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THE WHITE HOUSE

Office of the Press Secretary


For Immediate Release December 31, 1995
                           PRESS BRIEFING
                           BY MIKE MCCURRY

The Briefing Room

12:40 P.M. EST

MR. MCCURRY: Let me just tell you what's going on right now. The President of the United States is thanking individually the various members of the budget staffs that have been supporting the administration team during these discussions, folks from Health and Human Services, Treasury, OMB, the National Economic Council, Mr. Panetta's staff, those that have done extraordinary work over the last week and, as you'll be able to tell in a moment, have got an extraordinary amount of work today and tomorrow.

The budget discussions today led to an agreement by the principals to instruct staff to really summarize the discussions they've been able to have over the last several days, which resulted in exploring the differences that exist in a range of areas from income support programs to welfare, to tax issues, to health care finance issues -- to really summarize those discussions and draw together the places where there appeared to be some agreement between the Republican side, the administration and the congressional Democrats; and then, also set forth in more precise detail the areas that there clearly are still differences.

That will lead to a meeting that will happen here at the White House Tuesday evening, either late afternoon or early evening -- I suspect more early evening -- between the budget principals. They will reconvene, review the discussion document that is prepared by staff over the next day and a half, and they will begin, I think they all believe, the more serious discussions of tradeoffs that exist on the large issues that will be fundamental to a final agreement. But they all clearly remain committed to this process and the process is working. They are making progress because they are defining the areas of agreement and disagreement more clearly. And the President's satisfied that they're making progress.

The President also strongly encouraged the congressional leaders to find a way to pass some measure that would restore federal workers to their rightful places of employment. He also wants them to be paid, but he understands that those are -- there are different points of view on that issue. He hopes they can resolve some of these issues.

Q What's his point of view on that?

MR. MCCURRY: He believes they should be working, they should be paid, and the government should be fully open, as he said over and over and over again.

Q Any suggestion, any hint that they were close to working some deal today?

MR. MCCURRY: They worked on it a lot. There was considerable side-bar discussion during this meeting between House and Senate staffers, and Senate staffers between the Republican and Democratic side, and that will lead to whatever action occurs on the Hill shortly.

Q Did Dole and Daschle say they would --

MR. MCCURRY: I'm not going to comment on the business that they need to do themselves on the Hill.

Q Mike, Tony Blankley said that there was one area that was not covered in the walk-through. What is that area? He said it was one major area.

MR. MCCURRY: I suspect -- can you run and check on this? I suspect the answer to that is Medicaid. But Barry will run that down.

Q They didn't act on that at all?

MR. MCCURRY: They spent a lot of time discussing Medicare. The almost entire discussion today was devoted to Medicare and different options. And what the President and congressional leaders asked for is something that really defines more clearly what the policy choices are in Medicare given the respective positions of the various budget proposals that are out there.

Q Mike, in the event that there is some kind of deal in the Senate, will there be any briefing here on what -- the technicalities of what that means for the government?

MR. MCCURRY: Well, if there's a final agreement in Congress that would restore federal workers to their jobs, OMB staff will be available to talk about how that will affect any restart activities that they have. But we'll direct that to OMB because they'll be in the best place to analyze that.

Q Mike, can you confirm that as of yesterday they had an agreement in principle to at least a packet of savings of $100 billion in social spending?

MR. MCCURRY: Well, that would be -- that requires some rough eyeballing that I don't think you can really do under the circumstances. There are different ways that you can look at the categories of things they've done here. There are some areas where there are clear agreements and they should be able to rather quickly write the legislative language that would lock in some of the things they've agreed to.

There are other areas where it's a little fuzzier, where there are some different options that exist and you could get a range of savings depending on how you calculate it. But my guess is -- I saw that comment in one of the stories today; I think that was probably a rough eyeball guess that someone made that would try to put a numeric value on some of the work they've done. Frankly, I'd caution people here against using that kind of calculation because the ranges are so large when you look at the big ticket issues. There could be considerably more in savings, depending on how you judge the progress they made on some of these discussions.

Q What are the differences on Medicaid without going into detail? Are they financial or are they philosophical?

MR. MCCURRY: Both.

MR. TOIV: Medicaid is the issue, but it was discussed in the context of block grants, the whole block grant issue, but not separately as a --

MR. MCCURRY: The fundamental dispute there is the guarantee of health care coverage and the federal entitlement and what happens if you block-grant it. Now, that's a large issue and one of the issues covered particularly as they dealt with domestic discretionary spending, which they did both yesterday afternoon and yesterday evening.

