THE WHITE HOUSE

Office of the Press Secretary

                            PRESS BRIEFING
                            BY MIKE MCCURRY

The Briefing Room

1:24 P.M. EST

MR. MCCURRY: Well, welcome to the White House briefing room in this new year, for our first briefing of the new year. Anticipating news, of which I have none, we shall go to your questions -- unless you want to know about the President's call to Chancellor Kohl.

Q Sure. Yes.

MR. MCCURRY: Those of you who have followed Chancellor Kohl's travels know that he met very recently with President Yeltsin, so President Clinton took that opportunity to have a half-hour conversation with Chancellor Kohl today, a very wide ranging conversation that obviously focused on relations between the Russian Federation and the West, but touched on other subjects as well.

Quite a bit of the conversation dealt with the issue of NATO expansion. I think some of you have seen Chancellor Kohl's public comments on that subject. Certainly the President and the Chancellor share the view that the timetable for NATO expansion that has been outlined by NATO's foreign ministers should proceed. They exchanged views on how that will happen in the context of the very important discussions going on between NATO and the Russian Federation related to the NATO-Russia charter. It was most recently discussed at both the Defense Ministers meeting and the Foreign Ministers meeting. And they agreed that they would continue to remain in close contact as we work through that issue in the course of the coming year.

Q Mike, in that context, did they discuss the kind of harder tone coming out of Russia, even from Mr. Yeltsin himself?

MR. MCCURRY: They discussed in general the approach the Federation has taken to this question. There is certainly a great degree of concern, and some would say a certain degree of ambivalence, on that subject and the West is well aware of that. That's the importance of the parallel discussions that NATO has established with the Russian Federation on issues related to expansion and also the importance of the discussions related to a charter, formal charter between NATO and the Russian Federation that Foreign Minister Primakov endorsed at the NATO Foreign Ministers meeting.

Q -- discussion of Yeltsin's health?

MR. MCCURRY: Not to my knowledge. I didn't see anything reflected on that. I can double-check that, but I didn't see anything indicated on that.

Q Russian officials today are suggesting that he might not be able to do the early-this-year summit.

MR. MCCURRY: We remain in contact with the Russian Federation. As you know, we have not made any announcements related to timing or venue for that, but we do expect to proceed with the previously announced schedule for a summit meeting between President Clinton and President Yeltsin.

Q In the spring?

MR. MCCURRY: In the springtime. In fact, have we specified March?

MR. JOHNSON: We've suggested that it's likely to take place in March, but we've been very careful not to say a specific place because that hasn't been agreed.

MR. MCCURRY: We have suggested March, but we have not suggested place or exact date.

Q Can you tell us about this food deal with North Korea? Is this tit for tat in terms of North Korea's apology to South Korea for the submarine incident? Now the U.S. is letting this major food sale go through? Is that part of the same package?

MR. MCCURRY: Not a specific, direct connection there, although there is now a climate on the Peninsula that we hope is conducive to discussions about peaceful resolution of differences that exist between North and South. We were encouraged, obviously, by the agreement to proceed with multi-party dialogue on the future of the Peninsula, but it has long been our policy that the Treasury Department, through the Office of Foreign Assets Control may, from time to time, issue licenses for specific transactions that are deemed in the interest of the people of the United States and, in this case, obviously the people of North Korea, given the grain, which is the item that would be shipped.

Q Mike, this is not part of Food Aid, right?

MR. MCCURRY: No, this is a separate transaction. There have been some international provisions of humanitarian relief, but this would be a transaction purchase.

Q Is this one of the first big ones? I don't know really the history of that.

MR. MCCURRY: My recollection is that we have had those before. They were foreseen in the agreed framework document issued in 1994, that there would be, from time to time, those types of commercial transactions. But I'd have to check and see whether there's been one of this size. David can maybe help you on that.

