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Office of the Press Secretary

Embargoed For Release Until 6:30 P.M. EST Tuesday, February 4, 1997
                          PRESS BRIEFING BY
                      OMB DIRECTOR FRANK RAINES

The Roosevelt Room

4:22 P.M. EST

MR. BOWLES: Thank you. It's nice to see you all today. I think you've got an exciting speech ahead of you tonight, and I mean that. It's finished.

Q Positive?

MR. BOWLES: Positive. It's finished. The President is resting. And I think the people who have worked with him are all --

Q Tired.

MR. BOWLES: To say the least.

Let me tell you what you're going to hear. In the Inaugural, the President talked about his vision for the 21st century. Tonight, you'll hear him come forward with a real action plan. It will be a true concrete plan of action. It will be divided along six basic areas, all of which deal with preparing for the 21st century, what we as Americans, as individuals, as a nation, need to do to prepare ourselves for the 21st century.

The first section will deal with the unfinished business from the first term. That will be three basic areas: the need to balance the budget; second, to finish the unfinished business of welfare reform; and lastly there is unfinished business in campaign finance reform. So three basic areas there.

The second section of the speech will deal with the President's top priority. This will be the longest portion of the speech by far, and it will focus on education. The President will talk about the need to invest in education, training and early childhood programs so our kids are prepared to enter school ready to learn and they have the skills necessary to compete for those high-wage paying jobs in the global marketplace.

You'll hear him talk about, as he did in the campaign, how we must prepare every 8-year-old so they can read, every 12-year-old so they can log on to the Internet and every 18-year-old so that they can finish high school with a diploma that means something and then go on to two extra years of schooling in college -- so that the first two years of college become as universal as high school is today. He will focus a good portion of the education part of his speech on the need to have high standards, and not just high standards for students, but high standards for teachers and high standards for schools.

The third portion of the speech will deal with the need to invest in technology so that America remains on the cutting edge of research and development. Three areas there he will focus on -- how we can expand Internet, the need for space exploration and to invest in medical science.

The fourth area of the speech will deal with what we need to do to have stronger families and stronger communities. In the area of stronger families, he will talk about the expansion of Family and Medical Leave law. He'll talk about making health care more accessible to more Americans. He'll again talk about those 40 million Americans who don't have health care insurance and he'll talk about the step by step process we need to take to bring health care insurance to more Americans, particularly children.

In the area of having stronger communities, he'll talk about the need to revitalize our urban centers and what we need to do, to do just that. He'll talk about the need to protect the environment, to press the fight against crime and drugs, to expand national service and to celebrate our culture and the arts.

The fifth area deals with foreign policy and the foreign policy section of the speech will be longer than any other state of the union he's given. And there, he will talk about the need to keep America strong as the indispensable nation.

It will be divided into six basic areas: the need to build a united democratic Europe around an expanding NATO and a strong partnership with Russia, the need to meet the challenges of change in Asia, the need to deal with the new security challenges that we are faced in the world today of drugs, of terrorism; fourthly, to maintain our position as a force for peace and freedom throughout the world, where our values and interests are at stake; fifth, the need to expand the new economic architecture to expand exports to create high-wage paying jobs here at home; and lastly, to do all these things we must invest in both our military and our diplomatic efforts.

The last section of his speech will be a call to unity. This President clearly believes that diversity is our greatest strength. And he will call for us to come together as a nation, as one America. And he'll do all that in about 10 minutes. (Laughter.)

Q Is there any federal muscle behind this call for standards? Is it just a rhetorical call, or is there actually some kind of incentive that he's going to describe tonight?

MR. BOWLES: Yes, there will be a big incentive, and I think when you hear it you'll be pleased.

Q Money?

MR. BOWLES: There will be some money there.

MR. MCCURRY: You'll see a little three-pager that we put out that you just got. They've got some of the specifics on there.

