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Office of the Press Secretary

For Immediate Release January 30, 1996
                           PRESS BRIEFING
                           BY MIKE MCCURRY

The Briefing Room

1:36 P.M. EST

MR. MCCURRY: Good afternoon, ladies and gentlemen. I apologize for being tardy, and because of that I will go directly to your questions, if you have any.

Q Why is the President bringing in these Democrats to talk about the budget today?

MR. MCCURRY: The President of the United States wants to meet with a cross section of Democrats in the House of Representatives in furtherance of his very fervent desire to balance this budget by a time certain. He believes an historic agreement to balance the budget in seven years is within grasp, and he's not going to miss the opportunity to try to get that type of an agreement.

And what we are doing, in a variety of ways, is reaching out to centrists, to moderates, to anyone who supports the goal of a balanced budget because the President firmly believes a majority of this Congress will support a common sense effort to balance the budget in a time certain. We're reaching out to a variety of factions or caucuses within the Congress to try to achieve that.

Q Is he concerned that some of these moderate or conservative Democrats might make a deal with the Republicans?

MR. MCCURRY: There's been no indication that that would happen. In fact, to the contrary, there have been some suggestions from some Republican leaders that they're giving up on the effort. Now, amongst Republican followers in the Congress, there's more of an indication that they're willing to try to seize this moment and achieve a truly historic agreement to balance the budget. And the President doesn't want to spare any effort in trying to reach that goal.

Q Mike, are you prepared to comment on the GAO report on the Travel Office?


Q Go ahead.

MR. MCCURRY: It was very encouraging in many respects. The letter that was sent to Chairman Clinger indicates that -- let's go back a little bit. In May of 1993, following the audit that was conducted of the Travel Office, there were 25 management criteria developed. At that time it was indicated that the White House Travel Office had satisfied only six of those 25 criteria.

The new study by the GAO, or the report that they made to Chairman Clinger, indicates now that 26 of those 29 categories have been satisfied; and in the three areas -- which were bank reconciliations, late press billings and late vendor payments -- it's quite clear that we have in place the procedures that can help meet those and implement those management criteria over time.

So, on balance, as we indicated in our submission, which is attached to the letter that the GAO has sent to the committee, if you compare the May '93 results to the August '95 results and the picture now that the GAO has drawn of the management practices at the Travel Office you can see -- reason to see that there's been a great deal of progress in the management of the office.

Q Is there concern about the fact that the report could not cover the eight-month period following the firings of the staff there because of a lack of adequate recordkeeping, which is supposedly the reason why the staff was fired in the first place?

MR. MCCURRY: Well, there's not a question of adequate recordkeeping. It's a question of two separate records being kept, because they basically started over in June of 1993 and instituted new practices reflecting the recommendations from both the GAO and from the auditing firm. And since then, they have now sent to your news organizations every month two accounts, basically, that reflect the period prior to June and the period post-June.

Now, one other thing suggested by this report and suggested by the study last year is that they needed to concentrate first and foremost on meeting some of these criteria that have been met. Frankly, a five-person staff -- there was an erroneous report out that there are nine people who work there. There are five who work there. The five have concentrated on meeting the bulk of those criteria that have been laid out by the GAO and by the auditing firm. In each respect, I think they've done a very good job.

Now some of these areas they're going back to now. For example, on the question of late press billings, which was one of the issues that the GAO cites, we've been working individually with each news organization represented in this room to clear off those back debts that are out. Now, frankly, I'd encourage all of you go to the folks -- if you're concerned about this, go to the folks who keep your records and do your books and tell them, don't require this five-person staff to come chase you down to pay your bills. You know you owe the money, so pay it. And if we get -- we need to get a lot --

Q You should be careful about that. I think it's been a quite common practice for bills from the Travel Office to arrive grievously late --

MR. MCCURRY: Well, that's --

Q And significantly in error.

Q -- budgets of news organizations.

MR. MCCURRY: That's why the current office has imposed now a 15-day billing cycle, and they're implementing that. They've been moving forward. One of the things they've done is they take costs that are incurred at the point of contact on the road and now incorporate that into the billing cycle and get the bills out in a more timely way to your bookkeepers.

