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Office of the Press Secretary

For Immediate Release January 16, 1996
                           PRESS BRIEFING
                           BY MIKE MCCURRY

The Briefing Room

1:15 P.M. EST

MR. MCCURRY: Let's begin the briefing. Brit? Brit Hume?

Q Mike, are you saying that when a snowstorm hits Washington, the people responsible for clearing the snow off of the White House sidewalks are non-essential?

MR. MCCURRY: I'm saying that when the government was shut down for four or five days last week, the Park Service was working with a skeletal staff. And with that skeletal staff, they addressed the driveways and the sidewalks that are critical for people getting into work. They're now trying to clear the area so that tourists that are here to visit the White House, can get in and out of the East Wing, and then they're going to work their way around here to where White House staff and members of the esteemed Press Corps have to egress and exit.

What is the opposite of egress? Access and regress. That's my regression analysis for the day. How long -- Ms. Braver, it's very good to see you. I haven't seen you in so long, I forgot your name.

Q I've been here.

MR. MCCURRY: What do you want to know?

Q I want to know whether there's any work being done at the staff level today or any plans for any today --

MR. MCCURRY: Absolutely.

Q -- on the budget meetings for tomorrow.

MR. MCCURRY: Everybody's been working on it. On the budget, the Chief of Staff has had several good sessions with the President's budget team, including the Secretary of the Treasury, the Director of the Office of Management and Budget, other people have been contributing so nobly to the budget negotiations. They met for an extended period this morning, are going to reconvene this afternoon to prepare for the President's meeting tomorrow with the Speaker, the Majority Leader, the two Democratic leaders and others in their effort to achieve a balanced budget agreement.

Q And if I can just follow that up, is there any work being done between White House staff and Capitol Hill at this point, particularly with Republicans on Capitol Hill?

MR. MCCURRY: Not of the negotiating time. There's been some contact, though, as they work out times for the meetings tomorrow. It will be somewhere in the 2:00 p.m.-3:00 p.m. range, is my understanding.

Q But not even any, "okay, let us be clear, this is your last position, this is our last position" kind of meetings?

MR. MCCURRY: I'm not aware of anything that attempted to move the discussions one way or another. There may have been some staff-level calls by way of clarification, but nothing that is central to the outcome of the deliberations.

Q Are you convinced that the Republicans will support a clean CR and the raising of the debt ceiling? I mean, is that -- that's the consensus?

MR. MCCURRY: Yes. We believe that the Chairman of the House Budget Committee is an authoritative spokesperson for the majority on such measures. And they certainly indicated they intend not to play any games now with shutting down the government or trying to jeopardize the full faith and credit of the United States government when it comes to the debt ceiling. So we take them at their word that they are going to move quickly and expeditiously on those matters necessary for the orderly conduct of the nation's business.

Q Mike, the President seemed to suggest at one point, at least, in his news conference last week that he would be prepared to meet this last proposal of the Republicans with a full-blown counter-offer of his own. Will he do that, or not?

MR. MCCURRY: I don't believe he said he would do that He said --

Q The premise of the question was -- I know because I asked it -- was why would this not be the time to do that since he had moved them farther from their position than he ever had before. And his answer began by saying, "that's my speech exactly." So one might take from that the suggestion that he might actually be ready to meet their position with one of his on.

MR. MCCURRY: I'll go back and look at exactly what he said. But I took him to mean, based on my conversations with him, I think what he meant to communicate is that his offer at the conclusion of the talks when they last broke, as an attempt to break through that impasse, give them some additional things to think about that could result in an agreement.

Q But he has acknowledged that that was some idea, but was not a full-blown counter-offer. Does he not owe them a full-blow counter-offer?

MR. MCCURRY: They're at a point in these discussions where ideas are moving back and forth across the table, and that is in a sense a counter-offer, at least an idea to bridge some of the differences. I'm not sure -- we may be just wrestling with a semantic difference, but the President has put forward a plan, it's a balanced budget plan, and they're now negotiating over the elements of what should be in the final agreement.

Q Raising the debt ceiling -- is it your understanding that they're willing to do that with no strings attached?

