I've been told. If they're not, don't be embarrassed. They've heard this speech before.

Charles Rangel is on our official delegation, along with the Vice President and Mrs. Gore and the First Lady, to the inauguration of Nelson Mandela. So that's why he's not here. And I think that my National Economic Advisor Bob Rubin and my Deputy Chief of Staff Harold Ickes are also here. I thank them for coming with me. I never like to come to New York alone. (Laughter.)

Let me say -- Lou Rudin has already mentioned this, but unless you had been there, you cannot imagine what an astonishing thing it was that the House of Representatives passed that ban on assault weapons. And if it hadn't been for Charles Schumer lighting that little candle in the darkness, when everybody else said it was dead, it was over, there was no chance, we would never have made it. It was an astonishing thing. (Applause.)

It just shows you that democracy can work, that systems can change, that things can change. But you have to work at it and you have to be willing to fight those battles that don't always end in a landslide. We won by two votes on this one. That's twice the margin we had on the economic plan last year. (Laughter.) But when these things come up, it's important to take the position, stake it out and try to change. And there are a lot of wonderful stories; I wish we had time to tell them all today.

I'd also like to say I'm glad to be back before this organization. About eight years ago I spoke to ABNY when I was the Governor of Arkansas, and I was organizing a group of southern governors to support the continuing deductibility for state and local income taxes. Remember that? And you had something to do with me coming here.

I remember -- I liked that better then because I was -- at home we call that preaching to the saved -- everybody agreed with what I was saying. They thought, what is this crazy guy from a little state doing up here taking a position that may be against his own economic interest; I thought it was the right

thing to do then in the interest of federalism. I still believe it was the right thing to do. But I remember well that fine day that I had the first opportunity to see this remarkable organization.

Today, I want to say a few words about the health care debate in which the Congress is involved and in which many of your members will play a pivotal role, none more than Senator Moynihan, because he's the Chairman of the Senate Finance Committee. But I'd like to put it in the context of all the other things that are going on.

We're at one of those rare moments in history in which, while we clearly have serious responsibilities around the world, ones that we have to meet in new and different and innovative ways, we also have an opportunity to looks at ourselves very clearly and to try to strengthen ourselves from the grass roots as we move toward the next century -- one that I think will be an exciting world of more open trade borders and constantly changing economies; one that will, to be sure, still be full of danger and disappointment; but one that give the American people an astonishing amount of opportunity if we do what it takes to play a leading role and to give all of our people a chance to live up to their full potential.

We can only do that, in my judgment, if we find ways of facing our problems and building our building to the rest of the world by being faithful to our traditional values and adapting them to the world toward which we are going; by giving our citizens the freedom they need to make the most of the opportunities they'll find; and demanding that all of us take responsibility for our common future; by strengthening our families, our education system, and our system of work; and by rewarding the work of citizens -- by telling people that if they do what it takes to compete and win, they will have a chance to do just that.

We can't allow our people to be helpless in the faces of the changes that are coming -- a world in which the average 18-year-old will literally change work seven or eight times. Giving them the confidence and the capacity to embrace those changes is a big part of my job as President, as we move toward the end of this century. We've fought hard for an economic strategy that will create a more stable and more prosperous America, beginning with an understanding that the private sector is the engine of wealth creations and job creations.

Last year, the Congress passed, against enormous opposition and the threat of recurrent gridlock the largest deficit reduction plan in history. We used honest numbers, and Congress and the President didn't argue over whether I had given them unrealistic budget assumptions. We proposed real cuts, and, soon, we will cut our deficit in half.

This year, or next year, our deficit in America, as a percentage of our annual income will be smaller than any of the other major industrial countries in the world. That is a huge turnaround from the 1980s. (Applause.)

If the Congress adopts the budget before it now and it's passing at a record rate, 100 federal programs will be eliminated, 200 others will be cut, and we will have three years of declining deficits for the first time since Harry S. Truman was President of the United States. That is one of the reasons, along with the enormous changes which have been made in the private sector in this country that consumer confidence is up, investment is up, productivity is up, and inflation is down.