Q Are you saying, in effect, that this report constitutes a clean bill of health for the --

             MR. MCCURRY:  No, it constitutes factually a report that 
in 29 areas, 26 of the management criteria     spelled out have been 

met. And there are three shortcomings and they were addressed, and we are working with your news organizations to deal with it.

Q Well, you've had people out saying -- on talks shows and elsewhere -- that all the problems with the Travel Office that were discovered during the period when those people were all summarily canned have been solved. That clearly is not true, based on --

MR. MCCURRY: Well, first of all, let me correct one part. We haven't had anybody out saying anything. And people have said some things and, frankly, the President finds some statements that have been made objectionable, and things that are not proper to be discussed. I am referring specifically to comments on plea bargaining.

Q Mr. Bennett?

MR. MCCURRY: But what we have gone out and said --

Q Well, does that guy not speak for him. It's his lawyer.

MR. MCCURRY: Well, he was -- the President did not in any way indicate to Mr. Bennett that he wanted him out there making that kind of statement.

Q Has Mr. Bennett been chastised for that?

MR. MCCURRY: But in any event, the issue is whether or not the White House Travel Office has instituted the recommended management criteria and made progress in the way the financial affairs of that office are managed after the GAO, after the White House and after the accounting firm itself found significant financial management weaknesses in May of 1993.

And the answer in this report and in this letter that has been sent to Chairman Clinger is that there has been significant progress in implementing those procedures. As a result, you've got a better run office that's meeting accounting standards, professional accounting standards, and the problems that remain in some three of 29 areas, they are addressing.

Q Mike, this just isn't --

Q Did you say the President was offended by Mr. Bennett's remarks on the --

MR. MCCURRY: No, I just said he didn't authorize them. There was a suggestion here that we had people out saying things, and to my knowledge we didn't.

Q Well, you've got Ann Lewis out there talking about this, too.

Q Did the President indicate to Mr. Bennett that he shouldn't be saying these things or --

MR. MCCURRY: I don't know if the President has, but it's been suggested that that's not a line of argumentation that the White House finds acceptable.

Q But it does get confusing because Bennett represents Harry Thomason also on the Travel Office issue, but represents the President on the Paula Jones issue.

MR. MCCURRY: I didn't know that.

Q Mike, to say that this is now a better run office really stands reality on its head. I mean, this is a better run office compared to the chaos that existed after an office that was working was dismantled.

MR. MCCURRY: Well, the office was not working particularly well, and that's now been documented in the studies that have been done. There were serious financial weaknesses, they've been catalogued in the reports that have been done, both by the accounting firm, by the GAO and by the White House's own internal review.

It's being better run now, and that has now been attested to by Mr. David Clark, who is the Director of Audit, Oversight and Liaison for the GAO, who went in and looked at how we are doing as an update to the committee in instituting the management criteria that have been spelled out in respect -- across the board, of the areas they've looked at, there has been significant improvement. And they found that improvement, by the way, going back to the last -- the study that the GAO did in August of 1994 documented that same increase.

Q Mike, the bottom line, though, is that the GAO found that -- you may say 26 or 29, but the GAO found that they were unable to balance their books because they omitted $200,000 in deposits. So the bottom line is they weren't able to balance their books.

MR. MCCURRY: That was for the period that they covered in that report. Now, that's a question of reconciling a bank account. The Travel Office has now been current in balancing its checkbook since August of 1995. The last bank reconciliation was done on January 20th, it covered the month of December, 1995. And the process of reconciling the accounts itself started with the current director. Now, the current director, when she took over, put the highest priority on implementing some of these areas that were indicated as serious weaknesses in the previous report. And they had a lot of work they, frankly, had to clean up. And that's what they've been doing and they're running the process better.

Q Well, what about the -- also they were saying they didn't even obey their own rules to -- with getting back the payment within 45 days.

MR. MCCURRY: Well, they are working on that. Now, they work on a dollar-to-dollar basis. They pay vendors based on the reimbursements they get from your news organizations. Now, what's the problem with that? The problem is there's no -- as the letter clearly states, there's no capital fund that the White House Travel Office maintains.