Q Mike, this morning when we were asking about the budget, you said there were a few significant items that still remained under discussion. Can you tell us what those significant items are, and also can you give us -- tell us again about the date that you expect the budget to be out, because some people said the 7th and I heard from others that it's the 10th --

MR. MCCURRY: I think there are a couple of different suggestions. The notion was, since the President will be unveiling a formal program to the Congress in the State of the Union Address of which the budget is certainly a piece, not the only piece but an important piece, some discussion about the utility of having him deliver his State of the Union message prior to the formal sending of the budget to Congress. We do expect, at least based on the tentative conversations we've had with the Hill, that we would send the budget after the State of the Union, but so far there haven't been any final dates locked in. Apparently, there is some discussion of maybe moving it towards the week of the 10th so you could follow the standard format that we usually use for unveiling a budget, which is traditionally done on a Monday.

Correct, Barry? Traditionally done on a Monday.

Q Is the 3rd not a matter of law?

MR. MCCURRY: There is a statutory requirement, but there have been some discussions with the Hill about whether or not, given the calendar that exists this year, whether or not it would be possible to move that date to reflect the --

Q It would be for purposes of --

MR. MCCURRY: For the purpose of the President giving a State of the Union Address prior to the submission of the budget.

Since the budget is a document that amplifies things that the President would intend to talk about at the State of the Union, it made some sense to the White House to see if Congress would entertain the notion of having a formal submission of the budget after the State of the Union Address; although, knowing how hard everyone in this room will work, the notion that it would me major news by the time the budget was formally submitted is probably hard to imagine.

Q Is Bob Novak correct in attributing to the President support -- voice to Bill Archer for a national sales tax on abolishing the IRS?

MR. MCCURRY: He was very correct in saying that they had a good, productive conversation that the President elected to keep private.

Q Mike, what is the President's position on national sales tax?

MR. MCCURRY: He's never formally submitted a proposal for such. He has been concerned, as are many experts, with some of the regressive implications of a consumption-based tax. How you integrate income-based taxation and consumption taxation is a major question that most industrial economies have faced in a variety of different ways.

Our European friends in the G-7, of course, have a different mixture in their income taxation, but I'm not aware that in the deliberations going on now for the submission of the budget that there will be any major tax reform initiative. The President has, though, always indicated that the Treasury Department and the White House remain open to ideas about tax reform. And, of course, the President could conceivably have indicated a receptivity or an openness to dialogue in meeting an important Republican chairman from the Hill.

Q Does he want to get rid of the IRS?

MR. MCCURRY: Those are ideas -- I think there have been some ideas in the public domain here that have been more associated with Chairman Archer than with President Clinton, but --

Q What does the President think about it?

MR. MCCURRY: The President thinks he had a good conversation with Chairman Archer and looks forward to having a good, productive working relationship with the Chairman.

Q Any reaction to the advisory committee on Social Security, anything to add to Secretary Shalala's remarks?

MR. MCCURRY: I don't have anything that I would really add to what -- there's a good joint statement that you've seen from the Social Security Commissioner Shirley Chater and Secretary Shalala. They thanked the advisory committee for its very important work. They have identified the fundamental principles that this administration would use in addressing the question of solvency for Social Security. There's no one who would fail to recognize that we face a long-term solvency issue with respect to both Social Security and Medicare and it needs to be addressed.

We certainly in our deliberations are looking at the most urgent question, which is the solvency of the Medicare Trust Fund; but there are ideas in this report that will continue to be part of the public discussion that occurs. The President believes there will have to be a bipartisan process to address these long-term questions and he's committed to pursuing that as he engages in further consultations with Congress.

Q Were you disappointed that there wasn't -- that they couldn't achieve consensus on these recommendations? It seems to suggest it would make it harder to come up with a consensus if this commission with two years to focus solely on this failed to do so. Are you disappointed?

MR. MCCURRY: I think all of those who have followed the deliberations about the future of Social Security are disappointed that there's no easily found consensus. But it is not likely to be that type of issue in any event. It is an issue fraught with a great deal of political dynamic. It's also one that has enormous complexity just from the point of view of policy. But this administration believes several things: Social Security will have to remain a bedrock element of retirement income security for the American people; we're committed to making sure it remains solvent not only for the current elderly population receiving benefits, but for the workers of today and for the children of today who will eventually be part of the system well into the next century.