Last week, we learned that last month our economy produced over a quarter of a million new jobs, and has produced about a million in the first four months of this year. Over the last 15 months, the economy has produced about three million new jobs, nearly all of them in the private sector; again, a rather marked departure from the last few years when a very significant percentage of the new jobs were created by government.

Now, we know that there are still a lot of problems. There are still a lot of people who want work, who don't have it. There are still a lot of sections of the country that are lagging behind. But we are moving in the right direction.

Last year, the Congress also, working with me, gave us what most experts said was the most productive first year of the presidency year, since Lyndon Johnson's first year or Eisenhower's first year, depending on how they count in Washington; I can never quite keep up with it. But, anyway, we had a good year. We passed the Family and Medical Leave Act after seven years of gridlock. We passed the Brady Bill after seven years of gridlock. And it is already beginning to save lives. It is beginning to have an impact.

We dramatically expanded a provision of the Tax Code called the earned income tax credit, which is designed to lower taxes for working people with children who hover right at, or just above the poverty line. It is, in many ways, the biggest incentive we have for people to stay off welfare and stay at work, by saying that the tax system will not tax you into poverty instead, we'll reward your willingness to work.

We have a lot to do in the area of education and training. But already this year the Congress has passed two of the three legs of our comprehensive education program -- first, the Goals 2000 bill, which gives us national education standards written into the law of the United States for the first time in the history of the republic, supported by grass roots reforms and all kinds of incentives to achieve them in our public schools. And the School to Work legislation, which will begin to establish a network in America of education and training for people who do not wish to go onto four-year colleges, but must have some further training after they leave high school in order to be competitive in the global economy and get good jobs with growing incomes.

Still to be done is changing the unemployment system into a reemployment system. Most of you who are employers pay an unemployment tax for a system that's been out of date for sometime now -- a system that assumes that when people lose their jobs they're just laid off temporarily and they'll be called back. So the unemployment taxes provide a pool of money to support people at a lower level than their wage, but a sustainable level until they are called back. But the truth is most people are not called back to their old jobs today. And so we need to transform this system from an unemployment system to one that begins immediately to retrain and replace people for new jobs in the economy.

Finally, something that Senator Moynihan has worked on a long time, we have to complete the work of welfare reform. In the end we are going to have end the system as we know it. We are going to have to say we'll provide education and training; we'll have a fair tax code; we'll have health care coverage for your kids. Once we do all these things the system itself should come to an end at some point and people should be provided work opportunities which take precedence over welfare.

One other thing I have to say since we've all clapped for Congressman Schumer is the crime bill has not passed yet. It's passed the House and it's passed the Senate, but they haven't agreed on a bill. And it is a very big deal for New York. The crime bill will have another 100,000 police officers. You have already seen in this city the evidence that crime can go down if you have neighborhood policing with real connections to the community. This 100,000 police officers will help to do this.

It provides more funds for states for punishment and for alternative forms of punishment and more funds for prevention. And now it will provide the assault weapons ban. But it has not passed yet. And it is very important that we keep up the pressure to get the two sides, the Senate and the House, together to make an agreement, get the bill out quickly, and pass it as quickly as possible so that we can begin to show the benefits to the American people on the streets where they live. All these things are now in progress.

As proud as I am of all this, I have to tell you that it will not be enough to help us to deal with our present problems or seize our future opportunities in my judgment unless we deal with the health care situation in America -- a crisis that has engulfed millions of people and stories that my wife and I have heard in letters and personal encounters; one that threatens the future stability of the federal budget; one that threatens these fine teaching institutions you have here in New York; and indeed the whole very fabric of our American community.

I wish I could just share with you any number of the unbelievable numbers of letters that I have received from middle class America, and sometimes upper middle class Americans who lost their health insurance or who have a child with diabetes, or the mother had an early breast cancer, or the father had an early stroke, and they've got a preexisting condition, and they can never change jobs again. Or, the number of small businesses who tried so hard to cover their employees, but their premiums went up 35 percent and 40 percent a year.

I can tell you this: We have, this budget I sent to the Congress, to give you an idea of the budget implications of the health care crisis, the budget I sent to the Congress cuts defense quite a lot. I think it cuts it as much as it should, and I hope it won't be cut another dollar right now with the challenges we face in the Pacific and elsewhere. But defense has been brought down dramatically since 1987.