MR. MCCURRY: As Congressman Kasich indicated on Sunday, yes.

Q You said that there was nothing going on today that attempted to move the discussions one way or the other. Has there been anything that tried to move the discussion one way or another since the talks went into recess last week?

MR. MCCURRY: The President had one conversation with Senator Dole, as you know. I'm not aware of any other conversations he's had to attempt to bridge the differences. He's looking forward to discussions tomorrow, and at the staff level, they've not attempted to negotiate things that now are before the budget principals.

Q Are we still looking at 3:00 p.m.?

MR. MCCURRY: Yes. That's my understanding, but that's subject to finalizing the schedules with all of the participants.

Q Immediately following Terry's question, why weren't there staff contacts when we were told that was the reason they were breaking and the staff would continue working through the break?

MR. MCCURRY: Because there wasn't the ability to do any additional work that would illuminate the work of the negotiators. They are at the point now where they've got to sit down and wrestle with these issues. There was -- I believe there may have been some lower-level staff discussions clarifying some points of the deliberations. I can check on that, because I think there has been some staff contact, but nothing at the budget advisors' level, i.e., the Panetta-Kasich-Domenici level.

Q Who discovered that there was nothing to do, and when did they discover it? Because that wasn't what we were told going into it.

MR. MCCURRY: That's a rhetorical --

Q That's a legitimate question.

MR. MCCURRY: The question is -- look, they are at a point where if there is going to be an agreement, it's going to be reached by the President, the Speaker, the Majority Leader, the Democratic leaders. Those are the participants in these negotiations. Everybody knows that. I think they've got a very good understanding of what the issues are, and my assumption is that the Chief of Staff, and on the Republican side, the chairs of the Budget Committees, didn't feel there was additional work or information they needed to bring to the deliberations and the principals.

Q Mike, just what is your expectation of this meeting tomorrow? What do you see happening?

MR. MCCURRY: As Senator Dole has said correctly, probably it could go either way. There could be further progress towards a balanced budget agreement or further differences that make that agreement difficult to reach.

Q Mike, Congressman Gingrich and Congressman Kasich have been saying that the differences are profound. The President has been more optimistic. Do you feel that --

MR. MCCURRY: The President, I think, was real clear at the press conference last week that there are some fundamental differences in approach as to policy, particularly the desire by some members of the Republican majority to fundamentally restructure Medicare. They want to fundamentally alter the nature of their program that has served the nation's elderly well.

The President doesn't believe that is an issue that they can reach agreement upon in the context of these budget discussions, but, certainly, we can get some agreement on Medicare savings, we can get some agreement on how we structure a balanced budget agreement that takes into account the President's views on Medicare and the Republican majority's views on Medicare.

There are some issues, though, that will have to be set aside, and among them are whether or not we're going to have Medicare as a voluntary system so that it withers away. That's a whole different discussion. That's not one that is going to be resolved in the context of these deliberations. But it should not, as the President suggested last week, stand in the way of getting a balanced budget agreement.

Q Are you saying it is not going to happen now?

Q Mike, regardless of what you think the Republicans deep in their hearts want to do to Medicare, what Republican proposals that they've made in the context of these budget negotiations turn Medicare into a voluntary system that will wither away?

MR. MCCURRY: Well, they have not proposed -- to the point, they have not proposed that to date in these discussions. The notion that they now would somehow come forward, they have suggested, whether its MSAs, whether it's some of the restructuring they want to do, whether it's premium increases, they would like to see -- they have suggested some things that we have answered and parried in the context of budget deliberations.

But when they begin to talk as they did over the weekend of, well, it's not really a seven-year balanced budget agreement scored by the CBO that's important to us, it's fundamental reform of our entire entitlement sector in the budget, that's something new to us. And that's not been a part of these deliberations, and I don't know that they need to get into it.

Q Then why are you worried about it? Why are you fretting about a bunch of stuff that gets said on -- I mean, if you worried about that all the time, you'd never get anything done. Why aren't you --

MR. MCCURRY: Good question. That's absolutely what the President -- exactly what the President said.

Q Then why are you not dealing with what's been said in --

MR. MCCURRY: We agree with you once again. You're giving our speech again, Brit.

