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Office of the Press Secretary

For Immediate Release March 3, 1995


                                Room 450
                     Old Executive Office Building  

1:00 P.M. EST

THE PRESIDENT: Now that the vote on the balanced budget amendment has passed it is time for Congress to go forward to write a disciplined budget that brings the deficit down, cuts unnecessary government spending, and continues to invest in our future.

Two years ago, 27 days after I became President, I presented such a budget to the Congress. It has succeeded in reducing our deficit by over $600 billion, while still increasing our investment in our children, in education, and in our economic growth.

As of today it has been 58 days since the new Republican majority took office. Congress has a deadline for passing a budget resolution of April the 15th. The American people now are entitled to see this work go forward. When the Congress proposes their budget and passes their resolution, of course, I will work with them. As I have said repeatedly, we can get more deficit reduction in responsible health care reform, but I learned last year that that is clearly something we must do working together with both parties.

The debate that is going on in Washington today is about more, obviously, than simply the deficit and the budget. It is also about the role of government. And you can see it running through every issue, from the laws being debated now in the Congress to the question of the rescission legislation before the Congress. The old Washington view, I think it's fair to say, is that the federal government could provide solutions to America's problems. The Republican Contract view reflects in many cases an outright hostility to governmental action, although in some cases a curious willingness to increase the federal government's control over our daily lives.

My view, what has loosely been called the new Democratic view or the New Covenant view, is to be skeptical of government but to recognize that it has a role in our lives and a partnership role to play.

We have made the government smaller. We have given more power to states and localities and to private citizens. Our proposals would further accelerate those trends. We have, as you learned here in this room just a few days ago, been working for months on a serious effort to reduce the burden of unnecessary regulation.

But we believe government has important work to do -- to expand opportunity, to give people the tools they need to make the most of their own lives, to enhance our security. That's why we support adding 100,000 police. That's why we support more affordable college loans. That's why we supported the Family Leave bill. That's why I support the minimum wage legislation now before Congress, and why I do not want to reduce our investment in education in our future.

The Republicans now have proposed to cut education, nutritional health for mothers and school children, antidrug efforts in our schools and other things which, to me, appear to target children in order to pay for tax cuts for upper-income Americans. I do not believe that that is consistent with our interests as we build America into the 21st century and we move into this new global economy.

So my job, it seems to me, is to continue to push my view; what I believe is the essence of the New Covenant -- more opportunity, more responsibility; reform welfare but don't punish people; require work. This is the sort of thing we need more of. And I look forward to this debate. I think it's healthy. I think it's good for the American people.

And I would like to begin now by answering your questions. Helen.

Q Mr. President, did you try to talk Senator Campbell out of jumping ship? What does it portend for the Democratic Party and what does it mean in terms of your leadership?

THE PRESIDENT: Well, I talked to him this morning because he called the White House and said he wanted to talk to me. And so I called him. And we had a good conversation and he pointed out that he had voted with me over 80 percent of the time in the last two years; that he essentially supported our economic policies, our education policies and our social policies, and that he would not change that. It was obvious to me that there were some Colorado- specific factors at work. I wish he hadn't done it. I think it was a mistake. But I hope he will continue to vote in the way he has in the past.

Q Do you think there will be more defectors?

THE PRESIDENT: No. I have no reason to believe it. He'd been talking about this for some time, we had heard, because of -- apparently because of some things that happened out there that I'm not fully familiar with. I wish he hadn't done it, but it's done. All I can do now is hope that he'll keep voting the way he has the last two years. If he does, it will make a contribution to moving the country forward.

Q Mr. President, there are growing strains in relations with Russia over the crackdown in Chechnya and the planned sale of nuclear technology to Iran. Does U.S. aid to Moscow give us any leverage on these problems? Is it time to consider an alternative to Boris Yeltsin, as Bob Dole says that you've got too much invested in? And have you finally decided on the timing of a summit with Mr. Yeltsin?

