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Office of the Press Secretary

For Immediate Release October 19, 1995
                            PRESS BRIEFING
                           BY MIKE MCCURRY

The Briefing Room

1:23 P.M. EDT

MR. MCCURRY: Mr. Berger, for those of you awaiting his comments, will be here towards the tail end of my daily briefing, like around 1:35 p.m. or so. Mr. Schweib, you're welcome to sit here patiently awaiting that.

Q Will taxes go up again? (Laughter.)

MR. MCCURRY: Let me start with a very brief readout on the President's meeting with President Klestil of Austria. You can see David Johnson and get some additional detail, but I'll cover the main points of their 30-minute meeting.

It was a very good meeting and a good opportunity for the United States to renew friendship with Austria, to put our bilateral relationship on a more firm footing. The two Presidents had a lengthy discussion of Bosnia. President Klestil thanked the President for the very strong leadership the United States has exhibited recently in attempting to bring about both the cease-fire and to move forward with talks that could ultimately lead to a peaceful settlement of the conflict.

They discussed the soon to commence proximity talks at Wright-Patterson Air Force Base in Ohio. President Klestil told President Clinton that Austria would be willing to participate in an implementation force if, in fact, a peace settlement is reached by the parties. Again, President Klestil, at various points, underscored the importance Austria attaches to U.S. leadership in attempting to address the conflict of Bosnia. President Clinton thanked President Klestil for Austria's help in providing humanitarian relief in Bosnia. Austria has been a significant participant, along with other E.U. countries, in providing humanitarian supplies to parties that have been displaced by the fighting, and they reviewed the prognosis for the coming talks and the opportunity that does exist, the President believes and President Klestil believes, to achieve a peaceful settlement of the conflict.

Q Austria is not a NATO member, is that right?

MR. MCCURRY: That is correct. And as the President indicated to you earlier, we are certainly anxious to see if additional non-NATO countries could participate within the IFOR. We would welcome participation by the Russian Federation.

Q Looking for a couple of administration reactions to Hill debt limit developments. One, this morning Gingrich said that they want a letter from the President, outlining his belief on when the government will reach its borrowing limit. And there's another story off the Hill that says Republicans have now decided to put off any decision on a debt limit for a week, while they await that information.

MR. MCCURRY: Well, the Secretary of Treasury has been more than willing to have good contact with congressional leadership. He's authorized by the President to address the technical question of when the debt ceiling approaches and when we actually hit it. He's already taken some steps necessary to deal with the approach of the expiration of the debt ceiling. And I don't imagine the congressional leadership expect the President to pull out a calculator and start punching numbers, but the Secretary of Treasury and his experts will.

Q Do you have any more details on why the Chirac state visit was postponed? And will the meeting that the President will have with him in the U.N. be a substitute? It seems like it's six months now before they will meet --

MR. MCCURRY: As I believe our statement indicated, both for reasons of convenience and timing, it was useful to both Presidents to reschedule the November 3rd state meeting to a date in February; and we did agree on that date. They will have an opportunity to see each other in New York, but that will be only a brief, passing encounter, my understanding is. And we very much look forward to a full state visit by President Chirac.

Q What does that mean, Mike, convenience and timing?

MR. MCCURRY: Well, there are a lot of issues that go into scheduling a bilateral summit of this nature. And we decline to elaborate in any great detail, but it works out better, I think, for both the French side and the U.S. side to hold the meeting in France, and certainly it doesn't suggest anything about the very warm relationship we enjoy with the government of France.

Q Mike, is there reaction now to the firing of Kozyrev?

MR. MCCURRY: Well, we have not been able to confirm exactly what President Yeltsin's comments at his press conference mean. We will have further contact with the Russian Federation on that subject. Our assessment is that this may have more to do with internal political discussions in Russia than it does with external foreign affairs. And whatever the outcome of an internal decision by the Russian Federation to appoint a cabinet minister, we would expect to continue our close working relationship with the Russian Federation and to continue to enjoy a good working relationship with the Russian Foreign Minister.