So they rely upon your news organizations to pay bills in a timely manner. A lot of your news organizations very frequently dispute items that are on these bills. So what they are now doing, what the director of the Travel Office does is go to your bookkeepers and they hand them invoices and they sit down and they work, item-by-item, through the bills.

Now, in some cases we've just got some news organizations have not been particularly helpful or cooperative in paying off those bills. We've got some news organizations that have got tens of thousands of dollars of bills that go back to June of 1993. And we're basically making it quite clear that news organizations have got to pay up on those legitimate bills, or indicate where they have some areas of dispute, or pay the balance that they owe and set aside the amounts where there are disputes because we can't then turn around and pay out within a 45 day period to the other vendors who are owed money the amounts that they are due until we get the reimbursements.

Q Mike, first of all, it has been the experience of many news organizations that the bills have been consistently late, with some coming in more than a year after the fact. Furthermore, that the costs of travel have increased exponentially.

MR. MCCURRY: Well, costs of travel have increased exponentially, and everyone here knows that's been due, you know, in part to the charges that we receive, you know, on the road when we are dealing with hotels. I mean, the cost of travel has increased for every American, by and large.

Now, I want to go back on the question of just payments. Remember, in the categories that these 29 criteria cover -- administrative guidelines; procurement of goods and services; accumulation of allocating the costs for various expenditures; the billing practices themselves, which were the most serious of the weaknesses identified in the 1993 audit; cash management practices, how you maintain the accounts; and financial reporting, making sure that accurate records are kept -- a lot of these areas required, frankly, more urgent work on the part of the current director, the deputy director and the small staff that they've got.

And that's what she has concentrated on and, as a result, happily, you can report that in 26 of 29 categories there's been significant improvement in measuring up to the criteria that have been spelled out.

Q Speaking of directors of the Travel Office, is Cathy Cornelius still working in the administration?

MR. MCCURRY: I don't know. Does anybody know?

Q In the travel office?

MR. MCCURRY: No, she doesn't work in the Travel Office.

Q I'm a little curious. When you raise the statements by attorney Bennett regarding Billy Dale, you weren't asked that question specifically, you offered it. Does the White House feel that it's had some kind of problem with the statements Bennett's made?

MR. MCCURRY: No, I was correcting an erroneous element of a question earlier.

Q Let me follow-up on that question. Does the White House believe it has a problem with the statements that Bennett made regarding Billy Dale and --

MR. MCCURRY: I think I answered that already.

Q Wait a minute. I don't think you did.

MR. MCCURRY: I raised some -- look, I raised a concern. We didn't put Bennett out to say anything bad about Billy Dale, that's the bottom line. And we made it pretty clear after that happened that we didn't appreciate that type of commentary. It doesn't get us anywhere, the President had made clear what he feels about Mr. Dale and what Mr. Dale has gone through. And we think the important thing now is focusing on improving the operations of this office, which is what the current director has done.

Q Well, we've got Ann Lewis out there saying that all the problems have been rectified after the First Lady, to her everlasting credit, raised this. That plainly is not correct, is it?

MR. MCCURRY: Look, she should have said the accurate phrase would have been 29 areas were identified needing special attention and criteria that we meet professional standards, and this office has met now 26 of 29 as audited by the GAO. And in three areas they've got, you know, they are satisfied they've got in place the procedures that they're going to use to improve it.

So I think that she came very close to being right on the money.

Q So you defend that statement as essentially correct?

MR. MCCURRY: She's essentially correct that the significant and serious financial weaknesses that were identified in May of 1993 have been addressed by this office.

Q Are you concerned, Mike, at all that one of the things that has driven this case and kept it alive all along has been statements made from this platform that turned out to be either exaggerated or untrue or the result of FBI involvement that should not have occurred; and that time and again this administration has come out in the case of these firings and made claims about how bad it was over there and what needed to be done and how well it had been corrected, that turned out not to bear up under the facts and have had the effect of keeping this case alive?

MR. MCCURRY: I'm not aware that I have made any such statements during my tenure, nor have any been made during my tenure here. And as to previous statements, I can't speak for people who were here earlier.