THE PRESIDENT: The answer to the last question is, no, we have not determined the exact date. As you know, we committed to meet with each other on a rotating and regular basis, so I have to sustain that commitment in the first part of this year. He asked me to come at the time they are celebrating the 50th anniversary of the end of World War II. There are some scheduling complications here. We're working through it; it shouldn't be long before you have an answer.

Let me respond to the second set of questions. First of all, I don't think it's fair to say the United States or that our administration has a Yeltsin-centered policy, or that it is time for the United States to determine to deal with someone else. What we want is a democratic Russia which continues to support reform within the country, and respects the borders of its neighbors. That is what we want. We want a Russia that helps us to reduce further the nuclear threat in the world. Those are our fundamental interests.

Boris Yeltsin has been elected the president of a country that has a constitution and a democratic system. He has a term of office. He is fulfilling that term of office. I think it would be curious, indeed, if the United States were to say that we have a separate set of rules for these new democracies -- when things don't go the way we want, or they follow some policy we don't like, well, then, we decide that we should invest ourselves in some other person.

We should support the elected representatives of the people, who are duly produced by constitutional judgments in a democracy. That's what I believe, and that's what I'm doing. When we differ with Russia, we say so. When they differ with us, they say so. But on the whole, let's not forget that a remarkable amount of progress has been made in that country and a remarkable amount of progress has been made in our relationship. They have no troops in Eastern Europe; they have no troops in the Baltics. They have helped us to implement START I. We are working on ratification of START II. We are working across a whole range of issues.

Do we have differences with them? Of course, we do. But on balance, this relationship is one that is in the interest of the United States to continue to support.

Q You indicated yesterday agreement with the Democratic senators who balked on the balanced budget amendment because of their objections to the current and continuing practice of borrowing surplus Social Security funds to offset the deficit. In light of our attitude on that, sir, I wonder if you're prepared to take a lead on that issue by proposing that that practice be stopped and by revising, if necessary, your budget and your budget projections to take into account of the change.

THE PRESIDENT: Well, there are two issues in which that works. There are two ways in which the Social Security thing works. The first is that we clearly have been using payroll taxes for 12 years now, long before I ever came here, to minimize the size of the deficit exclusive of the payroll tax, so that from 1983 forward, previous Democratic Congresses and Republican Presidents made judgments that it was better and politically more palatable to tax payroll than income, even though it's a burden on working people and small businesses.

The other issue, however, Brit, to be fair, was that were we going to cut Social Security benefits to reduce the deficit and count that against deficit reduction. And that's what I have been emphasizing. That is, if Social Security is producing a surplus today as it is, and if it's going to have to be reformed on its own terms for the 21st century when all the baby boomers retire, then I did not believe it was right for us to effect cuts in Social Security simply to reduce the deficit. I do not think that is right. I think that is wrong. So that was my position.

I have presented my budget. I stand behind my budget. I see that there are some specific cuts the Republicans have suggested that I also would think about, I see in their rescission package. But I am going to wait now until they do their constitutional duty, which is to present a budget which is something that has not happened. Then I will work with them.

The key on this is not to reduce Social Security benefits, the key is to reduce health care costs.

John. Welcome back.

Q Thank you, sir. I'd like to ask you a question, if I might, about affirmative action. I know your administration is now reviewing all of those affirmative action regulations, but there's some concern that this might be the prelude to a backing off of those policies. In fact, Jesse Jackson earlier this week expressed the opinion that maybe if you did, he might even run against you. But my question, really, on that issue is, what about the many Americans who really feel that they have been punished by affirmative action? And I'd like to get your comments on that.

THE PRESIDENT: Let me tell you about the review I've ordered and comment on the affirmative action thing. First of all, our administration is against quotas and guaranteed results, and I have been throughout my public career. I have always been for trying to help people develop their capacities so they could fully participate. And I have supported things -- when I was a governor. I supported, for example, minority scholarship programs -- in my public life, I have done that.

