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Office of the Press Secretary

For Immediate Release February 3, 1997
                          PRESS BRIEFING BY

The Briefing Room

1:25 P.M. EST

MR. MCCURRY: Good afternoon, ladies and gentlemen. Let me start -- the President had a good 20-minute meeting today with President Fujimori. With that, I will turn to my esteemed Deputy, Mr. Johnson, who will give you some more on it.

Q Was that a drop-by?


As Mike mentioned, the meeting with President Fujimori lasted about 20 minutes. And while there was a translator available, the meeting was mostly in English, so it was about 20 minutes of conversation.

The President wanted the opportunity to talk to President Fujimori while he was in town, and therefore, reached out and invited him to come to the White House. What he wanted to do was to tell him how much he appreciated and admired the way he had been handling this crisis, and that he thought that the statement that had been made by him and Prime Minister Hashimoto this weekend in Toronto had set exactly the right tone.

The President, of course, had been briefed during the course of the weekend on that meeting, as well as the meeting that Assistant Secretary Davidow had with President Fujimori shortly after he arrived in Washington.

The President told President Fujimori that he thought he was skillfully walking a very fine line and that is between resolving this crisis peacefully without giving into terror. He told him that it was a very hard line to walk, but it's the right one, and he was handling it very carefully. President Fujimori thanked the President for his support and told him that he knew that international support for Peru and Japan during this crisis, particularly support from the United States, was of critical importance. And he told him that Peru intended to continue to be careful and to be patient as it worked to try to resolve this.

During the -- taking advantage of the meeting being here, the President also raised a couple of extra issues. He told President Fujimori how much he appreciated the work that he was doing and Peru was doing with the United States and with General McCaffrey in our joint counternarcotics efforts, and that he appreciated him continuing to push forward on trying to find a resolution to the border dispute between Peru and Ecuador, in spite of the fact that the crisis was ongoing.

Q Was Secretary Albright there?

MR. JOHNSON: The Vice President, Secretary Albright, Mr. Berger, Assistant Secretary Davidow, National Security Interamerican Affairs Senior Director Jim Dobbins.

Q Did the President offer any solutions as to how they could break the stalemate in the hostage --

MR. JOHNSON: This wasn't that kind of meeting. They were talking about how hard the work was to do and how correct it was to be patient, but not to provide concessions to terrorists. It wasn't about those type of specific issues.

Q On another subject --

Q No, let's stay on Peru. Did they talk about proposals that Mr. Hashimoto --

MR. JOHNSON: It was not a discussion about -- those are issues that the Japanese and the Peruvians talked about this weekend. But as I said, what the President wanted to do was to take the opportunity while President Fujimori was in town to invite him into the White House and to have a discussion with him and to tell him that he appreciated the patience that he was exhibiting here and the care that he was taking in resolving this crisis peacefully, but walking that fine line and avoiding giving any concessions to terrorists.

Q David, why was the President reluctant to issue that invitation prior to Mr. Fujimori's meeting with the Japanese --

MR. JOHNSON: I don't know that the President was reluctant to issue any invitations. The Peruvians, as we said I believe several times last week, had not asked to meet with the President while President Fujimori was here. But the President and others as we saw the situation developing and the meeting over the weekend in Toronto, what we saw happening there, the meeting that Assistant Secretary Davidow had upon President Fujimori's arrival in Washington -- the President decided himself that he wanted to reach out to President Fujimori and invite him here to the White House while he was in town.

Q David, since there are no U.S. nationals involved in this hostage crisis, what is the U.S. interest in all this? I mean, sometimes it seems we get involved in things that are beyond our scope, and this would seem to be one of them.

MR. JOHNSON: I think that the United States has a very strong interest in doing whatever we can to support governments who are trying to confront terror. We have two friendly governments here, Peru and Japan, that are in a very difficult situation because of a terrorist attack in Peru. And it's something that I think the United States will maintain a continuing interest in. Notwithstanding the fact, as you say, that we do not have any nationals there and it does not directly involve us, I think that any time there is an ongoing terrorist incident which affects diplomats and affects two friendly countries like this, it's something that we have an interest in.

Q Conditions of prisons or Lori Berenson was brought up during the meeting?

MR. JOHNSON: No, that wasn't discussed. You may have learned from the State Department that Ms. Berenson was one of the issues that was discussed by Assistant Secretary Davidow I believe with another member of President Fujimori's party. But you might want to check with them about details about that. That was not part of this discussion.

