THE WHITE HOUSE
Office of the Press Secretary
PRESS BRIEFING BY TREASURY SECRETARY ROBERT RUBIN, CHAIRMAN OF THE COUNCIL OF ECONOMIC ADVISORS JOSEPH STIGLITZ AND OFFICE OF MANAGEMENT AND BUDGET DIRECTOR ALICE RIVLIN
The Briefing Room
1:43 P.M. EST
DIRECTOR RIVLIN: Good afternoon. I'm very pleased to present today the first installment of the President's 1997 Budget. With me today are the Chairman of the Council of Economic Advisors Joseph Stiglitz, and the Secretary of the Treasury Bob Rubin and you'll hear from them in just a minute.
Now, this has been a very difficult year in which to make a budget -- in part, because the budget for the last year is not yet finished. Normally, we would be presenting to the Congress and to the country the full details of the President's 1997 budget today; but we have not finished work on 1996. The Congress did not finish its appropriations, some of the bills have been signed, some of them were unacceptable to the President and been vetoed, and some of them have not yet come forward.
Perhaps more important, the President and the Congress have been engaged in active negotiations over a seven-year balanced budget plan. Those negotiations have made major progress. The discussions have revealed that the two sides have common savings, which would be sufficient to balance the budget and to finance a small tax cut, but there are still differences, especially over Medicare and Medicaid and taxes, differences in the numbers and differences in policy.
Now, we had hoped that we would have the seven-year budget deal concluded before launching into the President's Fiscal 1997 budget and that it would fit within that context. But that has not happened, and the statutory date for the President submitting the 1997 budget has arrived. It is, indeed, February 5th and, more important, the Appropriations Committees are gearing up to start into the next round of appropriating.
Therefore, it seemed appropriate to do a two-part budget. We will give the aggregate numbers today, and in the middle of March, the week of March 18th we will deliver the next installment, which will have all of the details about the various departments' budgets sufficient for appropriations.
The important features of this budget are that, first, it does get to balance. It cuts spending in all the major categories of the budget, Medicare and Medicaid and the other mandatory programs and discretionary spending by very significant amounts and reaches balance over the seven years on the Congressional Budget Office's own scoring.
But the cuts are not so deep that they endanger our commitment to low-income children, to seniors, to people with disabilities, and other vulnerable people. They also preserve room for the programs that need to grow for education and training, and science and technology, and for protecting the environment.
The budget funds a modest tax cut for people that need it most, for people who are raising children and those who need to invest in education and who want to save for the future. We have modified our tax cut slightly, and Bob Rubin will discuss that with you in a moment.
This is the first time that an administration has attempted to present a budget on two sets of economic assumptions at the same time -- our own economic assumptions, which Joe Stiglitz will tell you a little bit more about in a minute, and the Congressional Budget Office's assumptions.
We present our budget not only as scored by OMB, but as we estimate it would be scored by the CBO. Now, they have not looked at our budget as a whole; they have seen pieces of it. So when they do the full scoring of the whole budget, they might differ slightly, but we believe that this is a substantially accurate representation of what the CBO would do.
So having two sets of tables makes basically one major point. This budget reaches balance by 2002; indeed, has a small surplus under the congressional indeed, has a small surplus under the Congressional Budget Office assumptions. Under slightly less pessimistic OMB assumptions, we would be very close to balance in 2001 and would have a very significant surplus in 2002. That surplus we estimate now -- and all these estimates are very uncertain -- would be $92 billion if there were no tax cut in the last two years.
That clearly yields a fiscal dividend. If the economy is doing better than the CBO says, there will be money to do other things with. And our budget has a trigger mechanism in it that says if by the year 2000 the economy is doing better than the CBO now estimates, then the tax cut will be extended. If it's doing $20 billion better in the year 2000 than CBO now estimates, the tax cut would be extended. If it is doing even better than that, there would be money added back to discretionary spending. And even without use of the fiscal dividend, we estimate that the budget would be in surplus by about $39 billion in the year 2002.