I want to make a couple of comments here. First, I have asked for a review of all the federal government's so-called affirmative action programs because I think it's important that we analyze, number one, what they do and what -- a lot of times people mean different things when they use affirmative action. For example, I take it there is virtually no opposition to the affirmative action programs that are the most successful in our country, which are the ones adopted by the United States military, which have not resulted in people of inferior quality or ability getting preferential treatment, but have resulted in the intense effort to develop the capacities of everybody who joins the military so they can fully participate and contribute as much as possible, and has resulted in the most integrated institution in our society.

So I want to know what these programs are, exactly. I want to know whether they are working. I want to know whether there is some other way we can reach any objective without giving a preference by race or gender in some of these program. Those are the three questions we need to ask.

And let me make a general observation. I asked myself when this debate started, what have we done since I've been President that has most helped minorities. And I think that -- I would say that the things we have done that have most helped are things that have benefitted all people who needed them -- expanding the Head Start program; expanding the college loan program; expanding the earned income tax credit, the working families tax credit which has given an average tax cut of $1,000 to families with incomes under $25,000; the empowerment zones. And one of them -- one of the empowerment zones went to an all-white area in Kentucky. But the disproportionate impact was on people who'd been left behind in our cities.

So -- and one thing that the rescission package would take away, the community development banks -- which I think would be a terrible mistake, which is designed to empower people through the free enterprise system to make the most of their own lives.

So I would say to you, where we can move ahead based on need we ought to move forward, and we shouldn't move backward. There's still a lot of people who aren't living up to their capacity in this country, and it's hurting the rest of us. And so, I want this analysis to finish. I will then make a decision in a prompt way, and I'll tell the American people what I think, and I will proceed to act in the context of the government.

Meanwhile, I urge all of you to read the history, in light of the other -- the political comments you made -- to read the history of how these affirmative action programs got started and who was on what side when they began. It's very interesting to go back through the last 25 years and see all the twists and turns.

The American people want an end to discrimination. They want discrimination, where it exists, to be punished. They don't want people to have an unfair break that is unwarranted. We can work this out, and I'm determined to do it.


Q Mr. President, it seems like every day another Republican is jumping into the presidential race. It also seems like every day we are reading about your election campaign and who is in and who is out. I wonder if you could tell us a little bit about the kind of organization that you're putting together.

And I also wanted to ask you about a comment that Senator Dole made yesterday when he was asked about why he didn't meet the Democrats' demands to take Social Security out of the fight over the balanced budget amendment. He said, "You have a President who has abdicated his responsibility. If you had a real president down there, we might think about it." What's your response to that in the context of his presidential aspirations?

THE PRESIDENT: My response to that is that Senator Dole's been part of Washington for 30 years, and he hasn't always been in the minority. And when I got here, policies supported by his Presidents and deficits run up under Republican administrations -- remember, they had this town 20 of the last 26 years; they were making all of these proposals -- have given this country a $4- trillion debt, quadrupled -- quadrupled -- in the 12 years of the Republican ascendancy.

And since I've been President, we've got a lower deficit, a lower unemployment rate, a lower inflation rate, a higher growth rate; we have cut the size of the federal government, something they did not do, and still found a way to invest more in the education of our children. And I might add, we have expanded trade more than they did, supported democracy and supported a reduction of the nuclear threat. So we've got a safer world and a stronger economy.

Now, I think that's a pretty good record, and I'll be glad to put it up against all that kind of name-calling and all of the stuff they want to do. But you know what I really want to say is, we've got to stop all this. It's March of 1995. I mean, I was a governor and I was at a severe disadvantage, and I didn't even announce for president until October of '91. I mean, we can't have everybody all torn up and upset about playing politics here for the next six, seven months; we've got a lot of work to do. And I think we should relax and do it.

I will, in an appropriate way, organize and proceed with my own efforts, but I've already given you my speech; we've got more peace, more prosperity and fewer problems than we had when I showed up. And meanwhile, I'd like to work with them to continue to make progress. We can do things together.

And I think that that Social Security remark is -- they could have had the balanced budget amendment if they had done what the Democrats wanted on Social Security, and they chose the political issue instead. That was their judgment. They made their judgment, so they shouldn't blame someone else for a decision that they made. It was a decision they made, not me.