DIRECTOR RAINES: You may not have numbers there, but there will be -- the President will be giving you specifics on each of these as part of the action plan. In terms of the commitment overall to education and training and preparation of the American people for the 21st century, he will point to a commitment of $51 billion that will be devoted to this effort. That is about a 20-percent increase year over year from 1997 to 1998 and it will be about a 40-percent increase by the year 2002. Obviously, in the context of a balanced budget, what this means is the President has established this as his priority and has devoted the scarce dollars that he has available within a balanced budget to this priority in a very major way.

To give you some perspective on this, this is roughly double the size of the commitment that Lyndon Johnson made when many -- when the federal government first began its investment in this area in real dollars. So this is a very major commitment by the President within his balanced budget to what he's identifying in this speech as his priority for the nation.

Q Are you saying the $51 billion is additional money?

MR. RAINES: No, let me repeat -- $51 billion total; 20-percent increase from 1997 for the same area; 40 percent --

Q So the $51 billion is FY' 98 --

MR. RAINES: -- 1998; 20-percent increase from FY '97. It will be a 40-percent increase by the time we get to 2002 when that number will approach $60 billion.

Q All education?

Q That's for the whole education agenda?

MR. RAINES: This is for the education and training agenda.

Q How much of that goes for standards -- the incentives on standards? Do you know?

MR. RAINES: We will give you program by program when we get there, but the President will explain to you on the relative roles of the federal government and of the states on each of the areas of his action plan. So I think you should really wait to hear how he lays that out, and you will see how it will all fit together.

MR. MCCURRY: Remember, our charter schools in Goals 2000, which were sent -- we gave you those FY 98 proposed amounts in Chicago.

Q Do you have an aggregate number for the technology investment that he's calling for, or is there a breakdown you could give us now?

Q If this will be disbursed to the states?

MR. RAINES: There is a range of responsibilities here between what the federal government will do and what the states will do, but particularly in education training. As you know, the states are partners in the actual operation of these programs, and so the vast bulk of the funds in this area are disbursed through the states and through local school systems, as well as through education funding for students.

Q And this will reach $51 billion by when?

MR. RAINES: This will reach $51 billion in Fiscal Year 1998.

Q So this includes the HOPE Scholarships and the tax cuts and the whole --


Q That's $39 billion, right -- the HOPE and the $10,000 deduction adds up to about $39 billion of the $51 billion?


MR. RAINES: No, those are five-year figures. You're thinking of five-year figures.

Q Mr. Bowles on campaign finance reform, is this going to be another call for passage of the pending legislation of McCain-Feingold, or is it going to be a broader --

MR. BOWLES: He will clearly refer to McCain-Feingold bill. He will call for passage of real campaign finance reform that he will focus on.

Q Given the questions you've been dealing with here on that issue, how is he going to deal with the inevitable Republican questions of his credibility on campaign finance reform?

MR. BOWLES: This President has been for campaign finance reform before -- for years. And we're going to expend a tremendous of capital going forward to see the passage of real, hard campaign finance reform.

Q He sets a challenge deadline, is that right, July 4?


Q But again, they're going to raise questions about his credibility on this, given the track record during this past campaign. Will he address that in any way? Or how will the White House respond?

MR. BOWLES: I think you'll hear him talk tonight about the need for campaign finance reform, why we need campaign finance reform, and when we'd like to see it enacted it, and he'll make a commitment that we're going to go forward to do everything possible to see that it passes.

Q Erskine, based on the priority that the President is putting on education tonight, one might be tempted to think that the President thinks the American educational system is in dire straits. To what extent does that reflect his view?

MR. BOWLES: I think he sincerely believes that we need to raise the standards of education in America, that we need high standards -- not just any standards, but high standards. And if we raise the standards, he believes that the American people will measure up and the performance will improve. He does believe that we need to invest in our schools and we need to bring them up to world-class standards, that we need to have every school connected to the Internet, that we need to have computers in every classroom, that we need to -- our teachers need to be properly trained so that they can use the computers and we need to have the appropriate software in the schools.

Q But those standards won't be federal standards, right? That's not what he's talking about?

MR. BOWLES: They will be national standards; they will be administered by the states.

Q But, in other words, the states will not be required to test for these standards? You're just -- you will provide financial incentives for those who do? Is that --

MR. BOWLES: That's correct.