Q Did the President offer any good offices to mediate or to try --

MR. JOHNSON: I think I've said about what I can about the content of their discussion.

Q David, did the Japanese send word in the last few days that they would welcome a meeting between the two Presidents?

MR. JOHNSON: I'm not sure about that. Not that I am aware of. I'll see if there's anything about that.

Q It's my understanding that a Saudi delegation will be here later in the month, led by the Saudi Defense Minister. Will the oil minister also be in that delegation?

MR. JOHNSON: I don't know that the delegation has been formed yet. They will, of course, as you recognize, be guests of Secretary Cohen, but you might want to ask the Defense Department who is going to be part of the delegation. I know of no individuals outside of the Defense Ministry who are expected to attend, but they may have more detailed information.

Q The reason why I ask is that there is speculation the Saudis may offer to sell crude to pay for the F-16s.

MR. JOHNSON: I think we've addressed that issue. There have been no formal requests for any F-16s, so to talk about how they might be paid for is better than premature. We've had speculation about things like that before and they tend to peter out occasionally. But we'll see.

Q David, why was there no press coverage of the meeting with Fujimori this morning?

MR. JOHNSON: There were still photographs taken --

Q That's not --

Q But no chance for the opportunity for the press to ask questions or --

MR. JOHNSON: I think President Fujimori is going to have a press conference later this afternoon. You might want to attend that.

Q At the beginning of the crisis Mr. Burns was very critical with the possibility of dealing with terrorists. Did the President repeat such a view?

MR. JOHNSON: The President talked, as I've explained here, about what U.S. policy is with respect to terrorism, and it's one that's been articulated by several U.S. government spokesmen, and that is that we do not see any profit in concessions for terrorists. And that's the, as the President said himself, the fine line that President Fujimori is working there -- to be patient, to try to resolve this peacefully, but not to provide concessions to terrorists.

Q Was the role of Canada discussed on solving the crisis?

MR. JOHNSON: No, it was not.

MR. MCCURRY: Thank you, David.

Other subjects.

Q Is the President reconsidering this use of marijuana in light of the editorial in the New England Journal of Medicine?

MR. MCCURRY: No, he is not. He's doing what he said we would do all along, which is conduct additional expert medical research to see if there are helpful medical effects. I think General McCaffrey has expressed himself to that.

Q Why won't President Clinton take Senator Lott and Speaker Gingrich up on their offer to meet the morning after the State of the Union?

MR. MCCURRY: Oh, I assume he will take them up on the offer to meet. We've said, as you know, here that we would look forward to a bipartisan leadership meeting very shortly after the State of the Union, and it's clear to me that the President and the Majority Leader are working on the same wavelength that there needs to be bipartisan cooperation to move the agenda of the nation forward.

Q -- apparently faxed him a letter asking him to move actually -- to come up there and meet, I think on the 6th.

MR. MCCURRY: Well, we've already announced our schedule for -- oh, on the 6th. Will you guys go call Leg. Affairs and see if there's anything new.

Q But so are you planning anything? I mean you've got the President's schedule --

MR. MCCURRY: We certainly -- the Congressional Affairs Office here plan to be in contact with the Majority Leader's Office to work out an appropriate time for a meeting. That's something we would look forward --

Q But through the Majority Leader rather than responding directly to Lott?

MR. MCCURRY: We would also talk to the Speaker. But as the Majority Leader indicated on television yesterday he has spoken with the Speaker, and we will speak with both of them.

Q So the meeting is definitely not going to be on Wednesday?

MR. MCCURRY: Well, I'll check right now and see what's definite.

Q Mike, the governors said that in their meeting the President said that he would support the lifting of the Boren Amendment, and they seemed to think that that was new, that he had not said that in the past. And I wondered if you could --

MR. MCCURRY: I'd have to check.

Q -- talk about that and also what he told them in terms of giving them relief, if there is a Medicaid cap.

MR. MCCURRY: What he said with respect to Medicaid and our desire to have some effective mechanism that can control cost, what we said and what they said I think is very familiar to those who have followed the debate on federal financing for health care. The governors want maximum flexibility and continued access to federal funding. We want to do something about rising costs, make sure we don't go back to the situation of the 1980s, and put in a prudent mechanism that preserves guaranteed federal access to health care.