Q Are you putting together an organization, though, yourself now?

THE PRESIDENT: Well, I'm not actively involved as they are, but I will organize and proceed. As I told you, I intend to run for reelection. But I think -- I can see right now, every day, everybody that wants to run for this job is going to be trying to make some remark or some move that runs everybody else halfway up the flag pole. And we've got enough politics in this town on a regular basis without injecting that into it. I wish -- I want everybody to relax, take a deep breath and go back to work. Let's try to do something for the American people for a year and then we can have an election. We'll have plenty of time for the politics.

Go ahead.

Q Mr. President, are you concerned that the values of dollars is falling again? And would you like to see the Fed do more to boost it?

THE PRESIDENT: You know, one of the things I've learned since I've been here is that anything I say on this subject is wrong. (Laughter.) So the Treasury Department is taking appropriate action today and I don't think I should say anything else.

Q Just another question on affirmative action, Mr. President. When you announced your review you said, we have to stop defending things that are not defensible. Do you think that rules that mandate a certain percentage of federal contracts be set aside for minority firms -- are those still necessary and isn't that guaranteeing results, the kind of thing you say your now opposed to?

THE PRESIDENT: Well, I want to look at how they're implemented. For one thing, if you look at the rules and what they mean, it's difficult to draw a conclusion about whether they even do what they were supposed to do in the first place. But I want -- I will make comments. I am almost done with this review and I will make comments when I finish about what I think we should do, and then I will do whatever it is that I can do within my executive authority to go forward.

I do not -- I want to continue to fight discrimination where it exists. I want to continue to give people a chance to develop their capacities where they need help. I want us to emphasize need-based programs where we can because they work better and have a bigger impact and generate broader support. But let me finish what we're doing here, and then I will try to answer all the details.

Q Mr. President --


Q Sir, we hear a lot of talk these days about these teenage pregnant women. Most of them are poor and black and that sort of thing. Well, that's peanuts, the cost of that program, compared to what we are spending on arms sales around the world, making wars and then we have to go out and clean up when the famines that came along afterwards. And we're buying untested weapons. Why don't we work on the billions of war and have a little peace?

THE PRESIDENT: Well, we should do that, but we should also work on reducing teen pregnancy.

Go ahead.

Q Mr. President, Mexico is going through very difficult times. The Republicans are asking for more and more information from you on the Mexican crisis. How do you see the election situation right? And do you think things are working there or --

THE PRESIDENT: Well, I think -- first of all, it seems that President Zedillo is working very hard to try to develop a program, an economic program that will balance two interests -- his desire to continue to be able to make Mexico attractive to investors outside the country, which is necessary for the long-term growth, and the need to keep Mexico strong enough and responsive enough to the domestic business interests and the working people of the country.

This is a difficult period. I think everyone would admit who has worked on this that the problems turned out to be more difficult and a long -- of more duration, more thorny than had originally been thought back in December and January. But I believe that he's moving in the right direction. And Mexico plainly has moved toward more democracy, more openness and more market economics. And I did what I did because I thought it was good for America's jobs and America's long-term interest. I still believe that. And I believe it's in our interest to support that movement toward democracy and openness throughout Latin America, beginning with Mexico.

Q Mr. President, forgive me for pressing you on this, but if I'm not mistaken, you've always been in favor of affirmative action, and in fact, you have practiced it. Why now the hesitation?

THE PRESIDENT: I have always -- that's right. I'm glad you asked. I have always practiced it. But let's look at how I practiced it. Look at my appointments to the federal bench, ones for which, I might add, I've been regularly and roundly attacked for trying to achieve diversity here in this community. I read something in the paper about once a month, people jumping on me because I've appointed more women and more minorities to the federal bench than my predecessors combined at this point in our terms -- my last three predecessors combined. And, oh, by the way, they sometimes say, his appointees also have the highest rating from the American Bar Association of the last three Presidents.