We're committed to maintaining the solvency of Social Security and looking for those bipartisan solutions that will address the issues of solvency that the advisory committee did not resolve.

Q How is he going to push that forward? Is he going to propose another commission to look at this? I mean, how is he going to --

MR. MCCURRY: We have not committed to any specific idea of how you would go about addressing those questions. We've suggested only that there must be a thoroughly bipartisan process, one that involves the President, the Congress, those who represent the beneficiary community, and certainly those who represent the workers of the day who ultimately pay into the system itself.

Q Just to follow up on that, I mean, the President talked about forming a bipartisan commission for another entitlement problem, which is Medicare. Is he going to propose that as part of his budget, is he going to have a stand-alone piece of legislation? How is he going to push that forward?

MR. MCCURRY: As a general proposition for the next several weeks, I'm not going to detail specific decisions the President might be making or may have already made, going into the budget. There will be ample opportunity for the President to present the budget, to talk about the reasoning behind it, to talk about some of the process elements that will lead to resolution of those kinds of issues, but I'm not going to make that news in advance of the President making it himself.

Q What does the President think of investing some of the Social Security money in the stock market?

MR. MCCURRY: He believes that there are a number of ideas that have surfaced as part of this debate, and certainly in the report of the advisory council itself, that merit further discussion. He is not wedded to any of the suggestions made by any of the separate groups of members of the council itself, but agrees that many of these ideas will have to be discussed further and will have to be an element of the bipartisan process that would lead to resolution of questions about the future of Social Security itself.

Q How is the administration going to handle the case of this Georgian diplomat who was in the accident in which the young woman was killed?

MR. MCCURRY: First and foremost by working very closely with the government of Georgia. President Shevardnadze has publicly indicated, and we have certainly had it reiterated in conversations with the Embassy of Georgia, that they want to look for a resolution of the matter that is satisfactory. The State Department has been heavily involved in discussions to that end, and I believe if I'm not mistaken that at this moment over at the State Department they're briefing in greater detail about some of the conversations they've already had.

Q What would the administration consider to be a satisfactory conclusion?

MR. MCCURRY: Well, that justice be done and that proper diplomacy be applied in resolving any concerns of the two governments, the host government and the government of Georgia.

Q Mike, when you say that justice be done, does that mean that the person responsible for the death be brought to trial, and that diplomatic immunity be waived?

MR. MCCURRY: It has been very rare when a minor crime is committed in the United States that diplomatic immunity has stood in the way of bringing those responsible to justice. The President and our government believes that's proper and we have good consultations underway with the government of Georgia to ensure that that central premise is adhered to.

Q If I could try one last time. I mean, I think you're reading correctly between the lines, but can you say explicitly we would like them to waive diplomatic immunity?

MR. MCCURRY: I would not want to endanger some of the good conversations that are already underway on that and at the State Department they're briefing in greater detail.

Q But in theory doesn't that open up U.S. diplomats to charges that they could retaliate and open them up to criminal prosecution?

MR. MCCURRY: Within diplomacy, actions set precedence and that's why governments amicably resolve matters like this to ensure that questions like retaliation don't present themselves.

Q If President Shevardnadze is involved, did President Clinton get personally involved in this?

MR. MCCURRY: He's been just briefed on some of the details of it and been told that the State Department has got an active dialogue underway on the issue.

Q Would the recall of the diplomat involved be something sufficient, in the eyes of the administration?

MR. MCCURRY: I'm not going to speculate on, you know, what the proper course of action is. I'll tell you that there are good conversations underway that will lead to an outcome that the United States government hopes will be a satisfactory outcome.

Q Why did the President order the staff to be silent on the Newt Gingrich problems?

MR. MCCURRY: Because the President believes this is a matter that the House has to address. It's a serious matter and one that the House will need to address seriously, but the White House can't usefully contribute to the deliberations that members of the House must undertake.