Now, let me yield to Joe to tell you something about the economic assumptions.
DR. STIGLITZ: Well, this budget document includes the administration's new economic forecast. Overall, we believe that we will continue to see noninflationary growth with low unemployment. Over the past three years, our economic performance has been excellent. After a slow start in 1995, we saw a solid GDP growth with strong investment, robust employment increases and low inflation. We expect this strong economic performance to continue.
Let me come now to describe in more detail the economic assumptions. Our forecast assumes the budget will be brought into balance by the year 2002 using the CBO framework. We project real GDP to grow at 2.2 percent to 2.3 percent, which reflects capacity growth under the chain-weighted measure. These numbers are lower than our midsession review forecast, but this is more than fully accounted for by the shift to chain weights. Our real growth assumption is very close to the blue chip for 1996 and 1997 and to CBO's December estimate for the entire 1996 to 2002 period.
Consistent with our forecast of continued expansion of the economy's potential, we believe that inflation will remain low and stable. We project the CPI will increase by 3.1 percent in 1996, declining to 2.8 percent by 1998. This decline reflects the technical adjustments announced by the Bureau of Labor Statistics.
Given the outlook for moderate inflation, we project the chain-weighted GDP deflator to grow at less than three percent over the forecast period. Combining this with real GDP growth figures, leaves us to project nominal GDP growth to 5.1 percent over the forecast horizon. These are the GDP figures reported in the budget.
We project that the unemployment rate will remain low at about 5.7 percent throughout the entire forecast period. We have recognized that evidence increasingly suggests that the unemployment rate, consistent with stable inflation, has moved down.
The combination of low inflation and the movement to a balanced budget by the year 2002 creates a very favorable environment for interest rates. Short rates are expected to fall, leveling off at four percent. We also see the ten-year rate falling over the next three years and leveling off at five percent in 1998. This term structure reflects the historical experience in periods of low and stable inflation.
In conclusion, let me say, for the past three years the economic projections of this administration have consistently been on target. Comparisons of our earlier projections with the economy's actual performance show only small differences. If anything, we have been too conservative. We have consistently underestimated real GDP growth and increasing jobs and overestimated inflation, interest rates and the budget deficit.
We believe that the economic assumptions presented in this budget are similarly sound and realistic, and they're in line with the forecast blue chip private forecasters and the Congressional Budget Office. Finally, as I said at the beginning, we believe the outlook for the economy is good. The government shutdown and the blizzard that closed most of the eastern United States may have some dampening effect on the economy in the first quarter.
But although we may see some variations in growth quarter to quarter, the economic fundamentals are sound and conducive to steady growth with continuing job creation and low inflation. Let me turn to Secretary Rubin who will talk about the tax portion of the budget.
Q One question before the Secretary starts. Your numbers on inflation are not the same as the numbers that are published in the book.
DIRECTOR RIVLIN: There was a typo.
MR. STIGLITZ: There was a typo --
DIRECTOR RIVLIN: That's why we're distributing the table.
SECRETARY RUBIN: Thank you, Joe. I will briefly describe the President's -- the component of the budget that's consistent -- tax cuts and also savings as a result of loophole closers. Basically, as you know, the President's tax cuts are oriented toward the middle class, designed to help middle class raise their families, to save and to send their children to college. These cuts are good for members of the middle class, and they're good in terms of the incentives they create with respect to people's behavior and the effect of that behavior on economic growth.
Let me say a word about the debt limit before I go on to the tax cuts, because I think last Thursday was really a very significant day in this ongoing process. First, the congressional leadership sent the President a letter committing to pass an increase in the debt limit acceptable to both the President and the Congress before the end of this month; second, Congress took a constructive step by passing legislation which empowers the Treasury Department, authorizes the Treasury Department to issue $29 billion worth of debt outside of the debt limit, which assures the payment of Social Security and other benefits March 1st and shortly thereafter. These steps, as I said, are constructive, and I think Thursday was a very constructive day in this process. This will permit us to get through the March 1st crunch. Now we need to put in place a long-term debt ceiling increase that will take us through at least the next year and get this issue off the table. Having said that, let me turn to the tax cuts.