I have practiced affirmative action here the way that I perceive the United State military has practiced it. I have made an extra effort to look for qualified candidates who could serve with distinction and make a contribution to this country and make the federal bench reflective of the American population. I have not done it with any quota system in mind, and I have not guaranteed anybody a job. I have made an extra effort to do that.

The military starts before that. They have made an extra effort to develop the capacities of people who come to them with great raw ability, but maybe a disadvantaged background. Is that wrong? I don't think it is. And I'm not backing off of that.

The question is -- here is the narrow question -- the question is: If we're not for quotas in results, and we are for developing everybody's capacities, what do we do with all those rules and regulations and laws that really are in a gray area, that are really in a gray area where there is, let's say, a minority scholarship or a contracting set-aside that Maura asked about, that really is often got around because of the way they are written?

I want to review those. I do not want to see us stop trying to develop the abilities of all Americans. I do not want to see us move away from trying to concentrate our resources in the areas of greatest need.

But I would say again, I think most minorities have been helped most by the programs in this country that have been targeted toward broad-based needs. And, ironically, if you go back to the beginning of this whole affirmative action debate, it started in the late '60s and many civil rights leaders at the time argued against affirmative action programs because they thought we'd wind up in the debate we are now having 25 years later.

I think we need to look at the programs, look at the facts, and ask the questions I just asked: How does this work? Is it fair? Is it necessary? Is there an alternative way to achieve the objective? But in terms of taking aggressive initiatives to develop the capacities of people, should we keep doing that? You bet we should. How should we do it in the law? That's the question.


Q Mr. President, in the past you have bragged on Operation Gatekeeper. Governor Pete Wilson last week said that was a failure, and the numbers from the INS seem to back that up. Are you rethinking in any way your approach to --

THE PRESIDENT: How can you say that? Because --

Q In the first five months.

THE PRESIDENT: Yes, but what happened was, we had big problems in immigration when the Mexican economy started to go down, as I told everyone. But we have a lot of evidence, too, from what has been done in El Paso and in other places that we are stopping more people.

I think the key is -- my answer is, we need even more border guards, we need to accelerate the deportation of people who have been found through the criminal justice system or otherwise who are illegal aliens, and we need to accelerate our ability to find people primarily in the workplace. And if we do that -- that's part of the budget that I have submitted to the Congress. And if we do that, we will reduce the number of illegal immigrants and we will accelerate rapidly the pace by which we are deporting those who have come here illegally.

So my answer to Governor Wilson is, the problem got bigger during the last five months because of the problems in Mexico, but we have made a difference. That's my first answer. My second answer is, it's a lot more than was done before I got here by the previous administration and by the United States Senate when he was a part of it. So I want him, instead of criticizing me for doing more than they did, he ought to keep working with us so we can do even more. That's what my budget does; I hope the Congress will adopt it.

Q Mr. President, you have an independent counsel investigating yourself and your wife. You have another independent counsel investigating your former Agriculture Secretary. The Justice Department is soon about to make decisions on whether independent counsel should investigate your Secretaries of Commerce, Housing and Transportation.

Two questions: One, if any of those three are going to be subject to an independent counsel investigation, would you like to see them resign to take care of that? And, two, combining the independent counsels with those others, like Webster Hubbell and Roger Altman, who have resigned after some ethical problems, how can you explain what's happened to your administration after you came into office promising the most ethical administration in history?

THE PRESIDENT: Well, first of all, let's look at each one of them. The only people -- Roger Altman resigned even though the finding was that he had violated no law and no rule of ethics. And he made a major contribution to this country. Let's just look at that.

Secondly, all the other examples -- Secretary Espy was the single person who resigned because the subject of his activity involved things he had done as Secretary of Agriculture, which, I might add, in the aggregate, amounted to a few thousand dollars, all of which he has reimbursed, in return for which he got a special counsel with 33 lawyers and a historian.

All these other things -- including mine -- I would remind you, I am the first President in history ever to have a special counsel involving activities that have nothing to do with my work as President, nothing to do with the campaign for President, that all predated that, and that arose when there had not been a single, solitary serious assertion that I had done anything illegal. But I said, fine, we'll look into it if it makes everybody -- if it makes people feel better and to have more confidence, I'll be glad to do it.