Q It's still not clear to me whether the President, as Mr. Bennett's client, communicated to his lawyer that he did not want him to be --

MR. MCCURRY: I'm not aware that he did, but I think it's been generally made clear that, you know, the line of argumentation that was being used was not an appropriate one.

Q Mike, I'm sorry, with respect, been made clear to who? It seems to me that I recall this question being raised in here before, but I don't recall you ever having anything to say about it.

MR. MCCURRY: I don't believe that's true. I think I've talked about this before.

Q Well, the information that Mr. Bennett communicated is privileged information. Is the White House looking into how that came to be divulged or has the Justice Department --

MR. MCCURRY: The information found its way, initially, if I recall correctly, in a U.S. News and World Report account that quoted Mr. Dale's attorney, and it was a letter that Mr. Dale's attorney had written. I don't know the circumstances under which that letter was made public.

Q Are you sure that this thing about the plea bargain didn't go out of here in some way in a talking point? Because the questions have been about Mr. Bennett, but at least four people said publicly, and they even had the same thing slightly garbled -- and somebody told me from the White House counsel's office, it was a background interview, I won't violate that -- used the same thing, brought up the plea bargain. And the context was, we in the press were making a lot about Billy Dale being a victim but, in fact, he had offered to plea bargain.

MR. MCCURRY: I would check -- I'm not aware of any such talking point, but I would imagine that it was around about the time that this item appeared in U.S. News and World Report.

Q It was. But my point is I don't think Bennett was just --

MR. MCCURRY: Which I think was available to anyone who would have been commenting.

Q How does the President feel about Congress going home for a month? And how does he feel about the rising health costs? I know those are two separate issues but --

MR. MCCURRY: The President has made it very clear that Congress should not leave town prior to addressing the very urgent matter of the debt ceiling. That it is very important for this Congress to do the necessary work of extending the federal debt limit so that we can conduct the orderly business of the United States government without anyone anywhere in this world questioning the full-faith and credit-worthiness of the United States government.

For that reason, the President believes that they should stay here in town; can't imagine that they would leave town prior to taking action to extend the debt ceiling; and does not believe, in any event, that Congress would risk putting Social Security checks in some jeopardy by waiting until February 26th to address this matter. That's the day upon which the Social Security checks have to be mailed to beneficiaries. And it certainly would be extraordinary if those checks were to bounce. For that reason, the President has some level of confidence that Congress will move more quickly than that to address the issue of the debt limit.

Q Is he aware of the rising health costs? Is anything being done --

MR. MCCURRY: He is very aware of health care costs in both the private sector and the cost to government-backed, government supported, health care programs. While it is encouraging that the rate of inflation has subsided somewhat in the health care sector, the long-term projections that we use looking out over seven years make very clear that you need to maintain adequate investments in Medicare, Medicaid government-backed health care programs to ensure the health and safety of the American people.

Q The President had a couple of newspaper interviews today. What can you share with us from those interviews?

MR. MCCURRY: He had very good conversations with all those that he talked to.

Q And who were those people?

MR. MCCURRY: He may have made some news, but that will be up to the news organizations to determine. In the case of the New Hampshire interviews that he did earlier he talked a little bit, he recalled -- Mary Ellen sat in, so correct me if I get any of this wrong -- but he recalled with a great deal of fondness his campaign there in 1992, how he really enjoyed the retail aspect of campaigning, how important it had been to him to really be in a position where you could talk face-to-face with individual voters, how he missed that. He hopes that somehow or other in the course of the coming year he is able, as a candidate, to have that same experience. He even suggested that the New Hampshire experience is something that in a time of some cynicism about government we ought to see if we can emulate in a larger scale.

Q Did he talk about Republicans and their rates?

MR. MCCURRY: Republicans. No. He got asked about the flat tax and he reiterated our view that while sounding good, the details certainly make you believe that it's a raw deal for middle income taxpayers. But the Republicans are probably having a pretty good time carving each other up on much along the same line.

Q Did he say anything in the other interview that he made --

MR. MCCURRY: The other interview?