Q Fine, Mike. But you're saying that what's holding things back here is your deep-seated fear what might be in the back of some Republican's mind.

MR. MCCURRY: Nothing is holding us back. The President has made it clear -- nothing is holding us back from getting a balanced budget agreement right now. That's what he keeps saying.

Q -- that they're insisting on fundamentally restructuring Medicare. How are they insisting on that?

MR. MCCURRY: We don't know. That's the first time that they've said that --

Q Then how do you know that they're doing it?

MR. MCCURRY: Because when he was on ABC television, the Chairman of the House Budget Committee, this past weekend, he said their goal has somehow now changed, that they really aren't going to get an agreement because they want fundamental restructuring of Medicare.

Q -- your whole idea was to keep the negotiations at the table? Aren't you basing everything on the real negotiations that go on at the table, not on talk shows? Wasn't that the whole idea?

MR. MCCURRY: Sure. And that's why the President is optimistic we can get an agreement. Because you can get an agreement, you can protect Medicare, get the necessary savings from Medicare. You can't fundamentally restructure Medicare and generate the additional savings that pays for an unnecessarily large tax cut. That's the equation. The equation hasn't changed.

Q If there's no agreement, would it be very -- I presume it would be very difficult for the President to veto targeted appropriations that would keep big chunks of the U.S. government operating.

MR. MCCURRY: Well, as the Chief of Staff indicated over the weekend, the President would have to veto unacceptable measures that don't allow for the legitimate functioning of the government. There's been some suggestions that they ought to just de-fund parts of government that they don't like. Well, our system doesn't work that way. If they want to repeal the Occupational Safety and Health Act, or if they want to take away the legitimate rights of workers expressed through the National Labor Relations Board, they have to go back an win that type of legislation and pass it. You essentially are trying to do something they suggest by defunding parts of government that they don't like, and that's just the same part of the equation that we've been in already.

Q So he would veto such measures.

MR. MCCURRY: As Chief of Staff Panetta --

Q So he would shut down everything funded by a bill in order to protect OSHA or NLRB. Is that correct?

MR. MCCURRY: As the President said, exactly because you're trying to identify those parts of government that you like and those parts that you don't, it's very hard to accomplish what they want to do through this targeted approach.

Q So?

MR. MCCURRY: It's not clear that they, themselves, would even be able to pass that type of an appropriations measure.

Q Well, that doesn't answer the question, though. Are you saying he would veto measures to protect those agencies that they've tried to de-fund -- is that right?

MR. MCCURRY: The President would veto measures that he finds unacceptable.

Q So what's the difference between -- if I could just clarify, though, what's the difference between that kind of targeting appropriations and a line-item veto, which you would support as well? Wouldn't that exactly have the same impact in defunding parts of the government that you don't like?

MR. MCCURRY: Well, a line-item veto is something that the Republican Majority in Congress wants to give to the President, or so they say.

Q Well, he also wants it himself, doesn't he?

MR. MCCURRY: We would like to have that.

Q Right. Okay. And the question is, what's the difference between line-item veto by the President using that authority if he had it, and what's being described here by the Republican Congress?

MR. MCCURRY: That's not the way -- the Budget Act requires appropriations to be presented through the committee structure to the President after their proper consideration by the Congress.

Q Wait a minute. You're saying the Budget Act requires that all agencies be funded at a level acceptable to the President of the United States?

MR. MCCURRY: No, I'm saying the Budget Act requires them to go through and take the authorizing -- you know, the Congress has passed laws that mandate certain activities by the federal government. They are, in a sense, authorized, they then need to be appropriated, fully appropriated or partially appropriated, or appropriated at the levels the Congress suggests, and the President can then find that acceptable or unacceptable. He can choose to veto those measures that he finds unacceptable. This President has done that, and the Congress is now trying to decide how they can carry out their constitutional responsibility to manage the purse, which is their responsibility, constitutionally.