Now, we've got some distinct ideas on how to do that. We've talked about a per capita cap in the past. You can imagine that's a subject that we'll be talking about Thursday when the budget comes out. But we'll work closely with the governors to ensure that the right kind of resources are available to guarantee the access to health care while at the same time having the kind of prudent mechanisms in place that control cost. That's the work that we have to do, and I think it was clear for the meeting today that kind of work can be done in a cordial and bipartisan atmosphere.

Q Could you confirm or at least, if you don't know --

MR. MCCURRY: On the Boren Amendment?

Q -- get back to us on that?

MR. MCCURRY: We'll have to check on that. I know that -- let me just check on that before I speculate.

Q Are there some nuances we're missing in this picture -- that the President wants bipartisanship; he's invited up to come to Congress on Wednesday. Can he say I have already a trip on Wednesday, but I can come another day? But you seem to be leaving it up in the air. Is there any problem?

MR. MCCURRY: No, I'm just checking now to see -- we were going to have some further contact. I didn't get a report back on it, that's all. For all I know, Majority Leader Lott was not aware of the fact that we plan to travel on Wednesday.

Q And is the Hill the appropriate place for that first meeting, or should it be here?

MR. MCCURRY: It's appropriate that they meet and that they get to work. And where and when and how that happens remains to be determined.

Q Does it matter where it meets?

MR. MCCURRY: I think the President is obviously willing to go to the Congress; he's doing so tomorrow night to give his message. And he wants to move forward on this agenda, and I think he's willing to work with the congressional leadership to see that gets done.

Q Mike, do you anticipate having a text tomorrow, and if so, what time?

MR. MCCURRY: I'll see. I'm never, ever again going to promise a State of the Union text advance, but work on the speech is progressing well and we'll see where we are tomorrow night.

Q What about some excerpts like last year -- excerpts at 6:00 p.m.?

MR. MCCURRY: We'll let you know tomorrow. No need to worry about that until this time tomorrow.

Q Where is the President working on the speech?

MR. MCCURRY: He's worked on it extensively Saturday and Sunday and has got more work to do. He looks forward to giving it.

Q The balanced budget amendment is going to be the first order of business on the Hill. Is the President going to say anything about it tomorrow night?

MR. MCCURRY: The President will certainly talk about the importance of balancing the budget and talk about his budget plan to do it and he'll suggest that we ought to do it and get on with that business, and that the question of a constitutional amendment is a moot question if we actually got together, Congress and the President, and did the work of balancing the budget by a date certain.

Q -- talk about the amendment in the State of the Union Address?

MR. MCCURRY: I wouldn't be surprised if he said something about the amendment.

Q Mike, several of the governors indicated that the President suggested that he's prepared to go along with their compromise language on aid to legal immigrants on welfare.

MR. MCCURRY: Well, the President, in the discussion that was led by Governor Carper on that point -- right, Barry? Barry was there and can give you a little more on it, but he indicated that -- they acknowledged that there are some real concerns about the status of legal immigrants under the bill. The President reaffirmed the importance of successfully implementing welfare reform. This is about making welfare reform work, not about some wholesale rewriting of the very historic legislation that the President supported. And we're talking about -- in fact, most of the discussion, if I understand correctly, was built around the premise that we all have to work together to ensure that welfare reform is a success.

And then on the specific issue of legal immigration, legal immigrants who would be denied benefits, especially elderly immigrants who have been in the country for some time, there is concern that the governors have about that. Obviously, the President has identified those concerns as well and will have some specific remedies that we'll be talking about in that area.

But don't miss the overall thrust of the conversation. The overall thrust was about things people can do together to build support for welfare reform. In fact, the President was encouraged that several governors encouraged him to continue to do what he's doing -- stimulate a response from the private sector to ensure that the jobs are there. They see how necessary that's going to be.

Q Let me follow up. The President, in the same area, suggested that on his own apparently brought up problems that welfare recipients in Memphis are having finding transportation to and from job sites, and suggested that there could be a smidgen of transit aid.

MR. MCCURRY: If you follow up with Barry Toiv on that; I didn't hear him refer to that.

Q Well, is he going to propose or is there something in the budget to take a portion of mass transit aid, which comes out of the gasoline tax, and reserve it for welfare recipients to and from the job site?