Q You don't think it marks a change in the foreign policy towards more confrontation or --

MR. MCCURRY: Yes -- just as I just indicated.

Q Mike, until today, in criticizing Republican budget, you folks have centered on your criticism on two facets: One, the size of the tax cut; and number two, the glide path of seven years to balance, which you said forces the Republicans to cut too many things that the President thinks are important. Today, the President came out and said he's ready for a seven-year glide path, like the Republicans are. What is this going to do to his priorities since he previously blamed the seven-year thing for requiring so many of these devastating cuts.

MR. MCCURRY: Well, let me take issue with your question because I don't think it's accurate. We have said consistently and always that we based our decisions about the budget in formulating the President's plan on the correct policies and priorities. And they have not changed, and the President restated them for you earlier today. It has always been true that, for the President, preserving those necessary investments in the future so we can have a growing economy, making sure we protect our environment, we protect our obligations to the nation's senior citizens have been a critical element of a balanced budget strategy.

They agree on goals like balancing the budget, like extending the solvency of the Medicare Trust Fund, like providing tax relief to working Americans. But there's been disagreement about the policies. We drafted the President's proposal with an eye toward the policies and the programs and the priorities that must underscore that, and then worked out the math. The math worked out to 10 years; then because of a more favorable performance by the economy, it was revised to nine years. But it has never been the case -- and I've said here often -- never been the case that the calendar dictated the policy. The priorities and the programs and the policies dictated the calendar.

So it's really much more of a question of policy than math. And what he suggested to Congress today is, let's see if we can at least start agreeing on a common base of economic assumptions from experts that suggest what the economy is going to do. You'd have to do that in any event to get a seven-year path.

Q The President sounds like he now can imagine how he can meet his priorities in seven years. So he must have something in mind.

MR. MCCURRY: Well, he has an idea, and I will suggest to you that it would require relying on expert economic assumptions about the performance of the economy that generally are more favorable than the slow-growth projections of the Republican budget.

Q But those are the ones he used. So, in other words, if he used those assumptions that are more favorable than the Republican -- you're saying they came out to nine, but now he can imagine how they'll come out to seven?

MR. MCCURRY: To put it in another way, using the pessimistic assumptions that undergird the Republican proposal and the Republican plan, it's difficult to do in seven years. Same way of saying the same thing.

Q A little change of subject.

Q Let's stay on this.

Q Laura Tyson has emphasized more than once that seven years is too contractionary --

MR. MCCURRY: Well, look, at seven years to do the massive disruption in Medicare that is envisioned on the Republican plan and do the damage that we believe is done through a disproportionate and skewed tax break that provides, now we know for a fact based on the Treasury Department's analysis released today as a fact, and it skews more the benefits to the very wealthy and, in fact, results in a net tax increase on the average American who earns less than $30,000 a year -- that if you jam that type of plan through in seven years, it's devastating, the results could be devastating. And that's the President's viewpoint.

Q But, Mike, if you go to seven years and still protect all your priorities, you have to go even to a lesser tax cut than you have recommended, because otherwise, your math doesn't make sense.

MR. MCCURRY: Again, it depends on what type of economic assumptions you used in drawing up that plan.

Q But you already made those optimistic economic assumptions.

MR. MCCURRY: And remind, too, that the President said, look, the important thing here are what priorities and what fundamental choices we're going to make that go into the budget. And then it's going to be seven years, eight years, nine years, whatever it is. But the important thing are those choices that are embedded in the budget plan.

Q Are you saying that there is -- the President is either going to propose some sort of different set of spending cuts or that there is some new set of economic projections that you have not yet used?

MR. MCCURRY: Well, they're going to have to be some set of sensible set of economic assumptions that reflect what mainstream economists are telling the policymakers -- that 2.3 percent projected annual growth is just not right. So we have to get on with that.

Q Didn't you already use --

MR. MCCURRY: No, those are CBO numbers. We believe that our --

Q No, in your 10-year plan.

MR. MCCURRY: In our 10-year plan, we use forecasts that are much closer to what mainstream economists and blue-chip indicators are suggesting.