This budget cuts overall discretionary domestic spending for the first time since 1969. We still spend money, more money on Head Start, on education programs, on women's health programs, on medical research, on education and training and on new technology. Why? Because we eliminate 100 programs and cut 200 others. So we increase spending on the things we should, but overall domestic, discretionary spending is cut in the budget I sent to the Congress for the first time since 1969. And, still, if we adopt this budget in 1996 or '97, the deficit will start to go up again. Why? One reason only: Because health care costs in the government's programs -- Medicaid for poor people, Medicare for the elderly, are going up at two and three times the rate of inflation.

So that, by the end of this decade, you will have pared down the defense system as much as it can possibly be pared down, you will have cut domestic spending in many of our eyes more than it should be cut, given the level of public investment we need in infrastructure and other things, and we will still have a rising deficit only because the only thing that will be going up in this budget is Medicare and Medicaid.

And, at the same time, we find more and more of our finest teaching hospitals having more and more budget problems because people are being forced by their employers into managed care networks, and they're pulling out of more expensive care. And more and more folks are showing up at the door without health care coverage, uncompensated.

This system eventually is going to cost everybody. Now, the institutions of health care in this city, as Senator Moynihan never tires of telling me, are the finest in the world. (Applause.) And New Yorkers have set standards for expanding coverage and for returning insurance to what it was meant to be, a fair deal at a fair price. I know that Governor Cuomo especially has worked very hard at the state level to control costs by keeping people healthy, not just by treating them when they're sick. A lot of things have been done. But it is clear, I believe, to everyone who studies this problem that until we find a way to provide health care security for all of our people and to ask everyone to bear a fair share of personal responsibility for the cost of health care, we are not going to be able to deal adequately with the institutional problems that we face.

What I have recommended is a system which is the most conservative change I think we can make, building on what we have: asking all employers who do not presently cover their employees, or who have very limited coverage, to pay a fair share of their employees' health care coverage; and asking the employees to pay some as well. I think that is a fair thing to do.

I just left one of your distinguished retail operations here, a big food chain headed by Mr. Jack Futterman, who is here. He joined with Doug Dority, the President of the United Food and Commercial Workers today to advocate our requirement -- our proposed requirement -- that all employers who don't cover their employees at least make some contribution to their employees' health care, and that employees also make some contribution.

If we don't do something to provide universal coverage, if we don't do something to have a system in which everyone has health security, you're going to see more and more and more of the present problems. Today in America, 100,000 employees a month lose their health care coverage for good. Today in America, millions of people -- 81 million Americans to be exact -- 81 million in a country of 255 million -- live in a family where someone has had a preexisting condition. And what that often means is that the person either can't get health insurance, or the person is locked into the job they're in because they can never change jobs, because if you change jobs and go to another job, the new employer won't be able to cover you.

This is going to become a bigger problem as big employers downsize and more and more new jobs are created by smaller employers. The structural changes in the American economy are going to accelerate this problem of providing affordable health insurance.

So what are we going to do to change it? Many of the people who are opposed to this say, well, you're going to break small business if you require them to pay anything. The truth is most small businesses pay something for health insurance, but their premiums, on average, are 35 percent higher than larger business or government. They're getting hurt by it.

The truth is if you have a chain of food stores like the one I visited today, and they cover their employees, they're at a competitive disadvantage to people who don't. But many do it anyway. And it isn't just the 39 million Americans who don't have health insurance; it's all the other people who are at risk of losing theirs.

If you think about it, very few people in America today have absolute security that they can never lose their health insurance. Very few people. You have to either work for government, because you think government will be there until the end of time and you think you'll always have that job -- which may not be predictable because governments are downsizing, too, now -- or you have to work for a company that is not only big and strong, but one you're convinced will never downsize or at least won't downsize on you.

So this is an issue that affects all Americans. If you believe that everyone should have access to health care coverage, as they do in every other advanced economy except ours, there are only a couple of options. You could do what the Canadians do and say we'll have a private health care system but it will publicly financed -- that's what we do with Medicare in America. We have a payroll tax and we pay for the health care of elderly people, and then they pay something for their health care depending on what they can afford to pay.