Q In other words, you won't lose money if you don't do this, but you will gain money if you do.

Q What's the obverse of that? Suppose a district refuses to go along with standards by 1999 -- just says, we're going to go on our own here? What is the punishment? What is the disincentive for that?

MR. BOWLES: At this point and time, I don't know of any penalties. What I can say is there will be national tests. The Education Department will pay for it. They will be available in the spring of '99. The states will administer it.

Q Will the Education Department develop it?

MR. BOWLES: I believe it's being developed right now by outside groups.

Q To what extent does the President's focus on educational initiatives here advance your broader plan to achieve and continue his bipartisan cooperation?

MR. BOWLES: Well, I think that you'll hear the President address in -- I think you'll hear him talk tonight that this is not a Republican problem or a Democrat problem. It's not a liberal or conservative problem. What it is, it's an opportunity for America and that we need to move forward, and in order to move forward, he has a 10-point program which I believe you'll hear a lot of bipartisan support for.

Q The last time the President tried to rally the public to solve a big problem, which was health care, he painted a picture of a system that really was in crisis. Does he feel that way about the educational system?

MR. BOWLES: I don't think he feels it's a crisis, I think he feels we have a lot of opportunity if, in fact, we're going to reach our potential and compete on the global marketplace.

Q -- draw up the standards?

MR. BOWLES: On welfare reform, he'll talk about the unfinished business of welfare reform. He'll talk about the areas that were in the last welfare bill that he believes had nothing to do with welfare reform that we need to fix in order to go forward -- nutrition and legal immigrants.

Q Sir, who is going to draw up the standards, the federal or the states?

MR. BOWLES: There will be national standards that will be developed on a national basis. They will be administered by the state.

Q Yes, but who is going to draw these up? Who is going to decide what's a good standard and what's not, some special schools or some special commission, or what?

MR. BOWLES: I can't give you an answer on that; I'll get it for you.

Q Can you get back to me?

MR. BOWLES: Yes, ma'am.

MR. MCCURRY: -- standard has already been written in the TIMSS test, which we talked about that in Chicago, and that's an internationally developed standard that's already there. The other one that the Education Department probably will work on is literacy. Literacy and math are the two areas that the President will focus on.

MR. RAINES: The key point here is, this is testing student achievement. This isn't curriculum. This is testing achievement in math and in reading. And the idea here isn't mandates. The idea is to establish a high standard and challenge the states and the schools to have their students do as well as possible against these high standards so that they can then take whatever actions are necessary for their students to perform well, going forward. This is an approach that is very different from one of trying to mandate from Washington exactly how they're to get from one place to the other.

Q For purposes of actually dispensing the federal money, will only one test or two tests be recognized for each subject?

MR. RAINES: Let me go back. This is not tied to eligibility for federal funds. This is an opportunity for schools to challenge themselves to meet national standards. What we will be doing is helping pay for the development of the test and the first administration of the test. But this is not a new set of requirements on states. This is, we are going to give you an ability to test your students against national standards to see how well they do. And it's been the experience in a number of other areas if you hold out a high standard, then people will change the way they do things to try to meet that standard. And that's what our hope is.

Q What are the financial incentives?

Q -- pay for development of the test and the first administration of this? How much money are we talking about from the federal government?

MR. RAINES: I'm sorry, I didn't hear you.

Q For this national standards -- to develop the test and to finance the first administration of the test to every student, how much money does that involve?

MR. RAINES: It's not a lot -- for developing a test, it's not a lot of money. This is not a money question, this is a standards question. This is achieving high standards, but it's not a lot of dollars.

Q What's the financial incentive other than it won't cost them anything to do it?

MR. RAINES: It's not a financial incentive. Listen to what the President -- listen carefully to what the President says tonight. He is calling on the nation to meet a challenge. He is setting forth a challenge, and he's setting forth a measure by which we are seeing how well are we doing against the challenge.

Q So a state will not be required to give the test if it doesn't want to, it's just available?