MR. MCCURRY: There was a discussion generally of the importance of transportation to those who are going to locate work opportunities and get to them, and there was some discussion, because they had a separate discussion on the issue of ISTEA. You all are familiar with ISTEA, right? So when they had the discussion on ISTEA, there were some relevant comments about federal mass transit, urban mass transit subsidies and how those were especially important in light of welfare reform.

Q But is he going to propose something in ISTEA to reserve some aid for --

MR. MCCURRY: He will -- I think there will be further discussion of the importance of linking federal transportation subsidies to the welfare reform effort.

Q Is he likely to talk about the elderly and the disabled legal immigrant stuff in his budget?

MR. MCCURRY: Sorry, say again?

Q Will he talk about that specific issue that the governors were out here talking about -- the elderly and disabled legal immigrants?

MR. MCCURRY: He will have more to say on that subject, of course.

Q I mean, tomorrow night?

MR. MCCURRY: He may very well tomorrow night, yes.

Q As for the specific compromise language on legal immigrants, though, the governors seem to think the President thought that their formulation was acceptable. Did he go that far, or was it just more general kinds of -- in the same ballpark?

MR. MCCURRY: I didn't get the impression that they had a specific language discussion. It was more about the general need to address the issue, which the President clearly wants to do, which many of the governors support, but they have a somewhat different formulation of their own.

You may want to do some more on that. On the Boren Amendment, Barry says that the President was reiterating his support for repealing the Boren Amendment in order to provide states with greater flexibility in negotiating payment rates with providers under the Medicaid program. Barry can do more on that subject. We also had a question on mass transit subsidies, which I gave a generic answer to. Do you want to give a more specific answer? I said in the course of ISTEA they did a little bit of transportation subsidy and linking it back to welfare.

Q Can you tell us what the Boren Amendment is?

MR. TOIV: As a matter of fact, I sort of can. The Boren Amendment -- well, repealing the Boren Amendment would provide the states with greater flexibility in negotiating payment rates with providers under the Medicaid program. I think one can assume that the Boren Amendment limits such flexibility. (Laughter.)

Q What does that mean? I mean, what does the Boren Amendment say now?

MR. TOIV: I don't have any more -- I can get more for you on it. But this was a proposal that was contained in the President's balanced budget proposal last year to repeal the Boren Amendment. And the President today in the discussion reiterated his support for repealing the amendment.

And on ISTEA, the President talked about something that he actually talked about with some of the CEOs who gathered in the Cabinet Room several weeks ago to talk about implementing welfare reform, and that was the need to deal with the transportation issue for many welfare recipients, getting them -- the problem of getting them to where the jobs are, sometimes the jobs being in different jurisdictions. And so there is a need to look at how mass transit can be used -- can be developed to connect workers with jobs. And that was something that was brought up today in connection with the ISTEA discussion.

Q Was there some sense of subsidies being set aside specifically in legislation for this purpose?

MR. TOIV: To be honest, the discussion didn't get that specific.

Q Well, one of the governors said that the President specifically suggested the idea of reserving, and he used the word "smidgeon" -- of mass transit aid for subsidies for welfare.

MR. TOIV: That's right. But as far as how you do that or what the -- any specific proposal, they didn't get that detailed.

Q Is that in the budget?

MR. TOIV: Is that in the budget? I don't know the answer to that one. I think we might have to wait on that one. One of the few details we may have to wait on. (Laughter.)

Q One of the governors was saying something about a sevenfold increase in charter schools funding that the President mentioned. I thought it was going to like double.

MR. MCCURRY: Well, when we were briefing on it in Chicago you remember we gave out the numbers on charter schools -- it takes you up to the goal of 3,000 charter schools by the year 2000. And then the flow of how you -- I think the budget request this year for FY '98 would take it from 400 that are in existence now up to about 1,200 by the end of the fiscal year. So maybe a threefold increase.

A sevenfold increase I think gets you from the longer-term, the goal of 2000.

Q You mean the doubling of the number of schools --

Q Tripling the number.

MR. TOIV: Doubling of the money.

MR. MCCURRY: The only report I have from Legislative Affairs is we've accepted in principle a meeting; we're just working out the details of time and place.

Q Two questions on campaign finance. In his position at the White House, did Harold Ickes fax instructions to a Texas donor who is part of which the donation was going to go to get out the vote efforts?