Q At several key junctures of this budget fight, you haven't asked that the President has talked on the telephone with Senator Dole, and there seems to be a pattern now where he talks on the phone with Dole, but he doesn't talk on the phone with the Speaker. What accounts for that --

MR. MCCURRY: It sometimes reflects the President's view of how best to proceed; it sometimes, frankly, reflects Senator Dole's view on how best to proceed, but the President has also, on occasion, reached out and sought the counsel of Speaker Gingrich. He didn't in this most recent incident, but he has on other occasions, and I believe that most likely he will in the future, too.

Q Well, the impression you're giving is that it's sort of a 50-50 proposition between the President and the Senate Majority Leader that they're better off chatting without having Gingrich in certain --

MR. MCCURRY: I apologize for leaving you with that impression, because it's clear if it was to the Majority Leader's liking and the President's liking, we would have had an agreement a long time ago.

Q Mike, just to get clear on the Medicare issue, you said you can't fundamentally restructure Medicare and get the kind of savings to paper a tax cut. So does the President believe that $160 billion in savings from Medicare equals a fundamental restructuring of the program?

MR. MCCURRY: There are different ways of generating that savings, and there are some ideas around to do it in a way that would not necessarily be fundamental restructure. But the point is, it's more savings than you need to generate from the Medicare program unless -- unless you're insisting and drawing a line in the sand on a tax cut that is probably not possible under the budget track that we've developed.

Q Right. But what they are offering right now, they have on the table $160 billion in savings done in a certain way. Does he believe that that amount of savings done with their policies backing it up would result in a fundamental restructuring of Medicare?

MR. MCCURRY: Some aspects of it would, particularly the way they apply the medical savings account experiment. The President is willing to introduce some experimentation into the competitive providing of services and benefits under Medicare, but to do that through a wholesale change of the program would border on fundamental restructuring.

Q If I understand this, Mike, it's not now the level of cuts. Previously the President had said you could not take the level of cuts the Republicans initially proposed out of Medicare, Medicaid and have them not fundamentally change the system. Now it's how the cuts are applied. If the President himself were to perhaps manage that level of cuts to his liking, that level could be taken from Medicare?

MR. MCCURRY: Well, let me suggest it a different way. The way we suggested it, we can generate up to $124 billion of savings from Medicare, introduce competitive experiments into the health care sector that provides services and benefits to the elderly in ways that save money for the taxpayers. You can experiment with that type of concept. But to go beyond that really does risk fundamentally changing the program.

Q But that's a little bit different than your answer to Maura, if I understand it. She asked if $160 billion in savings was possible without fundamentally changing the system.

MR. MCCURRY: And I'd say that it's most likely you would have to have fundamental changes to get that level of savings.

Q Going back to the question about CRs and targeting, if you oppose targeted CRs, would you accept a long-term continuing resolution under the same terms that you have right now, the same spending levels?

MR. MCCURRY: We would not want to accept that level of funding because that requires enormous reductions across the board in many programs that the President believes need to be fully funded. That's not a -- that's a poor excuse for getting on with the business of reaching a balanced budget agreement that provide regular and necessary appropriations for those programs that are agreed upon in the context of these current deliberations.

Now, you know, you'll have to ask me down the road if you can't get that what kind of continuing resolution are we going to have to live with, and I can't speculate on that at this point because we're not at a point where that's a germane speculation.

Q Well, you said that you expect them to come in and talk about the terms for extending the CR.

MR. MCCURRY: Based on what --

Q -- terms do you want? You're saying you want more spending.

MR. MCCURRY: Yes. Based on what they've said, they're not going to monkey around with government shutdowns or debt ceilings as a way to try to force their budget priorities. They've now sort of given up that tactic, and they just want to get on with passing measures that extend whatever funding for government can be extended while they negotiate the budget, and also take care of the necessary business of extending the debt ceiling. So we just assume that is going to be done, though.

Q On another subject, do you have any comment on the decision of the Prime Minister Andreas Papandreou will step down from the power?

MR. MCCURRY: Well, we do understand that he's resigned. We understand and are sympathetic to the fact that he has been ill for sometime, the President has on previous occasions sent get well messages to the Prime Minister. We certainly hope and pray that he will have a speedy recovery.

