THE WHITE HOUSE

Office of the Press Secretary

PRESS BRIEFING CHAIR OF THE PRESIDENT'S NATIONAL ECONOMIC COUNCIL GENE SPERLING, AND FRANKLIN RAINES, DIRECTOR OF THE OFFICE OF MANAGEMENT AND BUDGET

The Briefing Room

2:45 P.M. EDT

MR. MCCURRY: Good afternoon, ladies and gentlemen. I thought in light of the President's decision to exercise his line-item veto authority that it would be good for you to talk to those who can speak knowledgeably about the President's cancellation of 38 projects, saving U.S. taxpayers $287 million.

And the people who can best do that, first, are Gene Sperling, the Assistant to the President for Economic Policy and Chair of the President's National Economic Council, who is here, along with Franklin Raines, the Director of the Office of Management and Budget. Jack Liu is lurking down there. When the questions get too tough for Gene and Frank he's there; and Gordon Adams, who is our PAD for defense and national security matters from OMB is here as well and can help out, too.

So I'll turn it over to both of you. I guess, Gene, why don't we start with you.

MR. SPERLING: As you heard the President announce today, he is, for the second time, using his line item veto authority. This has been something that the President has pushed and supported since he ran for President, and now that it is in law, he is actively using the line item veto. And we should stress that the point and the main purpose and the main savings from the line item veto come not from what you line-item, but from the savings that you get by encouraging fiscal discipline in future bills.

The best bill is one that does not need any line item vetoes, but for the line item veto to have its power as a deterrent effect on unnecessary spending and to be a tool for fiscal discipline, the President has to be willing and is willing to use it when necessary.

As you will see by the list, these line item veto selections was done on a neutral policy criteria. We chose criteria that we thought was appropriate and we let the chips fall where they may. And that is the right policy, right governmental reform approach to take, and we know -- we don't have any question that line item veto is much like entitlements; people tend to support it in the abstract, and it tends to be a bit tougher and more painful in the specific. But if you want to have real fiscal discipline for the future, the President and members of Congress have to be willing to make those tough choices and live by them. And this President has shown for a second time that he is willing to make the tough choices on fiscal discipline with the line item veto in this era where we are at least getting our budget into balance and hopefully surplus.

And with that, I will turn it over to the OMB Director Franklin Raines.

DIRECTOR RAINES: Let me just give you some general background before we take any questions you might have.

As you heard, the President has cancelled 38 projects that were included in the Military Construction Appropriations Act that he signed six days ago. The President originally requested $8.4 billion in military construction in his budget in February. Congress added 145 programs and projects, about $800 million, bringing the total up to $9.2 billion. This decision removes 38 projects and $287 million from that bill.

In making his decisions, I want to emphasize that the President is not substituting his judgment for the judgment of Congress. Indeed, the President has accepted over $500 million of added funds to the request that he made in February and has left 417 projects in the act, including 107 that Congress added.

The fact that Congress had added a project was not sufficient grounds for cancellation. The President exercised these vetoes consistent with the authorities given to him in the line item veto act, and his commitment to orderly defense planning and fiscal discipline.

Let me run through a little more detail for you. The 38 projects that were cancelled were because they didn't meet three important tests. First, none of them were in the President's 1998 budget request for military construction. Second, we verified with the Defense Department that the design work necessary to begin construction on these projects has not started. Each of these projects has zero amount of design actually done, which, therefore, reduces dramatically the possibility that any of these projects could actually be constructed in Fiscal Year 1998. And, third, none of these projects on the list made a substantial contribution to the well-being and quality of life of men and women in the Armed Forces. The President has made a strong commitment to improving family life within -- for our soldiers and is -- continues to be dedicated to that, and he has kept in the bill all of the projects that make such a contribution.

These criteria were tough, but they were also objective. They're not partisan; no decision was made based on political party or location of the project. They also represent the President's commitment to the careful stewardship of the nation's defenses.

The projects in the military construction bill will represent a large and significant military construction program and the cancellations will have no adverse effect on our military capability.