MR. MCCURRY: I have only the following on that subject: Based upon our understanding of the facts, Mr. Ickes' identification of entities does not constitute a solicitation in violation of the Hatch Act. Rather it is a response to Mr. Meddoff's request for organizations to which he could make substantial contributions. In general, identifying entities to which contributions can be made does not constitute a solicitation in violation of the Hatch Act, nor is it a violation of the Federal Election Campaign Act.

Q And whose interpretation is that?

MR. MCCURRY: It's an authorized statement from me from the Legal Counsel's Office.

Q They say that -- the article says that in addition to pointing out places where he could give tax-exempt contributions, that Mr. Ickes solicited him for a $500,000 contribution to the DNC. Are you saying, to your knowledge that didn't happen?

MR. MCCURRY: I'm not speaking to the facts of the situation. I'm giving the authorized statement from the Legal Counsel's Office, and Mr. Davis can help you with follow-up on that.

Q And do you know whether anyone here has contacted Harold Ickes about that? He is not still with the administration?

MR. MCCURRY: I don't know whether he has formally left, or not, or whether he is in transition.

Q Second issue, about the time that there was a great deal of talk about the coffees here and the other people coming in and out of the White House. Has the White House ever reorganized the way people are given access to the White House and to the President itself?

MR. MCCURRY: We have. Mr. Bowles sent a two-page memorandum establishing new procedures that was distributed, I guess, well over a week ago now.

Q How would you describe access now? Is it harder? Is it more rigorous?

MR. MCCURRY: Yes, it now goes through a checking process that's much more rigorous and attempts to address what clearly were lapses in the ability to screen and check those scheduled to have encounters with the President during the course of the last year.

Q May I ask a budget question? The proposals that were put out yesterday by Secretary Rubin, two in particular were a little confusing. The first is, there is going to be money to Puerto Rico for development there. And the second is a D.C. tax package, which we haven't heard anything about.

MR. MCCURRY: I think you've heard -- in the past we've briefed about the Economic Development Corporation that the President will propose for the District of Columbia. The funding level is the new thing that was identified yesterday, about $260 million over five years, I believe.

The Puerto Rico provision, I am not familiar with, and I understand Treasury is in a position to brief on it, or to answer questions on it.

Q Do you have a number of what the tax increases in the new budget are going to be, as opposed to the tax cuts?

MR. MCCURRY: No, I've got the tax cuts -- (laughter) -- which were conveniently provided by the Treasury Department yesterday, and they're $100 billion. Obviously, most people would worry, is there any broad-based income tax increase proposed in the budget, and clearly not. There are some things they're doing in terms of base broadening. The Secretary of the Treasury has talked about that.

Q Why do some of the tax cuts have sunset provisions in them? Isn't he putting a sunset provision on a couple of them?

MR. MCCURRY: No, under our economic assumptions about the future, these would be permanent tax relief measures.

Q But the tax cuts are not permanent.

MR. MCCURRY: Under our assumptions, these would be permanent tax relief measures.

Q So if your assumptions aren't right are they permanent?

MR. MCCURRY: Well, our assumptions in general have been pretty much on the money. We're very proud of this.

Q But on the tiny fraction of a percent that they're wrong, what happens to the tax --

MR. MCCURRY: I'm not going to -- that's a technical budget issue that I'm not going to attempt to -- (laughter).

Q Do you have a ballpark figure of what the tax increases will be from the proposal?

MR. MCCURRY: No, I don't.

Q -- $80 billion has been mentioned --

MR. MCCURRY: No, I've seen a figure in print of $39 billion for one set of them, and there are some extended provisions that go elsewhere. But I don't have a total figure.

Q Will there be an additional cigarette tax or tobacco tax?

MR. MCCURRY: I have not heard anything to that effect.

Q Can you tell us, is this going to be a wash? Or is there going to be a net increase in tax deductions or a net increase in taxes?

MR. MCCURRY: I know that that will be something that all parties interested in the President's budget Thursday will rush to determine and analyze and there will probably be different answers given by different people.

Q The President -- he said that there would be a net tax decrease. Is that correct?

MR. MCCURRY: Well, if you play with some of the numbers you just asked me about, you would see he's right. (Laughter.)

Q Mr. Gingrich has confirmed that he has invited Jesse Jackson to sit with him in the Speaker's Gallery at the State of the Union. Has the President and First Lady decided whom their guests will be?