Q He doesn't want to tell you

MR. MCCURRY: He did an interview with the Washington Post in connection with the series that they are currently running on the level of distrust that exists among Americans and between Americans and their government.

Q Does he agree with that, that there is distrust?

Q How about the level of distrust just among news organizations here -- (laughter) -- make similar requests and find that they fall on deaf ears at the White House.

Q Does he think there is distrust?

MR. MCCURRY: I'm sure those news organizations will be encouraged that the President is sitting for such interviews.

Q Does he agree with the thesis, that there is distrust?

MR. MCCURRY: He believes that there is, there has been an increase in suspicion about government. He thinks that it's traceable to a number of factors and that both he has responsibility, all of you in the news media have a responsibility, to see if we can address that; to keep strong the institutions of self government that our democracy depends upon.

Q Would you entertain a parochial question from a news organization that has made vain glorious and vain attempts to --

MR. MCCURRY: I imagine that there is an interview request coming. How much do you want to bet? Does anybody want to take bets?

Q The interview request is long-standing and pending.

Q I think everybody can make this claim.

Q This is a question -- coming back to something about Ann Lewis earlier, do you know why she's going around saying now that Susan Thomases was never the co-chair of the President's primary re-election campaign in New York, and that Victor Covner has been the only such person? Because I distinctly remember on the day this all occurred Mr. Covner telling me that he and Ms. Thomases were together, the co-chairs of a committee in formation.

MR. MCCURRY: I can, but you can check with her. I'm not --I don't -- I usually see --

Q Well, she has now been quoted as saying Ms. Thomases has never had any role.

MR. MCCURRY: I usually see any announcements or personnel announcements that the Clinton/Gore Committee sends out. I've never seen any announcement about the leadership of the Clinton/Gore campaign in New York.

Q And as you understand it, Ms. Thomases has no formal or informal role in the Clinton campaign in New York?

MR. MCCURRY: Yes. My understanding is that it was never her intent to take any formal role in that capacity.

Q I want to go back to the debt limit, a couple questions. Why did you and others in the administration say that the United States was on the brink of default in November when Treasury documents obtained by the Joint Economic Committee clearly show that was not the case and that the administration knew it?

MR. MCCURRY: Well, the judgment that the Treasury Secretary made at that time is, absent the measures that he then had to take, there would have been a default. Now as to the specific documents you are referring to, I'll have to go and check with Treasury and see --

Q You don't think there's any case to be made that he cried "wolf" on that and portrayed the situation as more dire than it was? I mean, he even went on the Brinkley show and said that a Treasury auction for the following day had been cancelled when, in fact, it had not.

MR. MCCURRY: The scheduling of Treasury auctions was directly impacted by the debt crisis, and I recall them having to make several adjustments in their auction schedules and other ways they handled the debt financing instruments that the Treasury issued. What the Secretary of the Treasury indicated that, absent action that he would be required to take and that he believed legal to take, that we would face an impending default. That was true then, it is now true again. And as the Secretary of the Treasury has made clear, he is at the end of his legal authority to deal with that as we reach the month of March.

Q Are you saying that he is at the absolute end of it and that barring the passage of the debt limit extension he cannot pay the bills; is that --

MR. MCCURRY: I am reiterating what the Treasury Secretary said in his letter to Congress of January 22nd, I believe.

Q He said legal or desirable.

MR. MCCURRY: Well, I don't have the letter in front of me, but the letter --

Q There are actions that he could take that he doesn't want to take.

MR. MCCURRY: That's correct. The President said -- you're correct on this point. He said that, "My legal authority to manage accounts extends so far and I've run to the end of that." There are some things, however, that this President will not do. He mentioned two things in particular. One is to sell off Fort Knox, sell off our gold reserves. He said we're not going to do that.

The second thing was we were not going to delay the refunds that taxpayers are legitimately due after they file their income tax returns. Those two things the President has made clear are unacceptable. And the Treasury Secretary knows they are unacceptable to the President and he would not attempt to do those things which might carry you into some period, but in any event the President won't allow him to do.

Q You've accused the Republicans --

Q Didn't you also put Social Security out of bounds?