During his time in office, Prime Minister Papandreou has worked to deepen the very warm ties that exist between the United States and Greece; he's played to one of his strengths as a personal negotiator on behalf of peace in the Balkans, the work that he's done to try to relieve tensions between Albania, Greece, the Former Yugoslav Republic of Macedonia have been particularly important in that regard. We look forward to a continued close working relationship with his successor.

Q Mike, what's the level of concern here at the White House about what's going on in Chechnya, and has the administration been speaking with the Yeltsin government specifically about it?

MR. MCCURRY: About Chechnya? There has been contact via our embassy and there will be a series of higher level contacts between our governments that they will be detailing at the State Department later on today. But I would say in general, we are concerned both with hostage-taking, because as a tactic of terror that has simply no justification and deserves condemnation, but we also understand that the Russians themselves and President Yeltsin in particular are in a difficult position, but we regard the use of military force to try to resolve this situation one that most likely will deepen the conflict rather than provide for its peaceful resolution. And in that sense, we are troubled and concerned by the use of force over this past weekend as well.

Q Can you give us an official statement from the White House on the capture by the Mexican government of Juan Garcia Abrego, and extradition to the U.S.?

MR. MCCURRY: I did earlier today and will do so again. Obviously, we are delighted with the capture of Juan Garcia Abrego, the extradition -- the arrest itself was a major coup for Mexican law enforcement officials, for the counternarcotic efforts that we have been pursuing in collaboration with the Mexican government.

We believe, also, the apprehension, arrest and delivery to the United States for justice is someone who is so central to the narco trafficking trade itself is a demonstration that Mexico is deeply serious when it comes to addressing this very fundamental problem that threatens both sides of our common border.

There's going to be a press conference later on today that several of the Justice Department and FBI folks who have been involved in this will be involved in the prosecution, will brief further on what the plans are, but we are deeply grateful to the Mexican government for the very effective law enforcement work, grateful that our cooperation and collaboration in fighting the drug trafficking has produced such a handsome bounty.

Q What time is that press conference?

Q A Bosnia question. Some people have been expressing concern about the performance of Mr. Bildt in the civilian communication in Bosnia. How does the U.S. think he is doing?

MR. MCCURRY: The President had a good opportunity to meet with Carl Bildt this past weekend to review the work that they are doing on civilian implementation. He, himself, points out correctly, I think, is essentially starting from scratch when it comes to civilian reconstruction efforts in Bosnia, unlike the military effort which is well-prepared, well-planned and well-developed because of all of the work that NATO had done, but at the same time, we have encouraged Mr. Bildt to work as aggressively as possible to follow through on the civilian aspects of the Dayton Accords, because the most important thing in the President's view is for the people of Bosnia to see that changes in their lives, positive changes, are taking place as a result of the peace agreements and that the leaders have committed themselves, too. And we are fully engaged now with our own effort to support Mr. Bildt's work.

Ambassador Bob Gallucci is assisting in his efforts, and we will continue to encourage Mr. Bildt to work within the international community, particularly within the European Union to stimulate the effort of economic reconstruction and civilian reconciliation that is central to the peace process.

Q Mike, I don't quite understand your policy with regard to terrorism as it relates to Chechnya. If you're troubled by the use of military force to subdue a hostage situation, we used force after the Marine barracks thing in Lebanon, we bombed the hell out of Gadhafi and Libya when we suspected terrorist involvement. Would the President of the United States, confronted with a similar situation of 100 American hostages, having waited several days, tried negotiations, never use military force in a hostage situation?

MR. MCCURRY: It's interesting, but a question that falls on the central premise that there is a comparable situation that arises. We're talking about ethnic conflict that has existed in the Transcaucasus that has been amenable to peaceful resolution and peaceful discussions. Our point is that the use of military force in this incident has allowed the situation to escalate has diminished the possibility for peaceful resolutions in some cases of legitimate concerns that have been raised, and that's why we continue to believe that under the auspices of the OSCE and others who have been there in the past pursuing peaceful dialogue that that is a preferable way to resolve these differences. Obviously, the loss of life, whether it's the hostage or the Russian soldier involved, is a source of concern.