Q Mike, is there a concern that given the partisan rhetoric that's going back and forth on the Hill on this issue, that it will be difficult for the President to strike his spirit of bipartisan unity before the inauguration?

MR. MCCURRY: Well, the President, as he suggested today, well knows that there can often be a climate in Washington that is characterized by partisan rancor, as opposed to bipartisan cooperation. That's why his appeal today was for working together to address the problems that the American people face and for members of the Congress and the President, who has been elected by the American people, to get about the business of doing the work that they've been sent by the American people here to do. And he's trying to create a climate in which that work might more easily be done.

Q But doesn't the climate on the Hill make that more difficult to strike?

MR. MCCURRY: There are many things that can contribute to sulphur in the climate.

Q Mike, the President has told his own staff not to comment. Does he have any communication with House Democrats on their handling of --

MR. MCCURRY: Not to my knowledge. Most of the conversations that I'm aware of have been only about what likely issues of timing are going to be, or what the schedule is going to be, just so we know, in terms of our own planning about things that we want to work together with Congress on, how that might be affected by timing.

Q So legislative affairs is not in any way actively involved?

MR. MCCURRY: Not to my knowledge.

Q Mike, in his prayer breakfast he talked about churches hiring welfare families and then going on and having companies who are in churches hire families. Is that something he's laying out as some sort of a proposal, or is that just an idea he's throwing out?

MR. MCCURRY: That's an idea that actually was generated from his visit to the Salem Baptist Church last year, in a conversation with a number of the members of the clergy there. They all talked about how the church community itself can play a role in helping welfare-dependent mothers make the transition to work environments.

And if you remember, the President has been really using the bully pulpit to encourage the private sector to respond to the historic opportunity that exists now because of passage of the welfare reform legislation to create the jobs necessary to move people from welfare into work. I suspect that by the end of the week you'll see the President doing much the same with major CEOs of private enterprises here in the United States, encouraging them to, within the private sector, respond to the opportunity that welfare reform now presents America by helping to create the solutions to the problems of dependency and the underclass that have existed for too long, so that every one, in a sense, has roles to play in making welfare reform a success: the church community and those who are advocates on behalf of the children of America, the private sector, and, certainly, those elected officials with responsibilities like the President. Everybody has to be a part of the solution.

And you saw, today, the President encouraging this one community to take on those responsibilities. You'll see him doing that with other communities as we seize on this issue as one of the fundamental challenges the President faces in his second term.

Q Did any of the churches give him any commitment?

MR. MCCURRY: Well, a number of them did. I'd stress that the idea, in a sense, generated from them. There are a number of churches already doing exactly that: providing employment opportunities for those who have been welfare-dependent, frequently members within the congregation or the community.

Q The leaders here, did any of the leaders say they would?

MR. MCCURRY: I would have to check. I haven't talked to the President since then, but that idea, as it has been expressed by the President in the past, has received favorable response from those that he has met with, both within the private sector and in the clerical and lay religious communities.

Q Mike, is the administration doing anything, setting up any kind of mechanism that would measure whether or not the private sector and the churches are stepping up to the plate and at the scale that's necessary in order to know whether -- the President keeps saying, it'll only work if you step in. Is there any kind of measurement going on?

MR. MCCURRY: Well, there are specific measures taken of employment opportunities and, of course, we'll get data on state-by-state welfare caseloads and what's happening to the welfare-dependent population as they go through the next several years of change in the welfare system. We've got some data already generated as a result of the welfare waivers that have been grated at this stage. So we're monitoring that very carefully. I'm not aware that we've got any kind of specific measuring device, other than the ongoing data collection series that the government maintains related to employment, income and poverty.

Q Mike, would you foresee the White House hiring welfare recipients to sort of set an example for the rest of the country?

MR. MCCURRY: That's not a bad idea. But I haven't heard that discussed, but I will inquire further.

Q Any special guests at the Inauguration? For example, maybe you've answered this already. You know, opposition leaders -- Belgrade, any dissidents? People that you want to showcase?