Consistent with his dedication to a strong and capable military, the President has acted in the best interest of the nation by being a careful steward to the funds made available to our Armed Forces.

Let me stop there and answer any questions anyone might have, and Gene as well.

Q You have 12 more appropriations bills to go. Will they all have this kind of scrutiny and do you think the line item veto will be used as extensively, or is this an especially ripe target?

DIRECTOR RAINES: We will review each bill as they come and apply the same amount of scrutiny. Each bill, of course, is different because of the subject matter of the bills, and so each one will have their own unique criteria. And the extent to which the line item veto will be utilized by the President will just depend on what's in the bills.

A number of these bills still have time to be improved and we certainly hope that they will be improved. As Gene said, the best outcome is a bill that the President can sign and there are no line item vetoes.

Q Why was it so significant to the White House that none of the projects would actually get underway in '98? That might suggest that there is additional funding this year for projects that might have been begun already that, in fact, the military doesn't need that the administration would not have requested, but maybe were throwing good money after bad.

DIRECTOR RAINES: Well, in addition to Congress adding projects, they also deleted projects that were included in the requests from the Defense Department for construction this year, so that all of this -- there is priority setting, and it's very important to get our priorities right because we have a limited amount of money.

Ordinarily, a project won't be included by the Defense Department in the budget unless 35 percent of the design work has been completed. In this case, these projects had zero completed, so they would never have qualified in the normal military process to be on the priority list.

Q The President did not veto any items from the states of the Majority Leader and the Appropriations Committee Chairman, but he did line-item items from the states of the Senate Minority Leader and the top Democrat on the Appropriations Committee. Does this mean that the Democrats are more likely to add pork to appropriations bills than Republicans?

DIRECTOR RAINES: No. And, indeed, I don't think you've heard anyone up here talk about pork. These are projects that we're having to make difficult priority decisions about, and the priorities have to be determined because we have a limited amount of funds. And so even worthy projects, projects that may be -- and, indeed, a number of these projects are included in the future year defense plan have to be prioritized.

What this bill does is to disrupt that prioritization. As I mentioned, there was no consideration of geography in the determination on these projects. We developed the criteria and applied them and applied them consistently.

Q How quickly do you foresee a legal challenge?

DIRECTOR RAINES: Who knows? There may be no legal challenge. Indeed, under the leading standing case in this area, Raines v. Byrd --

MR. SPERLING: Frederick Raines.

DIRECTOR RAINES: Fred Raines v. Byrd, different Raines, the Supreme Court made it pretty clear that it's difficult to have standing in this area. But I don't want to speculate on who might be able to get into the courthouse to challenge this.

Q Just to clarify a point, sir, you said that there were 107 proposals that members of Congress had come up with that were left in the package. Is that right?

DIRECTOR RAINES: That's right.

Q The President in here said that, to paraphrase, that it must be up to the Pentagon to make defense decisions. How does leaving -- why did he let these 107 projects stand?

DIRECTOR RAINES: I think you've got to tie together two things the President said: respecting the role of Congress in these endeavors while also respecting the very careful planning process that goes on at the Pentagon. The judgment that the President made was that the 107 projects which are primarily projects that relate to the health and welfare of active duty soldiers, sailors and airmen are high priorities, and that if Congress believe that they should have a somewhat higher priority, that he was willing to acquiesce to their judgment on that.

Q Why are you so reluctant to use the word pork? You said no one up here is using the word pork.

DIRECTOR RAINES: Because as I've examined these projects, I believe that the great majority, if not the overwhelming majority of these projects can make a contribution to our national defense. The only question is, are we doing the projects in any priority order, are we getting things done we need to get done now, or are we instead moving things that don't need to be done for years to today and getting in the way of things we need to do now.

So that I think what you will find is you will find as we find in all appropriations and budget matters, that there are strong merits in many of the projects and it's simply a matter of fiscal discipline to make tough decisions about what you can afford to do now and what you can't.

Q There was a marina dredging project down in Mississippi that was added by Congress. Which one of these criteria did it not meet?