So I think that they've touched on that aspect of Medicaid, but they haven't gone through all the -- they haven't gone through it in the same detail and precision on that issue as they have some of the other areas that they've looked at. Now, that will be covered by some of the staff work. They are going to take some look at issues related to that as they work over the next day and a half. They'll be preparing some side-by-side analyses of how the different issues play out.

Q Are they working from the same base numbers?

MR. MCCURRY: They're working from the same calculation of what the budget impact is based on CBO numbers, yes.

Q What's the point of all these hours of walking through this? It seems to me we all know what the big differences are.

MR. MCCURRY: Well, that's not necessarily true. I mean, everyone knows what the big differences are and what the big numbers look like on a single sheet of paper. But remember, every one of those large numbers is premised on fundamental policy decisions that have a great deal of nuance and complexity associated with them. And I think it's encouraging and the principals are encouraged at how detailed these discussions have been. They have looked item by item at these policy implications of the large numbers.

I think many Americans think, well, gee, you get together in the room and you split the difference in a simple arithmetic. That's not policymaking. Policymaking requires attention to the detail that underscores each of those numbers. And that's the work they've been doing.

Now, based on the very intense discussions they've had, the staff can now summarize in a much more detailed fashion what the specifics of a legislative approach to a final budget agreement would look like. That's encouraging because it means if they do reach an agreement on a final budget package, the work of assembling that and putting it in legislative language would be considerably easier based on the discussions they've had here. In a sense, one participant compared this to something like a conference committee on the Hill; they're doing much the same thing they would do in a House-Senate conference committee, looking at big issues, discussing the policy differences, and then making it possible for staff to write what amounts to a conference report.

Q Are they getting a sense of how far away they are from reaching some kind of final agreement? Are they getting a sense of the kind of time frame they're looking at?

MR. MCCURRY: They could be so near or so far away because it will depend in part on what types of tradeoffs they make on the large issues. They have not attempted to take the big issues, as Hillary just said that everyone knows are out there, and reconcile them. They've approached this from saying, let's narrow as closely as we can the differences that exist and define better what types of tradeoffs will exist once you've reached those big decisions. But I suspect that by Tuesday night when they meet again, they're going to start moving to those more fundamental issues that will have to be embraced if there's going to be a final agreement, which is why right now it's impossible to say one way or another whether they will actually reach an agreement.

Q -- an agreement in the order in which they'll take up the big issues? Because, as you've said in the past, you would prefer that the spending and the final decisions on spending determine the size of a tax cut.

MR. MCCURRY: I don't believe -- they have given a list of specifics to the staff to address, but I can't say for certain that the principals will work through those issues in the same order -- that they go from income maintenance through health care finance issues to discretionary spending issues to revenue issues. But I don't guarantee that that's the order in which they will be addressed on Tuesday night.

Q Would you say that they have finished stage one, the walk-through process, then and are getting -- are heading into stage two, the decision-making process?

MR. MCCURRY: They finished the walk-through process during the course of the day yesterday, with the exception of the more detailed discussion of Medicare that they wished to have today. They are now preparing for what amounts to the tradeoffs that will have to occur.

Q Is the President ready to compromise and trade off?

MR. MCCURRY: Well, the President is ready to continue to discuss these issues in good faith.

Q In what context have they discussed Social Security?

MR. MCCURRY: It has been related to many of their discussions of health care finance, Medicare in particular, and related in some respects to their AFDC discussions since they're all covered by the various titles of the Social Security Act.

Q Did they talk about it in terms of --

MR. MCCURRY: They've had -- I believe they had a very brief discussion of the CPI issue, and there was not instant resolution of that.

Q You said that there's a day-and-a-half discussion beginning on Tuesday evening that concerns --

MR. MCCURRY: I'm sorry, it was a day and a half for work now. The staff is going to be working -- one of the reasons the President wanted to spend some time with our courageous and noble staffers is they are now going to work for the rest of the day today and they're apparently going to start about 9:00 a.m. tomorrow and they'll be able to work all day long tomorrow. That's not going to be any -- we're not going to arrange any press coverage of that, that's just the work they're going to be doing, both informal and probably getting together at various points.

Q Going back to -- how would you characterize the agreement so far money-wise? You won't say $100 billion. How would you characterize it -- issue-wise, money-wise?

MR. MCCURRY: Well, they've made good progress. It's a large sum of money, but it's not satisfactory -- wouldn't be sufficient to reach the balanced budget goals. That would require some additional decision-making that obviously wouldn't happen before Tuesday night.

Q Can you offer any color or anecdotal details of today's meeting?