MR. BOWLES: No. The Education Department is going to pay for it, okay. It will be focused on 4th grade reading and 8th grade math. It will be available in the spring of 1999, and the states will be the ones that administer it.

Q Mr. Bowles, I thought you all just said a couple of minutes ago that there are financial incentives for people who raise their standards.

MR. BOWLES: What we tried to say was that the Education Department would be the ones that would pay for it, so they will be the ones that will be handling the financial burden of it, if any, of the test.

Q Okay, so the incentive of this is -- as they used to say, the honor of the thing in the achievement itself?

MR. BOWLES: It's just like any other organization that you've ever been involved with. If you raise the standards, you will generally find that people will perform to that level. If you keep your standards at a very low level --

Q I understand that, but you're not setting up something where there is something that a school district could miss out on if they do not --

MR. RAINES: No. What we are doing, however, is making a very significant investment in a number of tools that school districts have found successful in helping to raise standards and helping to teach students. And the President will mention a number of those and you'll see a number in the budget. Goals 2000 has been an effort that a number of states have found to be very helpful; charter schools as another technique. But we will be giving them instruments they can use, but how they actually have their students meet the standards is something that the school districts are going to have to do.

Q Suppose the state says no, but some of its school districts say yes -- is there a bypass provision then?

MR. RAINES: I think we intend to make the money available directly to school districts, and so this is not a question of states versus their local districts.

Q So the school districts are applying to the Department of Education.

Q Are there any deadlines besides July 4?

MR. BOWLES: I don't recall any others that are in there.

Q And July 4 is the only deadline; that's for campaign finance reform adoption?

MR. BOWLES: Yes, that's the only one I recall in there.

Q How about tax cuts? Is it still $100 billion?

MR. BOWLES: Not changed. Same number we gave out this weekend.

Q On the investment in the Internet, are there new proposals within that? Can you expand a little bit on what you're talking about there?

MR. BOWLES: There is not a lot of wordage in there, but he does talk about a couple of things. But I'd rather wait and let him say that tonight rather than to give it out right now.

Q When will the President start talking directly to state legislatures, going traveling to urge them to adopt these --

MR. BOWLES: I think we'll probably go to our first state legislature next week. We're working on a trip.

Q Can you say where?

MR. BOWLES: When I left this afternoon, we weren't sure, but we're working on it, and hopefully we'll have an answer tomorrow.

Q Can we talk about insuring children?

Q Sir?

MR. BOWLES: Yes, ma'am.

Q Did I understand you to say that you're going to give this money directly to the schools themselves and not go through the states?

MR. BOWLES: No, ma'am. This is something that -- for the standards for the national tests, the Education Department will actually pay for it.

Q Yes, but didn't you say just a minute ago that this money would go directly to the schools, not through the states.

MR. RAINES: The money -- I think we're getting very confused here. For the test --

MR. BOWLES: And we're probably contributing to it.

MR. RAINES: For the test, we will develop a test and we will assist the school districts in paying for the administration of the test. And that money will be available to any school district that wants to administer the test.

Q And not have to go through the states then?

MR. RAINES: They don't have to go through the states now to administer tests, and, therefore, they will be able to administer the test without having to go through a state to obtain funds.

Q Is this every grade level?

MR. RAINES: Fourth grade.

Q Only fourth grade and eighth grade.

MR. RAINES: Eighth grade math.

Q At just the one time, or is it continuing annual thing?

MR. RAINES: Every year.

Q -- the first time it's administered --

MR. RAINES: We will make sure that every school district --

MR. BOWLES: I do think on this, you probably have exhausted Frank's and my depth of knowledge.

Q How about insuring children? What is the President going to call for? What are his goals to insure children?

MR. BOWLES: Well, we have several things in there about offering health care insurance to kids. They'll deal with a number of different ares. It will be -- kids are actually affected a lot by the program we have for workers in between jobs which offers insurance to any person who has insurance who loses their job, they'll be able to keep that insurance for a six-month period of time. That has an enormous benefit to children. There will be about 750,000 children that will be positively affected by that.