Q What you're saying is you can go beyond that now, that you can get even more rosy --

MR. MCCURRY: No, I'm suggesting it's going to -- you can't get there in seven years using the Republican assumptions.

Q How do you get there using yours? That's the question.

MR. MCCURRY: Well, that's what the President was real clear today in saying that you need to -- you know, you need to work on it. I can come back and -- Sandy, what kind of time do you have? You want to sit and watch me entertain the masses for a while?

Q The President seemed to go a big step towards the Republicans today by uttering the word "seven years." And up until now, Gingrich and his freshmen have been saying, we can't vote for this debt limit increase unless he comes to our seven-year plan. It sounds like he's offering them a big hunk of cover to --

MR. MCCURRY: The President went a long ways in their direction this past summer when he put forward a balanced budget plan that demonstrated that the President shares many of the same goals the Republican Congress has -- balanced budget, tax relief for working Americans, and extending the solvency of the Medicare Trust Fund.

On the question of solvency of the Medicare Trust Fund, there's no difference between the President and Congress. On the question of tax relief, you know how we would target it. The key difference is the one that the President suggested to you just a little while ago -- how do you preserve those investments in education, technology, science that will make the economy grow in the 21st century? How do you maintain commitments to protecting the country's environment? How do you address the situation that we talk about often in Medicare, where people are going to face enormous cuts in benefits as a result of the changes in spending that the Republican majority would make? Those are at the center of the dispute here.

The center of the dispute has never been the question of number of years. It's been the policies, programs and priorities that underscore the budget. I have stood here and said that repeatedly to you, and there's nothing different about that situation today.

Q Could it be done in seven years?

MR. MCCURRY: If they address those priorities that the President suggested to you earlier; if they're willing to make the changes in the plan that they have now put forward in Congress; if they don't take the devastating decision that they're about to take on Medicare and tax increases for working Americans; if they don't skew tax cuts disproportionately to the wealthy, you could, indeed, get there.

Now, the underlying assumption is that you arrive at a set of estimates about the performance of the economy that both sides agree on that we believe reflect more of the mainstream thinking that economists have, that are not nearly as pessimistic as the Congressional Budget Office.

Q But, Mike, isn't this exactly the signal that Gingrich has been insisting on for weeks as a condition for extending the debt limit, namely that you would come aboard his non-negotiable objective of reaching balance in seven years?

MR. MCCURRY: I no longer believe that I have any confidence in imagining what the Speaker is signaling.

Q Mike, the President did not do this in his prepared statement in the beginning, he did it in response to a question when the news conference was almost over. Did he come out here intending to say this seven-year stuff? Did he intend this to be a real gesture to the Republicans?

MR. MCCURRY: He came out here, intending to say to the Republican what he's said often -- that at the end of the day, we've got to get on with this country's business, we've got to balance the budget, and we've got to do the things that preserve the commitments we have to the nation's elderly, and that we have to make sure that the United States government does not default when we reach our debt ceiling. And he has said repeatedly that his door is open to the Republicans in Congress that there is a way to do it, that it shouldn't be a question of math, the real issues here are questions of policy; and that we can address those questions of policy, arrive at agreements, and move on with writing a budget.

Q Since your numbers -- your 10-year numbers would no longer work at seven years, are you going to propose specifics to answer those how-do-you questions that you posed earlier?

MR. MCCURRY: No, we're not going to attempt to negotiate with ourselves in writing a budget. I mean, there has to be some demonstrated willingness on the part of the other side to talk. Right now, there's very little to talk about because they're so adamant in rejecting any attempt by the President to say, look, we've got to get down to business here at the moment, unless there's a change of heart on the part of the congressional majority.

Q A follow-up here. Are you now saying -- I don't want to use the dreaded word "summit," but are you now saying that the President is willing to negotiate a budget because you've now gone to the seven years that they want?

MR. MCCURRY: No. I've said that the President, as he said earlier today, is willing to sit down and move on with business. Now, how we do that is going to be, in large part, up to the Republicans. What they have to do is to not do the wrong thing. And they're on the verge, as you all know, of doing something that's dreadfully wrong.