MR. MCCURRY: Well, they continued -- we do the best on food more than anything else. (Laughter.) They had the traditional congressional meeting donuts back today, for some reason. We were on a health food kick yesterday, but today -- normally, when the bipartisan congressional leadership meet with the President they have wonderful donuts available. And they reappeared and quickly disappeared during the meeting today.

There was a lot of kibitzing. As the result of being together over the couple of days, there were moments where the partisan sides are able to tease each other or get little quips in on each other from time to time, and there was a fair amount of that going on. I don't have a specific example of that that I can think of off my head, but there's some of what I would describe as general ribbing back and forth.

The Speaker was concerned that we all make sure that --he was concerned about a question he got in the pool session this morning and he was nervous that we not over-interpret those -- the appearance on the Evans and Novak Show. Some of us watched that and some of us managed to stay awake through it. (Laughter.)

Q As he shouted Ron down -- did they discuss that? As he shouted Ron down, did he and the President then discuss that?

MR. MCCURRY: No, they didn't. They didn't, although the Speaker reached that with some of us and we didn't take any offense at his remarks.

Q You didn't take any offense at the remarks at all?

MR. MCCURRY: No. Compared to other things that he says, they -- (laughter.)

Q Dole and Gingrich have said before that they see Wednesday as sort of a deadline; they're going to be adjourning Congress and reopening Congress. Is there any sense that you'll know by Wednesday that you're going to have a deal or you're not going to have a deal?

MR. MCCURRY: You mean on this question of federal workers and --

Q No, no, no. No, over the budget deal, the budget negotiations.

Q The CR would expire -- I mean, they're saying that you're supposed to have it finished in the first session, which is --

MR. MCCURRY: In the statutory and in the first session is on Wednesday, and clearly one reason they're meeting Tuesday night is with that deadline in mind. But I wouldn't predict at this point it would be possible to get an outline of agreement by Wednesday. Certainly everyone hopes to get an agreement on a balanced budget as quickly as possible.

Q I watched the back-and-forth there. The money that we're not supposed to put a numerical figure on that's not necessarily $100 billion, but is something -- what does that concern?

MR. MCCURRY: I made that so absolutely, magnificently impenetrable, there would be no way you could answer that. (Laughter.) Look, the reason is as you look through these issues it could be -- they've got -- $100 billion is a rough estimate of some of the work that were in the so-called tier two issues that were being handled at the budget advisors level. That's where it has come from.

Now, if you look at some of the other issue areas -- the so-called tier three issues -- where they've identified some agreement in policy approaches, they've got considerably more than that, I would guess. But I can't put a dollar figure on that, nor should I, because it's subject to further discussion. And in any event, as we've said all along again, they have to get agreement on a whole package before it all matters.

Q Tier two is what? Tier two is nonentitlement, discretionary --

MR. MCCURRY: Tier one -- they've defined issues as they worked at both the staff and budget advisor issues as tier one, tier two, tier three issues, as they rank order some of the policy questions. And just, for example, in the area of revenues I think there were, what, Barry -- 70 separate issues that they needed to examine.

Now, they range from -- tier one would be something which there is a common approach both in the balanced budget act, in the President's approach on policy terms that's reflected in some of the other discussion documents they've looked at, whether it's Breaux-Chafee, whether it's Daschle, whether it's the coalition budget, that there's some commonality approach and they think they can lock in language that would satisfy everybody. So, in other words, a done deal; it looks like that will be easy to do.

Tier two are areas where there are differences, but they're fairly close. They can be significant policy issues, but there are ways in which you could bridge the gaps. And they concentrated a lot of work on the tier two issues. And I think that's where they found agreement that would take you beyond this mythical $100 billion that was reported somewhere today.

And then tier three issues are the more fundamental differences that really are central to getting final agreement. And as I say, those are ones in which they agree to sharpen up the discussion by really looking for how you define and analyze the tradeoffs that would have to happen in order to reconcile those two or three issues. But that's work that will have to go on on Tuesday.

Q Does it have to be balanced down to a penny? I mean, it has to be actually -- the numbers have to be coinciding totally?

MR. MCCURRY: Well, they -- it's more -- the more important issue and then more of these discussions have been around the policy has to be agreed to, how do you -- what's the policy going to be.

Q Are tax cuts on the table?

MR. MCCURRY: Tax relief for working families has always been on the table.

Q I didn't ask that. I asked would tax cuts --

Q When this is all finished, for each of the major topics they talked about will there be a figure for each of seven fiscal years that will be the limit leading to a zero deficit?