It seems to me that that was the most dramatic change we could make, because that would actually just basically take all private health insurers out of the system, and it would remove the kind of incentives you have in a country like Germany, for example, where employers and employees have a vested interest in trying to continue to keep up the pressure to hold down health care cost increases.

So I rejected that approach. If you're not going to do it that way through taxes, then people have to pay for it who don't have it now. And there are two ways you could do that. You can continue the system we have now, where employers and employees share the burden, and allow those employers who want to cover it all to do so. Or you could pass a law saying anybody that doesn't have coverage now will have to buy himself or herself, the employees, the so-called individual mandate.

There are several problems with that. Number one, it becomes much more expensive in the subsidies you have to provide the low-wage workers, because employers who aren't providing anything don't have to do anything. Number two, it's like automobile liability insurance, it's harder to enforce, and often you don't find out people don't have coverage until they're sick and the need it. And number three, it would leave an enormous incentive if widely applied throughout the society for employers who are providing coverage to their employees now to dump the coverage.

So it seems to me again the responsible thing to do is to extend the system that we have now. Nine out of 10 Americans and eight out of 10 people in New York with private health insurance have it through their workplace. Eight out of 10 Americans who don't have any insurance have someone in their family who works.

Therefore, it seems to me the logical, the most prudent and the easiest and most easily understood way to cover everybody is to extend these benefits in the workplace and to provide two things to small businesses and self-employed people. One is a system of discounts so they can afford to buy decent coverage. And two is, a system in which they can become part of a buying pool so that small businesses and individuals can buy on the same favorable terms that big business and government can. That is quite simply what we try to do.

Now, we believe if we go to this sort of system and then provide for people to be in big buying groups where they can compete for health care, billions of dollars will be saved just by the end of the decade, that we will not continue to see costs go up at two and three times the rate of inflation, and that the savings will be broadly and fairly shared. Today, you know, medical inflation has gone down in the last year, as it almost always does when we seriously considered reforming health care. But the benefits have flowed disproportionately to those who have access to big managed-care networks, and not to those who do not.

So I will say again, it seems to me that this is an issue for human reasons, for economic reasons, for reasons of our ability to manage the federal government's budget, has to be addressed and ought to be addressed this year. This is a thing that is going against the whole thing we want to do in America, which is to promote labor mobility by freezing tens of millions of people in the jobs they're in because of the health care problems of their family.

The system we have now clearly discriminates against small business when small business is the energy behind most job growth in America. And the system clearly discriminates against you if you're responsible and you provide health care, because of the billions of dollars in cost shifting. The system is also causing serious problems now or in the future for the great academic health centers of our country, including those here in New York.

For 60 years, presidents and Congress have grappled over this problem. Richard Nixon proposed an employer requirement to cover health insurance in the early '70s, sponsored by Senator Packwood from Oregon, who is still in the Congress. And we have debated this over and over and over again. What is the difference today? The difference today is any number of medical associations have come out for what we're trying to do. Hundreds of small businesses have stood up against the relentless lobbying of the NFIB against the employer requirement, rooted in part in the fact that the NFIB has a lot of independent insurance agents who are obviously vested in the system we have now.

We have a lot of big business, even retailers, who are now saying the time has come for all Americans to have health care security. It's the only way to control health care costs. It's the only way to have genuine competition. It is the only way to guarantee labor mobility. It is the only way to reward work over welfare.

Just consider this -- I'll say this in closing. Senator Moynihan's worked on this welfare issue all these years -- consider this: If you are a person on welfare, and you are a person with a limited education, and you take a job, chances are you'll get a job at a very modest wage, often in a company that doesn't have health insurance. Then you can begin working, drawing an income and paying taxes to go to pay for the health care people who didn't make the decision you did; instead, who stayed on welfare.

That is the system we have in America today. Go to work, lose your health care benefits. Stay on welfare, keep them. Go to work, pay taxes for the people who didn't make the decision you did. That is just one of the incongruities. The only way to fix it -- ever -- is to provide health care security for all of our people. Every other advanced country in the world does it, and we ought to do it now.

Thank you very much. (Applause.)

END1:30 P.M. EDT