Q Are you saying overall the Chechen conflict has been amenable to peaceful --

MR. MCCURRY: As it said, it has in the past shown some signs of being amenable to peaceful resolution. There have been points during this conflict where both sides have been able to achieve some of their desired goals through negotiation. It certainly was in part the case in the past when there was some similar instance of hostage-taking. It's been the case that they've addressed issues surrounding the use of force around Grozny. Our point is that they need to try peaceful resolution because we believe it could be fruitful.

Q Speaker Gingrich indicated that Republicans will end negotiations if no deal is reached. Do you see the possibility of the suspension of negotiations --

MR. MCCURRY: At this point, I cannot predict. I believe, as I said earlier, it's possible for them to achieve an outcome that would be to both sides' liking; that is, the ratification of a balanced budget agreement that achieves the goal of a balanced budget within seven years as scored by the CBO, but there are differences that have not been bridged at this point that might make it also impossible to achieve that outcome.

Q Mike, is there any indication that the AmeriCorps volunteers have been active in trying to assist the snow removal efforts in these hard-hit areas?

MR. MCCURRY: I don't know. Let's run that down. We'll just check.

Q Is that the kind of work that the President would anticipate that they'd be available to do, or are they busier with higher callings?

MR. MCCURRY: They work in a variety of different ways in the communities in which they serve, and they may, in fact, be doing some of that type of work. I honestly don't know, but we can check.

Q Mike, the Kemp Commission Report due out tomorrow or most certainly some time this week, can you refresh my memory as to what the President has said, if anything, in the past on the subject of a flat tax?

MR. MCCURRY: What we have said and what the Treasury Secretary has said is that we like the idea of reforming our tax code to make it simpler for all Americans. But when we do so, we think we need to do it in a way that is balanced, that's sensible, that's revenue-neutral, that doesn't exacerbate budget deficit problems. And the problem that we've got is, you know, flat taxes sound great. I think everyone would like the idea of filling out a post card and that's all you have to do to satisfy the IRS.

But it's not quite so simple once you get into the details. More importantly, when you get into the details of proposals like Representative Armey's, for example, you suddenly see the deficit blooming to additional trillion dollars of debt over seven years that makes these kinds of proposals budget busting unless you want to substantially raise taxes on middle-income Americans.

We thought it was very interesting that Congressman Kemp's chief tax staffer for so many years on the Hill himself now says that he was sort of nudged out of the Kemp Commission's work because he kept pointing out that some impact of flat tax proposals could be disproportionately heavy on working Americans and on middle-class Americans.

You know, too often these become schemes to reward the wealthiest in our society. So we're looking for ways to reform taxes that are fair and that bring relief to middle-class Americans and that's why the President on balance has pursued the initiatives that he's pursued with the Middle Class Bill of Rights with trying to expand the IRA program, with trying to help people who are saving for education or provide for child care, why we've adamantly opposed raising taxes on working Americans by cutting back on the Earned Income Tax Credit program.

Q Mike, do you claim that those proposals that you've just outlined simplify the tax code?

MR. MCCURRY: No. I'm saying that they provide tax relief. What we're interested in is giving hard-pressed, middle-income tax payers some tax relief that they deserve. Our problem with flat tax proposals is when you scrape away the details and begin to look at them, they result in tax increases on exactly those middle-income taxpayers -- if you assume that you don't want to make the budget deficit situation worse.

Q Well, may we take it from the enthusiasm that you've described for a simpler tax code that the President and his Treasury Secretary are going to be coming up with a plan to simplify and streamline the tax code?

MR. MCCURRY: The Treasury Secretary has testified often that they are exploring ways at Treasury that they could make the tax code simpler and fairer for Americans. That is harder work to do than to say, hey, let's everyone fill out a post card and send it in to the IRS.

Q Well, when might such a proposal be forthcoming, if ever?

MR. MCCURRY: That's good for the coming year, the second term and beyond. That's probably something that the President would like to work on for the rest of this century to make taxes fairer and simpler and easier for Americans to comprehend.

Q With the retirement of Senator Cohen, is the White House concerned that moderate seems to be a disappearing breed in the United States Senate?