MR. MCCURRY: I know the Inaugural Committee had a press conference last week and may have answered some of that; we'll have to check with them. But it would be within the province of the Presidential Inaugural Committee to address that.

Q Specifically, though, from say, emerging democracies or people who are engaging the struggle for democracy that the President would want to offer some moral support to -- I guess that's more what I'm interested in.

MR. MCCURRY: That was done four years ago and I imagine may be, but I'd just have to check further. Not that I right now am aware of, but I would not be surprised if there was such an effort. Maybe we can -- Barry can check a little further with --

Q Mike, quite aside from what specific kind of a commission the President might recommend on Medicare, you and the President and others have made it clear that this administration wants a bipartisan solution to the long-term Medicare problem and to the long-term Social Security problem, but the time lines, in terms of solvency, are quite different, and I'm wondering, do you see that these two problems can be conjoined in a single commission or bipartisan task force, or is it more likely that you're going to split the two and give first precedence, first priority to Medicare because the day of reckoning is sooner?

MR. MCCURRY: First and foremost, there will have to be further consultations between the White House and Congress on how to address those questions. But let me separate the two issues somewhat differently. There is a short term and a long term in dealing with entitlement issues. The short term and the one that is most urgent is the one we face in Medicare, the solvency of the fund itself and what we can do to extend the solvency of the Medicare Trust Fund well into the next decade, at least halfway through the next decade. That's been a goal of the President's budget planning, it's been one of the stated objectives of the bipartisan discussions we've had with the congressional leadership on budget-related issues, and it will be a feature in the President's budget to be sure, extending the short-term solvency of the fund so that we, in a sense, buy ourselves time to deal with the longer-term issues related both to Medicare and Social Security.

Now, whether or not you join the long-term issues is a separate issue and a complicated one, because the structure of financing for Medicare or the premium structure is much different from the way you pay into OSDI for Social Security. So it's not automatically a process that could marry both issues. Now, there are some central philosophical questions that then arise with respect both to Medicare and Social Security that fall under the general heading "entitlement reform," and those are the kinds of discussions and debates that you could foresee being part of the long-term deliberation. But again I'd stress that's the bipartisan process that the President will have to have further consultations with the congressional leadership on before we arrive at a process that everyone is satisfied has got the best prospect of working.

Q When you talk about the need for some form of bipartisan process, are you ruling out it coming in the form of legislation first, particularly when you have someone like Senator Daschle yesterday saying Social Security privatization is a non-starter?

MR. MCCURRY: Well, I think just as a practical matter, what comes first is the submission of an FY98 budget proposal. That's going to address certain aspects of Medicare financing; it will have to. And then there are larger issues that are longer-term issues that I suspect will be coming later. I think with respect both to Medicare and Social Security, the longer-term issues will have to come later in this calendar year, probably after we commence the formal deliberations on a budget.

But they are connected because how you resolve some of the budget-related issues, if you want to balance the budget by a date certain, 2002, relate to your ability to address the longer-term problems, obviously.

Q On the budget, could you just tell us a bit about where the process stands? The President, right, went on vacation without -- deciding a lot of the appeals?

MR. MCCURRY: Well, no, he met -- my understanding is that he met with all of those Cabinet officials that had formal appeals to submit on behalf of their agencies. He resolved most of them. There are some remaining issues, but not those that prevent the budget staff at OMB for completing the work on formal submission of a budget.

There are some, as always, fine-tuning of issues that will have to go into the final draft of the budget to get submitted in February. But by and large, the large-ticket questions have been punched.

Q Do you have a date yet for submission, and do you have a date for the State of the Union?

MR. MCCURRY: No, we don't. We're waiting for Congress to announce whether or not February 5th is the date for the State of the Union. They will make the formal announcement at some proper point, and then I've suggested that we would prefer to submit the budget formally after the President delivers the State of the Union and, as I said earlier at the beginning of the briefing -- perhaps we'd try to do the traditional sequence of a Monday release, which would make February 10th look like a date that you might focus on, but that all has to be worked through in further discussions with Congress.