MR. MCCURRY: Well, when it's all said and done and they have a final agreement they will have a document that then can be scored by CBO that could produce that type of analysis, sure.

Q Going back to -- can you characterize at all this -- without the figure, what kind of subject areas there are agreement? How will you characterize the areas they have agreement on? You don't want to do it money-wise. Subject-wise, anything besides --

MR. MCCURRY: No, that's a -- I mean, substantively we're not -- that just is more fuel for a lot of incorrect speculation. And as the Speaker made the point today, that it has helped them that they've not tried to score points in the public discussion of these deliberations.

Q I just want to clarify -- if, for purpose of discussion the President is talking about CBO assumptions in all of these discussions, is he then acquiescing to CBO's growth predictions, its interest rate predictions?

MR. MCCURRY: Not necessarily. I mean, that might be that the issue of how you define assumption, will look at assumptions -- and more importantly, how you decided when certain budget features would trigger on or trigger off.

Q I'm sorry, could you run that past me one more time? You're saying he is not in agreement with the CBO --

MR. MCCURRY: I said that -- the question is about assumptions, has he agreed to lock in the CBO assumptions. I think that's still an area that the principals could explore as they look at issues like when certain budget features trigger on, trigger off, how you measure that and how you look at impact. For purposes of these discussions they have agreed to a CBO evaluation on what the budget options are. I'm not going to get any more specific than what I just said, although I just gave you a very good hint.

Q In talking about Medicare today and trying to talk about their differences of viewpoint on medical inflation, what are they -- whose numbers are they utilizing?

MR. MCCURRY: Well, for an informed discussion they use -- they were relying on budget experts at CBO, at HHS, they were looking at different types of analysis.

QQ Oh, this is the last tier thing where if you save money on discretionary in the last years then you have to trigger off, based on if you beat the CBO assumptions?

MR. MCCURRY: Well, trigger-on, trigger-off is an aspect of various budget proposals that are out there. There are some in the coalitions, there is one in the President's most recent offer.

Q What's he going to do at Hilton Head?

MR. MCCURRY: In Hilton Head he's looking forward to seeing his friends, first and foremost; spending time with his family; having dinner with his friends tonight and spending some time outdoors tomorrow. It's been raining --

Q What time do you expect --

Q Mike, will he say anything on going out to the helicopter?

MR. MCCURRY: No, I think he wants to just get down there and see his friends and have New Year's Eve with people he's spent New Year's Eve with for the last 12 years.

All right, happy New Year, everybody. Have a safe and prosperous 1996.

Q Did they all wish each other a happy New Year?

MR. MCCURRY: They did. Actually, they said goodbye to each other, happy New Year to each other. There was a little bit of discussion about travel plans for everybody. I think, as you know, Senator Dole after the senate session is going up to New Hampshire.

Q Did the President wish him well?

MR. MCCURRY: There was some good natured discussion. He's going for the first eve festivities, or something like that. I would say that there continues to be a good atmosphere in these discussions, but everybody is realistic enough to know that there are sharp differences that still exist and that there's a lot of hard work ahead.

Q Any idea when they're going to actually be done with any sort of an agreement on the seven-year plan -- to they have a time -- can't do it by Wednesday?

MR. MCCURRY: No, I think -- I think that everyone understands -- the President is very cognizant of the Speaker's concern about doing this within the statutory calendar of the first session. In fact, the President, at several points when it was suggested there's going to be a lot of work that would have to be done to get this discussion document together, that it might not be done by Tuesday, the President admonished everybody again and said it was very hard to ask people to work on the holiday. But that because of the Speaker's concern about January 3rd and that date, that it was important to have a meeting during the day on Tuesday, even if it had to be late in the day. So we understand the importance of that and that's why everyone is committed to trying to work this through as quickly as they can.

Q Do you think there will be meetings between the principals Wednesday, Thursday -- every day until there's --

MR. MCCURRY: I can't predict. I'm taking it a day at a day. I'll tell you what I know, they plan to meet Tuesday night and we'll see where we go from there.

Q So they have until midnight Wednesday night, Thursday morning -- or is that --

MR. MCCURRY: Well, that's not -- I want to make it clear that's not a -- that's a date that's important to the Speaker, for reasons that the Speaker can tell you because it relates to the statutory deadline of the first session, and it also relates to the continuing resolution issue. But I think we need -- you know, from our point of view we just need to continue to work to try to resolve the issues and do it as expeditiously as possible.

Q Is it midnight Tuesday or midnight Wednesday --

MR. MCCURRY: You should ask the House Speaker. It's their deadline, not ours.

Thank you.

END 1:00 P.M. EST

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