The President's tax cuts amount to $130 billion. First, we have the middle class tax cut package, which Alice briefly described. It's a $500 child tax credit, $10,000 deduction for education, training expenses, and expansion of the IRAs -- the individual retirement accounts.
Second, this package contains three provisions included in the President's balanced budget offer to help small businesses grow, employees save for retirement and family businesses and family small farms to remain in the family in the event of the death of the owner; family-owned small business and family farm estate tax relief to address the cash flow problems that occur when the owner dies; an additional increase in small business expensing from $17,500 to $25,000 -- which was the amount the President originally proposed in his 1993 budget.
And, third, pension simplification, including a special program for small businesses called NEST. Third, as the President announced in the State of the Union address, there is a program in the budget to incentivize companies to resuscitate abandoned industrial sites in economically distressed areas, both rural and urban, that are known as brownfields. This is a roughly $2-billion incentive and we will work in the week ahead with mayors, the EPA and affected communities to develop the details.
Fourth, the budget would increase the deduction for health insurance expenses of self-employed individuals from the current 30 percent to 50 percent by the year 2000. There is also a package of tax loophole closers and compliance measures. As in the President's original 1996 budget, this budget contains tax reforms to close loopholes that benefit Americans who renounce their citizenship and reforms the taxation of income for foreign trusts. This budget also saves $46 billion by limiting corporate and other loopholes and improving tax compliance. And, finally, there is $5 billion in EITC and related compliance measures and improved targeting.
To conclude, as Alice said, the budget balances in seven years. It contains targeted modest tax cuts to help middle class families, small businesses and family farms struggling to be effective to keep ahead in today's economy, and it contains tax reforms that will make the system fairer and more efficient.
DIRECTOR RIVLIN: Happy to have questions.
Q For Mr. Stiglitz, the growth projections seem very modest. And I was wondering if you could explain what factors do you see encouraging economic growth and what factors are you seeing dampening growth.
DR. STIGLITZ: The forecast is really inconsistent with where most other private forecasters are and with the CBO. The numbers look low mainly because we've switched the accounting framework, the way we calculate the numbers -- this is the new chain-weighted numbers.
Q What does that mean, chain-weighted?
DR. STIGLITZ: Well, the way it used to be -- let me explain how it used to be. It used to be that to calculate the GDP, you use the relative prices of a particular year -- that's a fixed weight -- use 1987. And what happens is that over time those relative weights that you associate with different goods get out of line. And there are periodic revisions -- 1987 -- then we were going to go to 1992 this year. But instead of doing this periodically, which causes lots of disruption, what we're doing now is having what's called chain-weighted. So every -- you continually change the weights as time moves on. And when you do that, you get lower growth numbers. The main reason that the numbers look lower than they did before was because of computers.
Q But can you explain the factors you're seeing going into the economy now?
Q Because of the computers?
DR. STIGLITZ: Yes. The computer prices that were used were the '87 prices, and the computer prices have come down a lot. So when you bought a computer, they used the prices that computer would have bought if you could have bought it in 1987. So these are technical issues, but they do have a big effect on how you estimate GDP.
The factors that contribute to strong economic growth -- we see continuing strong investment and we also see continuing strong export growth. Last year, we had a strong export -- and over the last three years, exports have grown 30 percent, which is really remarkable for a country at our stage of development.
Last year, we had a very strong export growth in spite of the fact that three of our major trading partners had weak economies. We're expecting Japan and Mexico and Canada both to have stronger years and that will feed back to us in stronger export growth.