Remember, Congress is just returning now, members are being sworn in, they're getting their clocks running on the Hill for things that they're going to be doing. We're in close contact with them, but it'll be easier to resolve some of these questions now that Congress formally comes back.

Q Do I understand you say you won't delay it unless you get their green light, from the leadership?

MR. MCCURRY: Yes, we would have to work cooperatively with them to fit that timetable. The OMB will be prepared to meet whatever the law requires and the law does require submission by February 3rd, but there could be some -- we would hope there could be some flexibility in doing that to accommodate the President's desire to deliver a State of the Union Address first, which sort of frames some of the larger issues that the budget presents as a subset.

Q There was a report from the Middle East saying that the President could convene a summit next month with Chairman Arafat plus the leaders of Israel, Jordan, and Egypt. Is there any truth in that?

MR. MCCURRY: There are often highly speculative reports that come from the region when there's intense diplomacy underway. The most I can tell you is that there is very intense diplomacy underway. Ambassador Dennis Ross, our special Middle East coordinator, has met with both Chairman Arafat and with Prime Minister Netanyahu today. There will be further deliberations as we work with the parties to attempt to bridge the final differences that remain before they reach agreement on the question of a withdrawal from Hebron.

Q But you're not going to announce such a proposal, are you?

MR. MCCURRY: We are, right now, engaged in intensive diplomacy that focusses on Ambassador Ross' work in the region with the parties which is, certainly, a day-by-day proposition, if not an hour-by-hour proposition.

Q The President referred in his speech today to a college friend who talked to him about what a President should do. Do you know who that was?

MR. MCCURRY: The former classmate? I saw that in his remarks and I haven't had a chance to ask him that, but if we can get that I'll post it.

Q -- plans to announce this lower student loan default rate later this week. There's some argument being made that the best way for the President to open up the door to college education isn't through tax credits but by targeting loans -- for those most in need. Is there any response to that argument?

MR. MCCURRY: Well, the President, for all the reasons that he articulated at Princeton, believes that the concept of Hope scholarships presents the best opportunity for opening up college education opportunities for America's students. It's broad-based and targeted in the sense that it focusses on the type of relief that would allow, typically, people who attend community college if they were getting additional years of education beyond the typical K through 12 schedule that most students in America have now. That proposal was well developed and well conceived. We believe that mirrored -- it was obviously built on the model of the experience in Georgia, which has been very successful in reaching targeted indigent populations, giving people a chance for college opportunity that might not have existed for even members of that same family in previous generations.

So, we think we're on that right track, but the important thing, ultimately, for the President is to create opportunities for college education for millions more American students. And we will be open, as we work with Congress, to deliberation on that idea and looking for the best way if someone has an idea better than the tax credits. But the President, I think it's safe to say, will be reaffirming his support later in the week for the Hope scholarship concept that he identified and set forth last year during the campaign.

Q Was that at Princeton University by any chance?

MR. MCCURRY: Absolutely. (Laughter.) At the -- let me make that very specific -- the 250th anniversary of one of America's premiere educational institutions.

Q Is that where his daughter is going to college?

MR. MCCURRY: She has, I think, just completed applications. And the judgment will be in the hands of those learned institutions.

Q You don't think she gets to go anyplace she wants?

Q Doesn't Princeton take anybody? (Laughter.)

MR. MCCURRY: One of America's most exclusively exquisite institutions of higher learning.

Q Is that just in the last few years? (Laughter.)

MR. MCCURRY: They did, obviously, have lower admission standards in previous years.

Yes, one last question in the back.

Q Mike, former President Jimmy Carter sent a letter to North Korean leader Kim Chong-il. Can you confirm that?

MR. MCCURRY: I'm not familiar with the letter. We'll have to find out more about it. I'm not familiar with the letter. I'll go see if we can get some more on it.

Thank you, see you tomorrow.

END 1:55 P.M. EST