We live in a time now where, the first thing people call for is a special counsel. I don't know if you saw Susan Estrich's article in USA Today yesterday, but I commend it to all of you to read. I mean, we really have to ask ourselves whether we are creating a climate here in which a lot of people will be reluctant to serve. I saw the U.S. News essay on Dr. Foster. I commend them for that. It was a -- I was quite moved by it. Now that I say it, the rest of you will probably jump on them since I said it. (Laughter.)

But I'm just telling you, I think -- no one has accused me of abusing my authority here as President. Everybody knows that I have tougher ethics rules than any previous President. For example, when we had the controversy where the Speaker misspoke about the drug usage in the White House and we found at that it was absolutely wrong, we found out that I have much, much tougher rules than the Congress does on random drug testing for employees, for example. So if you look at the rules and you look at the facts instead of the number of investigations, then there's no way to control that under that new law. All you've got to do is have certain number of members of Congress ask, and then it triggers this prospect.

I want to just point out, again, if you look at the work that people have done in their public capacity since I have been President, you would be hard-pressed to cite examples that constitute abuse of authority.

Secondly, I have continued to argue for lobbying reform and campaign finance reform, two things which I see are still apparently very low on the priority list of the new Congress. If you want to clean Washington up what we ought to do is to reform the lobbying rules; that's the best thing we can do.

Q Should officials resign --

Q Earlier this week, the Central Intelligence Agency went up to the Hill and said that the prospects for the START II -- the Strategic Arms Reduction Treaty -- and the Russian Duma are getting dimmer every day. Number one, I'd like to know if you agree with that intelligence estimate. Number two, have you conferred with President Yeltsin about what could be done to salvage the treaty in Russia, or what President Yeltsin could do to salvage it, if, in fact, it fails on the initial vote?

THE PRESIDENT: Well, first of all, ever since we started dealing with the former communist countries with elected parliaments, both they and we have been hearing how our Congress or their parliaments wouldn't take the next step, whatever the next step was. I remember all the people who said there was no way in the world we'd get the Ukrainian Rada to ratify the Nonproliferation Treaty. And there have been all these sort of gloomy predictions about what this Congress would do. But in the end, the democracies normally wind up doing the right thing and moving forward on these issues.

Therefore, do I believe that eventually the Duma will adopt START II? I do. And that's one of the reasons that I think it's important that we continue to engage with Russia and I continue to work with the Yeltsin administration and with President Yeltsin to try to get things like that done.

But look, look at all the things that have happened here in the last two years. It's not predictable what parliamentary bodies are going to do in these tumultuous times. But do I think we'll prevail on that? I do.

Q Following on what you said about independent counsels, Newt Gingrich has called for Democrats attacking him on ethics to pay his legal bills and reimburse the government if the charges prove groundless. You face $2 million in legal bills. Whitewater is probably going to cost taxpayers at least $5 million. Following on what Gingrich says, do you think Republicans should have to pay for this if Whitewater is groundless?

THE PRESIDENT: You know, I don't want to personalize it. I really tried to just cooperate and go along with this thing and not talk about it at all. I've told the American people I didn't do anything wrong, and I've told the truth. We'll just see what happens. But I don't want to personalize it.

What I meant to say is that, looking forward, what I think we should all ask ourselves is, is this the way we should be running a democracy, the way this operates. But I don't want to -- anything I say about my own situation I think is not helpful. I think that I should be treated -- I don't want to be involved in it that way. I want to think about what's good for America after the Whitewater investigation is over. Let's look forward. Forget about me. Let's let this thing unfold that involves me in an established way.