Q Then where do you see growth? What factors do you see dampening growth?
MR. STIGLITZ: Right now, we're going through a phase of there is a slight inventory overhang, but it's relatively mild, and that may mean the first quarter will be a little bit weaker. Also, the weather and government shutdown have had a slight --
Q -- go through the long-term projections over the next ten years --
MR. STIGLITZ: We really are projecting the economy to continue to grow at its potential capacity over the intermediate run.
Q Joe, your inflation numbers seem perhaps a little bit high. Is that why you're pessimistic, or at least not as optimistic as some about three-month T-Bills?
DR. STIGLITZ: The inflation rate is for the whole year. It's fourth quarter over fourth quarter. The numbers last year had in them the fact that oil prices went down, or actually they went down, so that dampened the overall rate of increase of prices. So what we're working off is what is called the core rate of inflation which is the rate of inflation ignoring the highly volatile areas of food and energy. So it's basically a forecast of stable inflation based on the core.
Q Why do you not think that at least short-term rates would go down even faster? I mean, you're only talking about a tenth of a percent below where we are right now anyway.
DR. STIGLITZ: These are conservative estimates as we said all along, and we wanted to err on the side of conservativism.
Q Did you take into account the recent Fed action when coming up with this number?
DR. STIGLITZ: We don't try to microscopically predict what's going to happen, meeting by meeting, of the Fed. We are trying to give a broad picture of what --
Q -- when was your --
Q You factor it into your calculations as a baseline or whatever?
DR. STIGLITZ: We factored in that there would be a monetary response to the fact that we have a credible deficit reduction package, yes. (Laughter.)
Q Mr. Secretary, what happens after mid-March? Do you go back and plead your case again? Is this going to happen month to month for the rest -- into infinity?
SECRETARY RUBIN: Well, the leadership sent the President a letter on Thursday, as I mentioned, in which they said, they committed to pass a debt ceiling increase by the end of this month as acceptable to both the President and to Congress. I think that should be for a year. It should get this debt ceiling problem out beyond the presidential election, and then we won't have to worry about it, get it off the table and get it out of this political season. That's what should happen, Helen. What will happen, I don't know.
Q But you can't convince them that they should go to the --
SECRETARY RUBIN: Oh, I think they were in a very constructive mode last Thursday, and I think that we should all work together in that respect --
Q Mid-March is constructive?
SECRETARY RUBIN: No, no. Mid-March was a temporary --no, mid-March was constructive because we had a crunch on March 1st as we discussed many times. And they weren't coming back until February 26th. So to avoid that crunchy time, they moved it out to the middle of the month as you say.
Q Mr. Secretary, does this new set of Medicare numbers indicate a worse depletion than you might have thought so far in the Trust Fund? Are you for a more extensive set of reforms in that program than you've been willing to accept?
SECRETARY RUBIN: I think they argue --
Q If not, why not?
SECRETARY RUBIN: Yes, I think they actually argue just the other way. I'm chairman of the Part A Trust Fund, as you may know, and I think what they argue for is putting in effect the proposal the President has put forward, which are Medicare savings that, roughly speaking, parallel a group of Medicare savings the congressional majority has suggested. I think we should get them done, and get them done now so that we can advance the exhaustion date out to the 2011 that the President's program was projected to accomplish.
Q What, if any, impact do these new numbers have on your thinking, if any?
SECRETARY RUBIN: I really think the impact is exactly what I just said. What it means is it is imperative that we get --
Q That you would do what you were going to do, anyway.
SECRETARY RUBIN: It is imperative that we get done the program that the President put forward so we can take the exhaustion date -- which was 2002 or 2001, I've forgotten which -- and get it out to 2010, 2011, which is what the present program was designed to do.
Q How long has the administration known that Medicare Trust Fund was going to suffer a deficit and not a surplus this year?
SECRETARY RUBIN: I just heard about this -- Alice, do you know the answer? This was not something I had known about before.