MR. MCCURRY: They've got some ideas. I think they're delighted, obviously, that Reverend Jackson will be there because he's such an important and inspirational leader in so many communities in America. They've got some people that they will be acknowledging both by inviting them to be with the First Lady and then also people the President will refer to, and I know you all will be interested in who they are tomorrow night.

Q In addition to the Georgia trip, what else can we expect from this White House in terms of promoting and selling the budget -- other travel, Cabinet types, et cetera?

MR. MCCURRY: The President has said in the past that he would like to go out particularly to state legislatures, and states are going to be so much a part of the work that we do on education, on welfare reform, on some of the things to strengthen our communities. We've suggested in the past he might even look for opportunities to go talk to state legislatures or to visit additional places, and you can foresee that type of opportunity after the State of the Union.

The only thing scheduled right now is the trip we take on Wednesday.

Q To address the concerns on legal immigration, do you think there would be a legitimate vehicle to either go through the appropriations process or reform immigration law, rather than revisit the welfare law?

MR. MCCURRY: I don't take a view on that. I think there are a number of ways that Congress could address some of the concerns the President has. You could do that either in the authorization process or the appropriations process or the appropriations process perhaps. I think that would be a determination for Congress to make.

Q Mike, J.C. Watts is apparently going to be the first African American ever to respond to a State of the Union speech. Does the White House have any reaction to that, or any comment on the selection?

MR. MCCURRY: He's a very eloquent, talented member of Congress, and I think the President himself in his remarks will talk about ways in which Americans can reach across racial divides and come together. And the choice of the Republican leadership to designate an African American to give that is a very encouraging development.

Q Mike, Trent Lott said yesterday that Alexis Herman's confirmation will probably be successful if the White House can document that she was not involved in the May 13th bankers meeting last --

MR. MCCURRY: Can you hold that for a second?

But, Deborah, to come back to that question, in saying that he is a very talented an effective member of Congress, I would also acknowledge that there are many reasons why he was chosen. He, himself, said yesterday that he was not -- didn't believe he was chosen solely because of race, and we believe that, too. I'm sorry, I just wanted to add that point.

Q What has the White House done today to send documentation to the Hill proving what she told Trent Lott on Friday?

MR. MCCURRY: She indicated to him that he would -- that follow-up, I assume, is taking place by Counsel and by others. But if you call Joe Lockhart, he can probably give you some sense of what documentation they're providing.

Q Mike, you mentioned that he'll talk about bridging the racial divide. Will he offer specific remedies that we'll see in the form of legislation or program or policy?

MR. MCCURRY: This is not -- on matters of races, you've heard the President address them. They are matters of the heart as much as matters of policy. There are aspects of our policy that I think are reflected in ways we bring people together, but this is also a way to comment and talk about the ways that individual Americans can reach across and that elected leaders and those in positions of responsibility can conduct themselves responsibly so that we don't exacerbate tensions that do exist in our society.

Q Mike, you mentioned on Friday that the President will have a fairly detailed portion of the State of the Union speech concentrating on foreign policy. Presumably, one of the things he might talk about is international cooperation to fight terrorist threats. In that context and after meeting with Fujimori today, do you think that he would make reference to the hostage crisis in Peru?

MR. MCCURRY: I'm not anticipating that. I think he will talk about those challenges we face in the post-Cold War era, which the fight against terrorism is certainly one, and one area in which the United States government should devote its resources and effort.

Q What is -- getting insurance for health for children -- where does that fit into the President's budget? For needy children?

MR. MCCURRY: Well, we haven't said specifically that it fits in one way or another or how specifically, but it is obviously a concern of the President and one that he might not only address tomorrow night, but might also address in terms of his budget proposal.

Q And where would that money come from? Would it be part of Medicaid, or would it be a new program?

MR. MCCURRY: I'll leave that detail to the very good budget briefings you will be getting on Thursday.

Q Mike, the week after the budget comes out, CBO will score the President's budget. If, like last time, CBO does not give him full credit for what OMB's baseline quantifies, is the President prepared to amend it and submit suggestions for where he'd do either additional revenue raisers, or spending cuts to make it come under balance under CBO?

MR. MCCURRY: First, let me say we are not having the same kind of contentious debate about assumptions that we had this time last year, or in the proposing of the FY'97 budget. We are, by contrast, having a reasonably good discussion at a technical level about what the economy is going to do. And, of course, we're seeing very encouraging economic numbers that even are better than the very conservative economic forecasts that we made at the Office of Management and Budget.