There will also be several other programs in there that will be administered through the states that will have an impact that will increase the number -- there are about 10 million children now who don't have insurance and it will bring kids without insurance through all -- I think there are five or six of these -- is that right -- up to around 4 million to 5 million kids who have insurance.

Q Can you talk about the choice of education as the centerpiece for this one? It's something that we largely leave to state and local governments to actually administer.

MR. BOWLES: The President believes that as you look to equipping the American people with the tools they will need to compete in the 21st century, that our first priority has to be education. But he's already said that it is critical to the credibility of his administration that we balance the budget. So we have to do it within the constraints of being fiscally responsible. In that constraint, our number one priority is investing in these tools to primary tools, education and technology.

MR. MCCURRY: Erskine, the President's rewriting the speech and just asked to see it. Let's just take one or two more. (Laughter.)

MR. RAINES: Let me be clear on one item. I think someone asked a question about taxes -- that he is not going to be repeating a number of things that you've already seen. So he's not going to be repeating taxes. He's not going to be repeating on any details on Medicare. So things that you've already seen, he's not -- this is not a catalogue of every proposal that's being made.

This is very much the theme that Erskine has set forth, and which I have to tell you as a Budget Director, the President made it very easy to put this budget together because we knew what he wanted as his priority. And so we had to find the funds to fund the priority within the context of a balanced budget. In some ways, that made this speech easy to write, as well, because he's very clear on what his priorities are. No one reading this speech is going to come away saying, I wonder what he's really going to focus on. It's going to be very clear in the speech and in his budget.

Q Mr. Bowles, non-budgetary question, foreign policy question, please. What was -- how do you know it's the longest that any President has ever spent on foreign policy?

MR. BOWLES: Not any President; it's the longest this President has spent on foreign policy.

Q Oh, the longest this President?


Q Do you expect him to mention any particular areas, in particular, Korea? Will he renew his call for four-way peace talks? And in China, will he talk about the human rights policy there?

MR. BOWLES: He'll mention both Korea and China in the speech.

Q How about Japan?

Q On health care for children at the state level, are you saying, in effect, that you want to take action to increase the outreach so that those that are eligible that are not receiving the benefits will, in turn, get the benefits? Or are you actually talking about expanding the program to include children up to age 18?

MR. RAINES: We're talking about both children who are eligible but not now covered, and children who are not now eligible will both be affected by these new initiatives.

Q So are we talking about federal money -- additional federal money for this coverage, is that right?

MR. RAINES: Yes, these are both -- all of these initiatives related to children and health are budget items.

MR. BOWLES: And you'll see that on Thursday. That will out when the budget comes out.

Q You talk about revitalizing urban centers. I assume you mean cities? And what are you going to do, for example, in this city?

MR. BOWLES: He'll have about five or six things that he'll mention tonight.

Q Will he talk about the --

MR. BOWLES: I think you ought to wait and let the President say something tonight that I haven't ruined for him.

Q Will he talk about diminishing the federal role in any area? Like in the last year's speech, he talked about the era of big government being over. Will there be any areas where he talks about diminishing the federal government's role?

MR. BOWLES: Yes, I think you'll hear him talk about the need to -- we have to balance the budget, that it's critical; that we have to continue on the path to restore fiscal discipline in this country, and to do that, we have to make choices.

Q Any specifics that he's going to --

MR. BOWLES: He's going to principally talk about tonight what his priorities are. We got the budget coming up Thursday. You'll see lots of choices we had to make in order to invest in these priorities.

Q Who are the guests in gallery?

Q Are we going to have a list of those?

MR. MCCURRY: I can give you some of those. But let me review where we are and how the excerpts you just got and the background material that goes with it is embargoed until 6:30 p.m., as is this briefing we've just conducted -- embargoed until 6:30 p.m. The President's making some final changes in the speech and I hope some time shortly after that to have an advanced text where you're looking at a full text before we get too late in the evening.

Q Thank you very much.

Q The guests, Mike?

Q Mike, the guests?

MR. MCCURRY: He's got -- you can tell from the excerpts we've just given you that the Reverend Schuller will be in the box with the First Lady.

THE PRESS: Thank you.

END 4:50 P.M. EST