Q In the context of a seven-year plan, this was the second time the President has raised the idea of some sort of formula for monitoring deficit targets to make sure they toward balance. What mechanism is he talking about?

MR. MCCURRY: He's not referring to a specific policy or mechanism. He believes that a general principle that making sure you are on your pathway towards a balanced budget ought to be part of the budget process. Now, in some sense, it already is as we submit and devise an annual budget every year. But he was not referring to any specific policy.

Q In 1981, there was a concern back then, because the tax cuts were done and there were not accompanying spending cuts. Is there any concern now that there be some sort of monitoring to make sure tax cuts do take place that also entitlement to spending cuts follow?

MR. MCCURRY: The President, as he indicated earlier, wants to make sure we're getting the job done that we pledged to do with our deficit targets.

Q Mike, could you elaborate on -- that these discussions the President talked about that are underway on race relations, and is he favorably inclined on this idea of a commission?

MR. MCCURRY: I think he was real clear in how he addressed that. He said there are a lot of ideas out there in the aftermath of the march, and he's looking at them, and he wants to see how best to continue the type of dialogue he called for Monday.

Q What kind of discussions are underway here? Is it domestic staff --

MR. MCCURRY: Mostly at a staff level discussions, although the President had a good range of conversations prior to his speech, and he wants to continue those and wants to keep an active dialogue within the administration on how best to address the subject of race in America. Now, we've got specifically some staff people looking at all the different ideas that are coming, both the ones that you've seen talked about by members of Congress, plus other ideas. There are a lot of people within the administration and outside the administration that were encouraged by the President's address and motivated to begin talking about ways that we could build on the momentum of the President's speech Monday. And obviously, the desire of hundreds of thousands of people who came here to Washington to take responsibility for their own communities and their own families.

Q Is the White House now satisfied the way the Senate is coming around on the Cuban sanctions bill?

MR. MCCURRY: Well, we continue to believe that the Cuban Democracy Act is at the heart of it. Our statement yesterday, as you know, said that they dropped the most onerous provisions that existed in the Helms-Burton legislation. We now have to, of course, see what happens as Congress moves into the next stage of consideration.

Q How about the Republicans that are accusing the administration -- Dole's doing it, Gramm -- about letting Fidel Castro have a visa to come in?

MR. MCCURRY: I think that sounded more like it had to do with the Republican presidential primary debate between candidates and less to do with foreign policy.

Q Has any anyone in the administration, including the President, spoken with Chairman Greenspan since last night about his discussion with the leadership? And do you know whether there's any discussion perhaps in the future to hold a session or talk to Greenspan?

MR. MCCURRY: The President has not. And from my conversation with Secretary Rubin earlier today, I wasn't -- it's not clear to me whether he had or not, whether he did or not. But the Secretary of the Treasury does have conversations fairly regularly with the Chairman.

Q What about any future possibility that they would get together, all four of them -- Clinton, Greenspan, Dole --

MR. MCCURRY: Well, again, getting together implies that there is something to do when they get together. So far there doesn't seem to be much to do.

Q Do you have anything on the U.S.-China summit? You said you were going to talk a little bit about it.

MR. MCCURRY: Yes, we will talk a little bit about the meeting between President Clinton and Jiang Zemin, courtesy of our special briefer, if we're ready to move on to that. Anything else on other subjects?

Yes, Paula -- last one.

Q When the President mentioned common-stated goals in the budget, he said the capital gains cut without mentioning it being partisan. Was that a slip of the tongue?

MR. MCCURRY: No, he was just running through a list of things that he wants to be addressed. And as he said earlier, he is open to the idea of a targeted capital gains tax relief of some sort. The provision he's talked about in the past is related most closely to the legislation that has been offered by Senator Bumpers, among others.

With great delight, and just in the nick of time, I turn over the podium to the Deputy National Security Advisor, Samuel Berger.

Thank you, Sandy, for being with us.

END 1:43 P.M. EDT