So there will be, inevitably, some differences in the way that the two different organizations look at the future of the economy. We tend to believe those are technical issues for experts to discuss because in past practice Congress, as they consider a President's budget, will sometimes pick and choose from OMB forecasts or from CBO forecasts. They sometimes mix and match. And we assume in this case there will a look at the technical assumptions behind the budget, the forecasts, the projections.

We, of course, hope that we get some credit for the generally accurate nature of the President's forecasts, and then we'll see what that does to the scoring of the baseline. It will be clear that there will be some differences, but we don't think they'll be insurmountable differences.

Q But the President would advocate some policies to make it up? I mean, there are predictions that by 2002 the gap could be like $60 billion.

MR. MCCURRY: The President has a very credible balanced budget proposal that we believe is based on conservative and accurate projections. And we believe that they would give this country the balanced budget it wants by the year 2002. If CBO ends up taking a different point of view, we'll work with them to develop the right forecast.

Q On the Medicaid per capita cap, is the President set in stone on the level of that cap, or might that be negotiable? Some governors said, well, it's in the 7.5 percent range with an additional flexibility --

MR. MCCURRY: The President will propose a budget on Thursday, and then we will, we hope, enter into discussions very quickly with members of Congress about how to write the budget, how to structure a balanced budget agreement. And we hope we can reach that agreement quickly. Beyond that, I'm just not going to speculate too much on what's happening.

MR. TOIV: He also did say that he wanted to hear from the governors.

MR. MCCURRY: That's right. And he did tell the governors that he wanted to hear from them on that kind of subject, and they certainly have got a role in the debate, too.

Q Will we be briefed on the budget on Wednesday? And if so, how?

MR. MCCURRY: I don't anticipate budget briefings on Wednesday. I know that you'll hear from the President, Vice President, and a range of technical experts on Thursday. We might, for purposes of some of the wires so they can get a head start on the story after midnight on Tuesday -- I mean, Thursday --

Q Wednesday night, midnight.

MR. MCCURRY: Wednesday at midnight. So you have something Thursday morning, we may talk to you late Wednesday night.

Q Why just the wires? Why not the television --

MR. MCCURRY: Well, and those of us who are the electronic wires.

Q -- a clear answer on the President's guest lists?

MR. MCCURRY: I'm sorry, say again.

Q Getting back to the President's guest list for the State of the Union, could the governor of Georgia be there with him that night?

MR. MCCURRY: I just don't -- he, today in the meeting with the governors, said he knew that they were in town, some of them might be staying in town. He invited those who could to participate and to, if they could attend the speech, to do so because much of what he would talk about tomorrow night impacts directly on the work that governors do.

I think everyone knows that he will see Governor Miller on Wednesday. That's in part because Governor Miller has been such a leader in structuring the type of education opportunities that the President wants to see reflected in the HOPE Scholarship that he will propose in the budget. And our admiration for his work is well known. And we don't know whether he's going to be there in any event at this point.

Q In the State of the Union, will he talk about adjustments in the CPI?

MR. MCCURRY: That would be pretty boring so I don't why he would do that. (Laughter.) I mean, it's important. He'll talk about balancing the budget. He'll talk about -- I think he's going to say -- look, adjusting benefit programs for inflation -- I'm not going to suggest he's going to get into that subject. But he is going to talk about the importance of balancing the budget and talk about how we need to reach agreement. But I don't think he's going attempt to sit down and write a balanced budget on the spot, particularly on a technical issue that needs expert review such as the CPI.

And you're going to ask, is he going to appoint some kind of commission, and the answer is, I don't know where that idea comes from. That's floating around in the ether somewhere. That was -- no, that was Chairman Greenspan's idea. I am not aware of any --

Q You will knock that down, too. (Laughter.)

MR. MCCURRY: -- not aware of any plans for the President to address that tomorrow night.

Q Who will be sitting in the First Lady's area?

MR. MCCURRY: The folks that we put out tomorrow. (Laughter.)

Q Are you saying that he invited all the governors to come?

MR. MCCURRY: He said that to the degree that those who were there who could come, that they should come. I think he did that in the pool spray at the top.

Q You said there are no surprises in the State of the Union. Is there any news?