MR. MCCURRY: The President is concerned that the center in American politics not lose the capacity to govern. You've heard him talk often about common ground and Senator Cohen was one who very often searched for that common ground himself. We would be very discouraged by anything that exacerbated the divisions in American political life and tilted our Congress towards the extremes in both parties as opposed to the center that can reasonably govern.

Q Just to be clear about tomorrow, the Republicans have accepted, the Speaker and the Majority Leader have said officially that they will be here?

MR. MCCURRY: As we indicated at the conclusion of their last meeting, they had agreed to meet tomorrow and it's clear from the staff preparations taking place that everyone seems to be planning to go ahead with the meeting.

Q Does the President have a position on the telecommunications bill, and does he agree with Senator Dole that just letting the broadcasters have these extra frequencies instead of having to bid for them at auction is the right thing to do?

MR. MCCURRY: The President has a very important position on the telecommunications bill. He's strongly in favor of it because his Vice President helped negotiate the conference agreement that's now pending. The point that we have made privately to Senator Dole and made in some considerable detail is that there's nothing about the conference agreement on the telecommunications bill that requires or prevents -- I'm sorry, I should say it the other way -- that prevents the auctioning of portions of the spectrum. In fact, we've had our own spectrum auction provision proposal made in the context of the budget deliberations.

Our view is you ought to achieve this very necessary reform of our telecommunications laws that will enhance competition, that will prevent against the aggregation of media ownership in the hands of a very few and very powerful, that will help them do all the good things that it would do in both the telephone and cable and broadcast industries to bring competition and lower rates to consumers, but simultaneously set aside the strict budget question of how much can you raise through a spectrum auction and resolve that in the course of the budget deliberations. And the language in the final conference report is quite clear in saying that that can be done.

Q Does he think that when it comes to digitizing these extra channels, that the broadcasters should have to bid for them?

MR. MCCURRY: We have a very specific view of spectrum allocation and revenue generated from that that we have shared with the Republican side in the context of the budget negotiations. I don't want to go into too much detail on that. But we -- the important thing is that's not a barrier to getting this conference report signed and passed. It was negotiated in good faith after a lot of hard work. And as the Vice President has said, it's a good piece of legislation that ought to be passed. And Senator Dole's concern really, we believe, are not germane to the issue of whether or not we ought to proceed with this necessary reform.

Q Getting back to flat tax, I thought that the President indicated in the past that he might support a variant of the flat tax if it not only maintains a neutral position on revenue, but either keeps or improves the progressivity of the present system. Dick Gephardt, as I understand it, has introduced legislation that doesn't have a simple flat tax, but has two or three tiers, but elimination of virtually all deductions, so that you have tremendous simplification and, at the same time, you don't run into the kind of lack of progressivity problems that you've been outlining. If you can structure a variant of a flat tax along those lines, might the President accede?

MR. MCCURRY: As the President has indicated, if you can find a way to reform our tax system so it brings more simplicity to the average American taxpayer so that it's fair and so that it is also fiscally responsible. And the President believes that might, in fact, be sound economic policy, in addition to good tax policy. It might help create a situation in which there is greater investment and more capital growth, a stronger economy, more job creation. Those are good things.

That's very hard to do, though, and that's not as simple as saying, well, we're going to have one rate, you fill out a postcard and that's all you have to do in order to meet your tax obligation. So we are looking at ways that you could reform. Some of those might involve flattening tax rates, in fact, but the key thing is that it be done in a way that's prudent, that is fiscally responsible -- in other words, doesn't add to the deficit -- and that it doesn't result in additional tax burdens on people who are already burdened enough, the middle income in this country.

And our concern about some proposals, for example, the only real legislative proposal that's out there right now is Congressman Armey's -- that's why I'm picking on it, because the Kemp Commission has not come forward with any specific proposal; in fact, it may not, according to the latest reports -- but Congressman Armey's proposal, we believe, and the Treasury Department analysts believe, would add about a trillion dollars to the deficit over seven years unless you're going to have a big tax increase that would fall, we believe, heavily on middle-income people, because you'd have to raise the rates in order to make up that lost revenue.