DIRECTOR RIVLIN: Today is what I heard.
SECRETARY RUBIN: Yes. My first knowledge of it was today.
Q You first found about it in The New York Times; is that what I'm led to believe here?
SECRETARY RUBIN: It's actually a very good paper; you should read it. (Laughter.) I mean, there are a lot of other good papers, too, I didn't mean to -- it was not a relative comment.
Q If I could ask, then, why is it that the administration did not know this, especially since there were sensitive budget negotiations going on for a couple of months?
SECRETARY RUBIN: There may well have been people who, in analyzing this, were familiar with it. I learned about it today. But I don't think it matters. I think the essential point is precisely the same. It simply makes more imperative what the President said all along: We should put in place these Medicare cuts. And since these cuts, roughly speaking, parallel cuts that the Republican majority could agree with us on, we should get this thing done and get it done now.
Q Just to follow-up on that, though. It sounds, though, as if what needs to be done is a lot more stringent than you're advocating. And the Republicans have been saying all along that you haven't pushed hard enough and you haven't cut deeply enough. And it sounds like even they haven't done enough.
SECRETARY RUBIN: No. Well, there are two problems, as you know. One is the problem right now of getting the exhaustion date extended from 2002 to 2011; the President has projected his program would take -- maybe now it takes to 2010. I don't know -- I was told -- it probably still goes to 2011. That you can accomplish by putting in place the President's program and doing it now.
The question of what kinds of structure reforms you want for the long-term in order to address a much longer-term Medicare problem is something neither the congressional majority nor our program addresses. But what both our programs address is providing plenty of time for that to be done on a bipartisan basis. So I think it comes back to my answer to Brit -- what this says is get this done and get it done now.
Q But you've underestimated how much money there is. Why do you think that your estimates will hold up over what your cuts will provide?
SECRETARY RUBIN: Let me take a one-second answer and let me let Alice -- we've been advised by Bruce Vladeck at HCFA, and I believe he is actually going to do some kind of a press discussion today, that he still projects that this will -- that the President's program will provide an extension of the exhaustion date of the Medicare Trust Fund out to 2011, or maybe it's 2010 now, I'm not sure, which gives us -- a, it extends it out further than the average extension has been during any period of time the Trust Fund has been in existence; and secondly, it extends it out a multiple of the number of years you need to put in place the true long-term fixes, which neither of our program provides.
DIRECTOR RIVLIN: Well, let me just reemphasize, the President is proposing a set of cuts which reduce the rate of growth of Medicare and protect the Medicare Trust Fund. They are virtually the same cuts that the Republicans are proposing. And it is -- they are proposing more than we are, but the point is that we have agreement not just on the minimum number but really on the policies.
When you look at what you need to do to slow down the rate of growth of Medicare, especially hospitals, which is what we're talking about in the Trust Fund, the policies are not very numerous that are available. They are changing the reimbursement rates, the so-called updates for the various provider categories, especially the hospital update. We are all agreed that has to be done.
Now, why don't we just do it and that would solve this problem for a good long time.
Q Mr. Secretary could you explain the phase-in, as you call it, of the middle class tax cut, both the $500 credit and the $10,000 in terms of when middle class families could actually see some of these benefits? What time would the full $500 kick in and the full $10,000?
SECRETARY RUBIN: The effective date on the tax cuts would be January 1, '96. My recollection is the child tax credit starts at $300, and I believe in the fourth year goes to $500, and the education starts at $5,000 and goes $10,000 also in the fourth year.
Q Which means you might not get to full numbers if, by 2000 you cut off the --
SECRETARY RUBIN: They trigger off in the last two years, as you know, so you get to the full numbers.
Q But if you started in '96 and the fourth year -- by '99, then, you would have both of them in full swing?
SECRETARY RUBIN: It would be '96, '97, '98, and '99. Right. You've got it.