Q Mr. President, if we could come back to foreign policy. Are you prepared to send American troops to Croatia at the end of the month to help in the withdrawal of U.N. peacekeepers if President Tudjman sticks to his deadline? And can you foresee beyond now any circumstances in which you would keep those troops there or expand the number of American ground troops in the region to help avert the wider war that so many people fear

THE PRESIDENT: Well, the United States has sent troops, as you know, to Macedonia as part of the United Nations effort to try to limit the scope of the Bosnian War. And we have committed to help get the U.N. peacekeepers out of Bosnia if the UNPROFOR mission in Bosnia collapses. We have done everything we could do to persuade President Tudjman not to suspend the U.N. mission in Croatia because we fear that it will lead to a wider war there.

We feel a strong responsibility to our U.N. and, many of them our NATO allies as well, to try to help them, and we are trying to work through whatever plans would be appropriate to give that sort of assistance. But I do not foresee -- I have worked very hard to avoid the long-term commitment of American ground troops in that region, and I will continue to do that.

I think that this is something that has to be handled through the United Nations. I have offered NATO support, and I have been willing to work with our allies who were willing to put their troops on the ground there because they thought it was an area in which Europe ought to take the lead. And that's generally the system I think we should continue to observe.

Q Mr. President, you mentioned health care reform yesterday and again today as one way you could achieve deficit reduction. I wonder if we're going to see any concrete proposals from you in this legislative session on health care reform.

THE PRESIDENT: Yes, I think you will see concrete proposals in this legislative session.

Q From you?

THE PRESIDENT: From me, yes. But I want to do it insofar as I can, with the Congress. As I said in the State of the Union address, I think last time I bit off more than I could chew. They saw that and then they decided to back away from their proposals and just take the political position they would kill anything we propose. And I think I made a mistake, but I think they did, too. And what I hope we ought to do now -- what I think we ought to do now, is to figure out a way to help Americans get more affordable health care and to solve this problem. And if we do it in the right way, we will continue to substantially lower the costs of Medicare and Medicaid in the out-years.

Let me say something that almost nobody has noticed in this budget I presented, and that is that this budget reflects $94 billion less in health care costs over the next five years than last year's budget. Why? Because of the increasing use of managed care in the Medicaid program, because more seniors are voluntarily going into managed care programs in Medicare, and because of the general efforts both in the private and in the public sector to bring down health care costs. Now, the reason it hasn't reduced the deficit $94 billion is that interest rate increases have added to the cost of carrying the debt.

But we are lowering the cost of health care from what it was when I took office. And we can do that some more in a responsible, fair way. But we've got to do that together. I mean, we just -- you know the Congress is a Republican majority Congress; I can't pass a health care bill unless they want to work with me on it.

Q Are you saying you'll only do it with them then? I mean, are you inviting them to work on --

THE PRESIDENT: No, what I'm saying is, I've been talking to senators and congressmen -- House members -- in both parties for some weeks, and I'm very flexible about when to put what out and all that, but the point is, unless we have some agreement about how we're going to proceed, we won't pass a bill. If we do pass a bill, we can both help to make progress on health care for the American people, which is a thing they really want, and we can lower our future costs in health care.

Q Mr. President, Mrs. Clinton is about to visit a number of foreign countries, and I wonder, is there a diplomatic element to this at your behest, or what is the purpose of her visits, particularly to the South Asian nations?

THE PRESIDENT: Well, she has been invited to go there, number one. And number two, I believe that the United States has given insufficient attention for some years now to South Asia. India has the biggest middle class in the world, for example. And there are two reasons for this. One is our historic ties to India were strained during the Cold War because of what the geopolitics of that area did to their foreign policy. And secondly, there are these thorny problems between India and Pakistan which we have sought to help resolve through several administrations and without success. And it's not something that I can do right now. But we had a number of Cabinet members going there. She was invited, and I thought she ought to go. I encouraged her to go.

The trip to Copenhagen, she was invited to speak to the nongovernmental organizations about issues being dealt with at Copenhagen that she's been involved with for 25 years, and I was very glad she did that.

Q Mr. President, a two-part question on international issues. When you attack the new isolationists, specifically, who do you have in mind, by name? (Laughter.) And the second part of the question, as you know, the French government has accused five CIA agents listed as diplomats in France of activities incompatible with their diplomatic status, which is a euphemism for espionage. Are they telling the truth? What does this mean?