MR. MCCURRY: Well, we put the Social Security Trust Fund and borrowing against it off limits. I'd have to go back and check. There may be statutory prohibition on that in any event.

Q You've accused the Republicans of creating a debt crisis. But if the Secretary of the Treasury knew that he didn't have to default, then weren't you trying to create a debt crisis, as well, to put pressure on the Republicans to come to your point of view?

MR. MCCURRY: I will go back and look at the Treasury Secretary's statements during that period. But they were very clear in saying, look, here's a situation we face. He provided very accurate, very truthful and very timely information to the Congress about his ability to manage these accounts. He never specified exact dates because part of this is a cash flow issue and you can't predict with absolute certainty all the time when these things will occur, but he has to the best of his ability given Congress the information it needs to make timely decisions on extending the debt limit. That has to be done. It's got to be done, and the sooner they do it the better. And they ought to get on with.

Q One more, you said that --

Q On the economy today, the retail sales went up only three-tenths of a percent. There was a plunge in consumer confidence for January. What would you say to Americans who are worried they are going to see a recession this year?

MR. MCCURRY: I think that the fundamentals of the U.S. economy are strong. We've been able to achieve long-term growth at low inflation, and we believe that will continue. I'll look to see if our Council of Economic Advisers can tell me if there was any seasonal impact on that.

We went through a period just recently, remember, where large parts of our government had been shut down and then large parts of the East Coast were shut down because of the blizzard of '96, and then large parts of the Midwest were shut down because of the very bad weather there. I'll have to check and see what kind of cumulative economic impact that's had or whether any of that is reflected. But in any event, that is not cause for pessimism on the part of Americans, because the fundamentals of our sound economic growth are there and the President is working to make sure that they remain strong.

Q Can you tell us -- I want to go back to the Social Security aspect. Can you tell us why you wouldn't be able to make Social Security payments on the 1st of March, since you've ruled out borrowing against that fund and since that fund takes in more monthly than it pays out?

MR. MCCURRY: Well, I can't. I can only quote back from the letter that the Treasury Secretary said. But those -- my understanding is, the full amount of the benefit payments that are due to be cut on February 26th could not be honored by the United States government if cashed in a timely way based on the current debt limit.

Now, obviously, the Treasury is the best place to go for an answer of why that's true and how those accounts work and how that's all impacted.

Q Does the White House have any reason to doubt the chain of events on Friday night as told by Mark Fabiani?

MR. MCCURRY: No. None whatsoever.

Q If the Congress passes and sends to the President the original Senate version of the welfare reform bill, will he veto it or sign it?

MR. MCCURRY: Well, it's a moot point right now. The President has already had to veto a bill that moved away from the Senate-passed bill. At the time the Senate passed its version of welfare reform, the President, while pointing out shortcomings in the legislation, indicated that if that was the best they could do it would be acceptable, and nothing about that has changed.

But the President believes that these discussions on welfare reform have moved well beyond that now. And he cites in particular the discussions he's had with the Speaker, with the Majority Leader on ways to improve the picture for welfare reform while acknowledging that nothing is, in a sense, agreed to until everything is agreed to on areas like equal treatment of welfare recipients or food stamp funding or child care funding.

There have been positive discussions in the budget deliberations that the President has had with the Republican leadership that move welfare reform well beyond the Senate bill. So the President is not interested in going backwards. He wants to go forward and wants to see a truly bipartisan welfare reform bill adopted that will change welfare as we know it, and he believes it can be done. He's optimistic about it.

Q Mike, back on the Fabiani incident. Is the White House -- has the White House made a decision to let local police handle the entire investigation?

MR. MCCURRY: I don't know that we've made a decision about that one way or another. Mark reported the incident to Alexandria police, and I believe they are investigating it properly.

Q You know, Mike, since what he alleges, though, is a federal crime -- that is, kidnapping -- and across, you know, state lines, whether there's any involvement by federal investigative authorities --

MR. MCCURRY: I would leave that to the spokesman for the local jurisdiction because if they involved outside authorities, it would be -- had been done so at --

Q -- made a complaint to the FBI or to federal authorities?