Q There seems to be a -- on the numbers on the tax cut -- you said it was $130 billion package.
SECRETARY RUBIN: Right. Correct.
Q OMB says it's a $99-billion package on their handout.
SECRETARY RUBIN: Well, that's the trigger, and there is a reconciliation on one of these pages, but I don't remember where it is.
Q Okay, the second question, same point, you said I think $46 billion for corporate loophole closing, and they say $59 billion?
SECRETARY RUBIN: Yes, there are three pieces to that. There's $46 billion, which is the corporate loopholes and similar matters, there is about $7 billion of additional very similar kinds of loophole closures that were in the original budget, and then there's $5 billion that relates to EITC and some very closely related savings there that come fundamentally from making the system work better. So that would be a total of $58 billion, and it rounds off to $59 billion somehow or other.
Q Mr. Secretary, Mr. Archer last week suggested the idea of raising the debt ceiling through October, the fiscal year. Is that adequate to respond to your concerns up through the end of the year?
SECRETARY RUBIN: I think that Mr. Archer really played a very constructive role last week. I think that the debt -- in proposing legislation that passed, I do think the debt ceiling should be taken out beyond this calendar year, because that gets you beyond the presidential election, it gets beyond this political period and gets into next year. But that's something we'll all have to work on as we go forward.
But I think the most important thing is I think Chairman Archer did play a very constructive role at the end of last week.
Q But does the idea of through the end of the fiscal year cover you, in effect?
SECRETARY RUBIN: No, because the end of the fiscal year takes you to October 1st, and the presidential election is still in November. So you've got the one butting up against the other.
I think we should try to get it out beyond this calendar year into next year and get it beyond this political season.
Q I'm talking more about the extraordinary measures that you've been taking to keep the government in the money?
SECRETARY RUBIN: Well, that's a different issue. What we have said with respect to the extraordinary measures is that -- and you all probably have the letter that we sent to Speaker Gingrich, the Majority Leader and House Majority Leader -- that the measures that we have available to us would have taken us through either February -- both available to us legally and which we deem to be prudent would have taken us through either February 29th or March 1st. We weren't quite sure which because these numbers are difficult to project with accuracy.
That problem, fortunately, has been mooted by the legislation that was passed last week and in some ways, even more importantly, by the letter that the leadership presented to the President on Thursday.
Q Dr. Rivlin, if you're trying to balance the budget in seven years, why do you increase discretionary spending in 1997? Wouldn't it make more sense to keep it all along on a freeze rather than -- I mean, some people might say you're increasing the spending just because it's an election year.
DIRECTOR RIVLIN: Some people might. But that's not the reason. The reason is that we want to protect the programs that we really think are necessary to grow the economy and to protect the environment. And while we are downsizing the government generally and are continuing to do that, you can't do it too fast. We need to get systems in place that will make it possible to run the ordinary functions of government more efficiently and with less money.
Q The governors think that they may be on the verge of a breakthrough in three areas on the budget -- Medicaid, welfare and the third category of employment and training. From what you know of the work they've done, how likely do you think it is that something that would really make a difference is going to emerge here?
DIRECTOR RIVLIN: I think they've made a lot of progress and I was with the President this morning when we I was with the President this morning when we listened to their report of the progress that they had made. But they have not presented a plan yet, and we can't tell exactly what the details are or how we would react to it.
Q But if they do in fact agree on these state-administered programs in a bipartisan way, which they would have to with a 75 percent requirement, wouldn't that carry an awful lot of weight with the White House?
DIRECTOR RIVLIN: That would be very helpful. But the President and the Congress still have to work this out. They have made a lot of progress, too. I think we are narrowing the differences. But it is very important to the administration to make sure that we are not undercutting the populations for whom these programs are designed, who are the most vulnerable people in the country; and that we also give the governors a great deal of flexibility, but don't just give them a blank check.