Q So the President feels that under whatever flat tax or variant thereof one might enact, Steve Forbes ought to be paying more in taxes --

MR. MCCURRY: The President has absolutely no knowledge of what his tax situation is. But what the President has said is that the flat tax concept sounds great; let's look at the details to make sure that it's a good deal for the American taxpayer. And once you do that, in the proposals he's aware of, you don't get down to satisfactory answers.

Now, Mr. Forbes has got a proposal that I think is being criticized pretty heavily by his Republican presidential opponents. That's a debate that they have to sort out for themselves on their side of the aisle.

Q I wonder if you could give us a heads-up for events for the rest of the week and travel beyond?

MR. MCCURRY: I'm not aware of any travel on the President's schedule until next month. His week is going to be devoted to the budget, to preparing his argumentation for the State of the Union. What else do we have on the schedule this week?

Q Will that be domestic and foreign?

MR. MCCURRY: There would be elements of both in his State of the Union -- that's right.

Q Which budget, '96, '97?

MR. MCCURRY: There's little work that's possible -- my understanding is it's very well work possible on the FY '97 budget request because you have to have a starting point, and nobody knows what the starting point is going to be at this point.

Q Mike, has the President come to any conclusion about the allegations against his Ambassador to the Vatican?

MR. MCCURRY: I don't know that he has looked into that. I'm aware that that matter has been addressed at the State Department, and I'm not aware of any different point of view on our point.

Q What's the view over here at the White House generally?

MR. MCCURRY: I don't know that we have a view or have looked into it. I'll have to check and take the question.

Q Well, if indeed, the correspondence is being used on the basis it was, is that acceptable behavior?

MR. MCCURRY: I think the State Department has already agreed that that's not acceptable, and the White House would share that view. But I'll go back and check and see what precisely they have done in connection to that.

Q Is anybody at the White House specifically monitoring the Whitewater hearings today to see if there's any actions the White House needs to take in response to them?

MR. MCCURRY: The Legal Counsel's Office is and information about their work, monitoring that, you can get from Mr. Fabiani.

Q Mike, there's another resignation in Moscow -- Mr. Chubays has resigned. And that's like number three recently in the --

MR. MCCURRY: I didn't -- I was not aware of that. Did that just happen, just break?

Q Yes.

MR. MCCURRY: We'll have to get -- as a very noted, very well respected economist who has been so central in the effort to bring privitization and market elements into the Russian economy. And we will have to look and see how that affects the overall composition of the Yeltsin government, which is clearly undergoing some changes as they examine their own policy needs and sort through their own domestic debates and clearly in advancing part of a likely presidential election.

Q Mike, one final thing. Newt Gingrich in a Detroit speech said today, quote: "I'll meet with Dole and Armey in the morning; we'll meet with the President if he has something to offer. We're not going to be props of the charade." Does the President have something to offer tomorrow?

MR. MCCURRY: He's already offered. As the President said, they have an idea that -- the President's idea is the one most recently on the table, is pending for them. The Speaker knows that, and I'm sure the President looks forward to a good meeting with the Speaker and the Majority Leader tomorrow.

Q Mike, has Mrs. Clinton or any of her representatives had any formal or informal talks with the congressional committees or their staffs, apart from the public comments she's made in recent days, about her potential willingness if the circumstances were right to testify there, or have they asked to talk with her? Have they undertaken to hold any discussions about the circumstances that that might --

MR. MCCURRY: I'm not aware of any such conversations, but I'd ask that you check with the First Lady's Press Office.

Q -- flat tax also --

MR. MCCURRY: I can't hear your question, Paula. I'm sorry.

Q Does your objection to the flat tax also extend to tinkering with the mortgage interest deduction --

MR. MCCURRY: Well, the mortgage interest deduction has been a very important incentive for homeownership and made it possible for many modest income Americans to afford a home. I think there would be great concern at changing some of the fundamental tax relationships that make it possible for Americans to purchase a home and to afford it because of the effect that it has on their tax liability. But that's one of the complicated questions that needs to be addressed when you get into the whole subject of tax reform and one of the reasons why, as I said earlier, it's not so easy as to just say we figure out the amount and fill out the postcard.

Thank you.

END 1:53 P.M. EST