THE PRESIDENT: Let me take the second question first. I believe that we have resolved this matter with France, and, as a practical matter, I have followed the policy of every President not to publicly discuss intelligence-related questions.

Secondly, I just got through saying, I think we're getting into too much name-calling in Washington, and I don't want to exacerbate that. I made it very clear what I said in my speech at the Nixon Center the other night. There are understandable tendencies all across the world -- the gentlemen just asked me the question about the Russian Duma -- there are understandable tendencies all across the world to look inward in these democracies and in all countries where popular pressure is saying: Let's shut the world out; this is a complicated world; we don't have control over all this; we've got enough problems here at home; we've got to walk away from them. And they are working on people, everywhere in the world. They are working on people here in the United States.

I do not want us to become either economically or politically isolated. That's what I mean by isolationist. Therefore, as you know, I believe that since we have no intention of just closing our borders -- we're getting all the downside of global trade in terms of having people in vulnerable jobs being dislocated. Expanding trade gives us the upside, gives us the chance to win, to promote democracy and stability abroad and to get more high-wage jobs here. I think it would be a bad mistake for us to restrict the power of me -- this President or any future President in peacekeeping, in all those areas.

So you know who's on what side on all these issues, and you know how I feel about it. And I don't think that us getting into name-calling will further that.

Peter and then Anne.

Q Mr. President, returning to the issue of Russia, given the continued fighting in Chechnya and the apparent stall in Russian reforms, can you give us some measure of your confidence level in Boris Yeltsin or your lack of confidence? And how do you read his failure to conclude this situation in Chechnya?

THE PRESIDENT: I think it's obviously a very difficult problem for him. And I think that -- I hesitate to comment on it in great detail because I'm not sure I know everything there is to know about it. We and every other country in the world outside Russia and all of his allies -- I know Chancellor Kohl and many others in Europe have said, you ought to slow down the fighting; you ought to bring an end to the violence; you ought to bring the OSCE in there to be observers, to make sure there are no human rights violations; and this thing ought to be negotiated.

And so, the ambivalence between the military solution and the political solution, and the fact that you obviously have 1.2 million or however many of there are of very determined people in Chechnya with a decades-long history of resentment against the central government makes this thing just sort of hanging there. It's like a thorn in their flesh.

Now, I believe that he has made the major policy decisions there. I think he is in control of the policy there. And I have dealt directly with him in urging a change and a moderation of policy there, and I will continue to do that. My confidence level in him is strong. If you ask me do I think he is still the effective President of Russia and is he making those decisions -- yes, that's what I believe is the case.

I'll take one more. Anne, and then I'll go.

Q Back on politics, you say it's too early for you to become consumed by reelection talk. It might not be too early for someone within the Democratic Party who might choose to challenge you. Do you expect a challenge from within your own party, and do you think that would be destructive for Democrats?

THE PRESIDENT: I don't expect it; I don't not expect it. I don't know what will happen. I hope there won't be one. I think it would be a mistake for the Democratic Party. And, again, I would say what would the issue be? What would the issue be? The unemployment rate is lower, the inflation rate is lower, the growth rate is higher, the world is more peaceful. We have a slew of problems out there. We can stay here for three or four hours and talk about it. There are a bunch of problems out there. The country is in better shape than it was two years ago.

I get tickled -- I laugh every time I see one of the Republican -- when the Republicans have a big fundraiser, and they give them a bunch of money because a lot of them are angry that we raised income taxes on the top 1.2 percent of people to bring the deficit down. But I'll bet you almost everybody going to those fundraisers for those Republicans is doing better under our economic policies in the last two years than they were before.

So my job is just to do the best job I can, reward work, support families and communities, offer opportunity, demand responsibility in these changes, and keep moving forward. That's what I'm going to do. And this is a difficult, tumultuous time, but this country is doing better. And I am determined to keep fighting for the interests and the values of middle-class people. And I'm going to let the election take care of itself, as I believe it will.

Thank you.

THE PRESS: Thank you.

END1:46 P.M. EST