So we have to look at all the details. And the details in these two programs, Medicaid and AFDC, are exceedingly complicated. We want to simplify them, but at the moment they are complex.
Q Dr. Rivlin, Al Kamen reports in The Washington Post this morning that you're seriously being considered for the Federal Reserve. (Laughter.)
DIRECTOR RIVLIN: That's Al Kamen's opinion. I have a big job here, especially in the next few months. I can't imagine leaving the budget in the middle of this historic negotiation and chance to get a balanced budget for the first time in a long time.
Q How about sometime after that?
Q Sounded like a yes.
Q Sounded like a yes to us.
Q Secretary Rubin, would you comment on the relationship --
DIRECTOR RIVLIN: Oh, no, that was not intended -- (laughter.) This was intended to say no story here at all; no way, no how.
Q You mean, you're not frustrated and unhappy with all of you colleagues?
DIRECTOR RIVLIN: Not at all.
Q Secretary Rubin, could you comment on the relationship between this budget and the suspended, perhaps, sometime resumed budget negotiations? This is the last proposal that we understand the President made during those talks. Does the fact that you're making it in a binder now and as the first installment of the budget mean this is where the White House stands and it won't move?
SECRETARY RUBIN: Well, this is the President's budget proposal. It is, as you know, the proposal that developed and that he had discussed at length with the Republicans. The President has had a consistent position through this whole thing, which is that we should work together, we should keep our doors open, stay in touch with each other on an ongoing basis and continue to work toward getting a balanced budget. And then, as you know, he has discussed many times -- including the State of the Union -- the commonalities that exist between the two proposals and the ability to get a balanced budget simply by taking the amounts that are in common. And as Alice said, the vast -- of those amounts have common policy underlying them.
So I think what he has presented is a basis for reaching a balanced budget and, in addition, a modest tax cut.
Q So these could change if those negotiations were resumed?
SECRETARY RUBIN: Well, I think -- forget what I think. The President very much thinks it would be constructive to continue negotiations and continue the discussions. But we have here a budget that does go to balance and that does reflect the commonalities between the congressional majority and the administration's proposal.
I just want to add one thing on debt limit, because I did -- when I said before, in response to your question, that in a sense the things that we could do were moot that, of course, was premised on the assumption that the Congress would, in fact, put in place the debt ceiling increase. But the reason I feel that it was such a constructive week last week is because of the letter that the congressional leadership delivered to the President.
Q One last thing, Mr. Secretary: if you get to October based on what Congress does, will you then be in a position to renew your use of the extraordinary measures you use this year to get you past the election?
SECRETARY RUBIN: That's a very difficult question to answer at this point because it depends on a number of technical factors that I suspect will be a part of our discussion --
Q -- what, five weeks?
SECRETARY RUBIN: No, but the -- no, no. Where we are right now --
Q Are you going -- you will be able to reimburse based on these --
SECRETARY RUBIN: Well, that's the question. You see, if you've reimbursed the Civil Service trust -- if you've reimbursed the Civil Service Retirement Fund and G-Fund, then, of course --
Q You could do it again.
SECRETARY RUBIN: -- those become available as instruments that could be used to avoid a problem. If they haven't been, then they can't be --
Q So that's the thing to watch?
SECRETARY RUBIN: It would certainly --
Q You do that, you'll be able to do it; if you don't, then you may not be able to.
SECRETARY RUBIN: It is certainly one thing to watch.
Q Mr. Secretary -- one international question, Mr. Secretary. There's a published report today that France and Germany may support full G-7 membership for Russia. Do you want to comment on the report and the U.S. position?
SECRETARY RUBIN: Yes, I saw that, too, actually. I think the best answer is simply to say there certainly has been no decision on that.
Q What's our feeling about it.
Q Did President Chirac discuss it with President Clinton?
SECRETARY RUBIN: Let me stick with what I just said. There certainly has been no decision on that.
THE PRESS: Thank you.
END 2:19 P.M. EST