MR. MCCURRY: Not that I am aware of. The only -- my information is solely that he reported the crime to the local police department in Alexandria.

Q Mike, is there any reaction from the White House to the resolution on two bills introduced today in the Senate by Senator Feinstein linking the drug trafficking with the loan guarantees from Mexico?

MR. MCCURRY: Well, we share the Senator's regard for the -- of law enforcement cooperation with the government of Mexico, but we would also note that this cooperation has been getting better, as recent events have demonstrated. We expect to receive certification recommendations from the Department of State next month as one aspect of the pending legislation. We will evaluate those recommendations in a timely way.

But I'd also point out, on the question of -- you know, we had an important moment that was overlooked just the day before yesterday, and the government of Mexico repaid part of the debt instrument it has drawn upon. They have borrowed $20 billion worth of borrowing authority that was extended to the government of Mexico. They've drawn on about $12.5 billion of that and have now repaid fully $2 billion of that. That's very encouraging, and it's made possible what we begin to see as a glimmer of hope for the Mexican economy.

The important news here is that the policy is working. At some great risk, the President went out on a limb and said, look, we've got to do this in the interests of both our economic self interest and the economic self interest of our partner to the south. And that policy seems to be working and we're very encouraged by the recent economic news from Mexico.

Q This is off base, off the beaten track, but we -- the administration keeps insisting that the Mujaheddin should be out of Bosnia and Admiral Smith says they've faded into the woodwork, that they're not a problem. How do you reconcile the two attitudes?

MR. MCCURRY: Well, there has been widespread compliance with the commitment made in Dayton to see that foreign troops are removed from Bosnia. We are working to achieve full compliance. There are some cases that we are aware of where there have been so-called "freedom fighters" who have been in Bosnia, in some cases have taken local wives or who have given up their uniforms and their weapons and have, in a sense, become part of the local civilian community.

But that, still, is a source of concern for us. We still have raised with the Bosnian government the need to do everything possible to remove any foreign element from Bosnia that might pose a risk either to the international force present there or, ultimately, to the people of Bosnia itself.

Q Do you have any readout on the meeting between Tony and Michael Ancram?

MR. MCCURRY: A short one, and maybe David can amplify on that if he needs to. The National Security Advisor met for almost an hour with Michael Ancram. It's part of a continuing series of discussions that we will be having related to the peace process in Northern Ireland. We have been, as you know, an active participant in those discussions. We've been encouraging the parties to address the issues that they have identified, that they have sometimes referred to outside experts, including Senator Mitchell's international body.

In fact, the large part of the discussion here was a review of Senator Mitchell's report on decommissioning. We had an opportunity to compliment, again, Senator Mitchell's extraordinary work -- it was a masterful piece of work -- and the way that issue was addressed. And, in turn, Michael Ancram had an opportunity to brief Mr. Lake on the United Kingdom's proposal for an elected process related to Northern Ireland. We believe that that proposal should be discussed between the parties but, again, it ought to be in the context of moving towards all party talks that can help resolve the conflicts that exist between the parties.

Q Does the White House think that this British proposal is consistent with the Mitchell report?

MR. MCCURRY: Well, the Mitchell report in one brief aspect addresses at its conclusion the possibility that an elected process might be useful in resolving some differences that, as Senator Mitchell would be the first to point out, that particular issue was outside the remit given to the international body by the United Kingdom and by the Republic of Ireland. So the report itself doesn't address that directly. The work that they task themselves with was much more directly related to decommissioning. And the conclusions that Senator Mitchell and his two colleagues reached on decommissioning are fairly clearly set forth in the report itself.

Q How did Tony Lake react to Ancram's arguments?

MR. MCCURRY: They had a thorough and candid discussion of that proposal and what it will mean for the ongoing dialogue and how we can best advance the peace process.

Q Two domestic ones. On Hazel O'Leary, you've got a congressman again calling for her resignation, Joe Barton. Have you seen any evidence of absolute illegalities, and what's that status as far as the administration is concerned?