MR. MCCURRY: I told you. I said there are no surprises -- so that if there was anything in there you hadn't heard before, you'd say, ah, news and you could write it accordingly. There will be some things in there you haven't heard before.

Q Like?

MR. MCCURRY: You'll hear them tomorrow night.

Q You gave us a big preview on Friday. Don't you want to freshen that a little bit?

MR. MCCURRY: Well yes, we've got the governors today. We did a lot about education and other stuff. We're pretty fresh. (Laughter.) I think.

Q Mike, I wondered if you had any comment on the --

Q Is the President going to change parties?

Q -- on the Time Magazine story and the word that the person who is now the chief fundraiser for the Democrats apparently -- Secretary of HHS and the suggestion is that some regulations may have been modified because of his lobbying. I wondered if the White House has checked into and if you have any comment?

MR. MCCURRY: Well, Mr. Bowles, first of all, addressed that yesterday and I certainly agree with what he said yesterday. But the general issue of nursing home reform is one that I think has been covered extensively and has been addressed by the Department of Health and Human Services and what we've done to implement the law passed by Congress in 1987, draft the appropriate regulations to protect those who are providing quality health care to seniors -- even at a time when some people are saying let's throw all the regulations out the door altogether and is very, very well known.

The best thing to do would be to go and talk to those who actually developed the regulations, promulgated them and now are in the process of implementing them, to ask them what the impact has been of people who are experts.

Did they talk to Mr. Solomont? They should have because he's a recognized expert in nursing home care and he's someone who's opinion I think counts a lot in medical circles. But they've talked to consumer groups, to health care ombudsmen, to state public health officials, to a wide variety of people. And HHS is, I think, more than prepared to do a great deal on that subject.

Q Mike, did you get a better answer on if, in fact, and when he's going to the Hill to talk about the budget?

MR. MCCURRY: Yes, I did. I said that it's been agreed to in principle, but no date and time has been set.

Q No, I mean if there's a meeting with Lott and the Speaker.

MR. MCCURRY: That's the answer, agreed to in principle but no date and time has been set.

Q Is the President going to support toughening up the Clean Air Act? It sounds like the governors are against that.

MR. MCCURRY: We have promulgated regulations through the Environmental Protection Agency. There's now a set of draft regulations that are out there publicly and people are rendering comment on those draft regulations. But the President will remain committed to clean air, clean water, continuing to meet his obligations as someone responsible for environmental protection.

Q Back to the budget briefing, you'll make sure that there won't be a briefing while we're in the air coming back from Georgia or something like that?

MR. MCCURRY: Yes. Yes, we wouldn't do -- anything we did, we'd do after people returned.

Q Are you going on the trip, Mike?

MR. MCCURRY: I suspect so; I don't know yet.

Q Back to Rita's question. The President last week stressed that donors might get access, but they wouldn't get a guaranteed result. And I think the question that was asked about Mr. Solomont is, this is a donor who seemed to get a result, a desired result, and I wonder, is there a feeling at the White House that everything he did was proper, no improprieties there.

MR. MCCURRY: He got -- I'm not aware of anyone suggesting he did anything improper. He is someone who would have a right to comment like a range of Americans would on regulations that impact the provision of care to the elderly -- consumers -- and did. We actively reached out. And again, HHS is the agency that did this, so I would suggest you contact them. But they actively reached out to a wide range of people who would have concern about how we were going to implement regulations mandated by Congress in 1987.

But as the President said, no one who is a fundraiser gets any kind of guaranteed result or any directed result as a result of him. They get to make their case, like any other group of people get to make their case. We listen to a lot of representative consumer groups that had no interest in making financial contributions, but listen to them because they're expert in this area and they have concern about the quality of health care being provided to seniors. That's exactly the way the process should work.

Q So there's no concern about his current role as a fundraiser --

MR. MCCURRY: I'm not aware of anything that would lead me to have any concern.

Q Mike, what's he going to talk to the Democratic Governors about tonight?

MR. MCCURRY: He's just going to say hello, thank them for their work. There's a lot -- they're organized to begin the process of contesting gubernatorial seats in 1998 of which there will be many at stake, and that will be one of the stories of the 1998 campaign cycle. So, surely, he's interested in making sure that the Democrats are able to elect Democratic governors around the country. This is their annual dinner of the Democratic Governors Association.

THE PRESS: Thank you.

END 2:05 P.M. EST