DIRECTOR RAINES: I think you're getting ahead of us. That's in another bill. I'm sure we'll have an opportunity to read that bill, too, when it gets down here.

Q Going back, just to follow up the question on the legal challenge, the first time the President exercised the line item veto, it did not generate the court challenge on constitutionality that we've been waiting for. Do you think that this set of vetoes is more likely to produce that because you've got more cases and there may be more opportunities for people to have standing to sue?

DIRECTOR RAINES: It depends. I think the lawyers would tell you that most of these projects are to happen on military bases and there are no private individuals who have an interest in the activities, individual interests and the activities of the military. And, therefore, for most of these projects it would be difficult for them to establish that they had a personal interest in the outcome of the President's decision.

Q Following up on the Mississippi question, there were two dining halls and a bachelors quarters, though, that were added. So could you answer the question of which of the criteria that those three projects not meet?

DIRECTOR RAINES: Added in which way?

Q Added by Congress to your request.

DIRECTOR RAINES: Well, there were many projects that affected the health and welfare of families that were added. And all of those have been kept in the bill, including the dining hall and barracks -- those are sort of the epitome of the quality of life items we've talked about. There are day care centers that have been added, there was a chapel that was added. All of that the President has preserved in this bill because he believes it does contribute to the quality of life of enlisted people.

Q Mr. Raines, the District of Columbia appropriations bill is headed for the President's desk with several items that have been added by the House Appropriations Committee Chairman, in objection to the D. C. Control Board, D.C. Council and others. Does the President have line item authority over this, and if he does not, would he veto this appropriations bill if it contains these extra items that have been added to the D.C. appropriations bill?

DIRECTOR RAINES: We have said that the bill that has been pending in the Appropriations Committee is objectionable and that the President's senior advisors recommend that it be vetoed if it were to appear on the President's desk in its current form. The bill has provisions that the President has made very clear that he opposes, such as diverting public funds to support private schools. Also the bill is full of micromanagement that we believe will undo the good work that's been done by the adoption of the President's reform plan.

The whole purpose of putting the District government on a sound fiscal basis is to then allow time to proceed to the work of making the government work better. And I, for one, believe that if we go back to a day where Congress or any one subcommittee of Congress believes that it can run the city on a day-to-day basis, it will undermine the prospects for a well-running National Capital, as well as undermine democracy in the District.

Q Were members of Congress consulted at all during the process of deciding which items would be vetoed? And also, which agencies were involved in looking through the bill and deciding what recommendations to make to the President?

DIRECTOR RAINES: The agencies were the White House, obviously, OMB, and the Defense Department where all of the information resided. And I had the opportunity to visit with any number of members of Congress over the last few days -- (laughter) -- on this subject and found it most illuminating and useful in the deliberations.

MR. SPERLING: Washingtonians were not doing their pull on the most popular --

Q A question for Gene Sperling. You have a big fight on Capitol Hill over fast track coming up, and I wonder if you think there's any risk of a spillover effect if you line-item-veto a provision that is of special interest to a member that you're also trying to cultivate for fast track.

MR. SPERLING: People understand that we have -- that the President has made fiscal discipline and getting the budget into balance a major priority, and most members of Congress strongly support that and they understand that that requires tough cuts and sometimes those cuts will affect them. But I don't think that that will affect other important areas like that.

Charlene had a constructive conversation with Chairman Archer today, and we're going to continue to try to work together there. I think the bipartisan support you saw in the Senate Finance Committee certainly shows that it is possible to strike a bipartisan balance on fast track. And, again, Chairman Archer has had a constructive conversation with us today and we're hopeful we'll be able to work something out that will also be able to draw bipartisan support in the House of Representatives.

Q Does the administration support this -- what parts are announced today -- is the administration on board with that yet?

MR. SPERLING: Do you know that he announced something today?

Q Yes -- well, he was scheduled to at 2:00 p.m.

MR. SPERLING: Yes, well, I'm not that dumb. (Laughter.)

THE PRESS: Thank you.

END 3:03 P.M. EDT