MR. MCCURRY: Well, our status remains the same. The Secretary herself has called for a review of those expenses by the Inspector General, and the President believes that's appropriate. And we'll wait for appropriate conclusions to be drawn by the Inspector General.

Q Does she still have the full faith of the President?


Q And, also, on the Whitewater Grand Jury, can you give us an update of who is testifying next and what the status is?

MR. MCCURRY: I can't. I am not -- you might want to check with the legal counsel's office and see if they know.

Q On the farm bill, an issue important to Iowa and other farm states, the House committee is taking it up this afternoon; the full house may take it up as early as tomorrow. Glickman has indicated opposition. Will the President veto the bill that's now called the Freedom of the Farm bill?

MR. MCCURRY: Well, the Secretary of Agriculture previously recommended a veto of the bill of the Agricultural Reconciliation Act, and H.R. 2854, as it's now written, contains essentially the same problems. I think -- I believe, if I'm not mistaken, that in a letter dated today the Secretary of Agriculture has indicated that he would, again, recommend a veto and the President would be very inclined to accept that recommendation.

We -- look, we see the need for legislation that would reauthorize farm programs. We don't want to go back to a 1949 farm act and try to live under that act because that's, you know, doesn't make any sense at all and everyone knows it. But at the same time, we need to see legislation that would, you know, while embracing the concept of increased planning flexibility for farmers and setting funding levels that will create some type of safety net for farmers, will also embrace those three priorities that we've had all along.

And when it comes to the farm program -- preserving the responsible safety net for farmers, promoting exports and maintenance of strong agricultural sales overseas, which has been a large part of the work that we've done on foreign trade missions, which is why our cabinet secretaries sometimes go overseas, to help us make sales overseas.

And, third, there need to be provisions that protect the rural environment. And in all three of those areas we believe this pending legislation falls short, just as the previous farm bill did. But we remain committed to working with responsive leaders on both sides of the aisle, and both Houses, so we can get a good farm bill and not go back to 1949.

Q Mike, the Travel Office, is the White House considering giving the Office working capital to get out of the box -- delayed payments to vendors and delayed billing to news organizations?

MR. MCCURRY: Well, there have been suggestions that they explore that concept. The only useful way of doing that would either be doing a surcharge on current billings, or I think there have been some other proposals on how they might generate such a fund. That would help small vendors who are awaiting payments.

But I want to make it clear, again, nothing would help those very same people as the prompt payment of bills when they are timely submitted. And we've been working to make sure we get the bills out to news organizations in a more timely fashion, but we've got bills, as I indicated earlier, that are now 18 months overdue. And that just is not going to be acceptable, and some news organizations are going to probably not have the opportunity to travel with the President as a result.

Q Mike, why is this White House incapable of saying, look, we screwed up in this whole travel office affair, when all the evidence would seem to indicate that any --

MR. MCCURRY: Gene, in the White House, that could not have been said more clearly in the internal management review of the White House Travel Office. It was conducted and released. It said very clearly that this was not handled well. I don't know how many different ways you can say that. But it's right there in black and white. Okay?

Q Well, there were four individuals reprimanded that were retained on the staff, and the investigation continued of Billy Dale. And to this day, people say that there was financial mismanagement which the --

MR. MCCURRY: We didn't investigate him and we didn't prosecute him and we didn't make the decisions about that. Those were law enforcement matters, and that's all been handled. But what we did, and how we handled it was thoroughly reviewed in the document you are well aware of. I can stand here and read the whole thing to you again, and I'll be happy to if you want me to.

But it couldn't have been clearer that, A, there were serious management weaknesses that had to be addressed and, B, it wasn't handled particularly well by the White House. But that's like ancient history now, Gene. And sometimes life's just got to go on, and that's -- you know, I understand, and everybody understands and the President has commented publicly on Mr. Dale and what he's been through. I don't know how much more you want us to say about this.

Q Speaking of which, there is at least the prospect of a private bill that will be introduced to cover his legal expenses, which apparently wiped out his savings. Would the President look with favor on signing such a measure were it to pass?

MR. MCCURRY: Yes, and he would sign it. All right. Anything else? Goodbye.

THE PRESS: Thank you.

END 2:15 P.M. EST