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Office of the Press Secretary

For Immediate Release November 14, 1997
                              PRESS BRIEFING
                      CHIEF OF STAFF ERSKINE BOWLES,
                              DOMESTIC POLICY 

The Briefing Room

2:49 P.M. EST

MR. BOWLES: I'm going to talk a little bit about the situation in Iraq and we'll take some questions. I think Gene Sperling and Janet Yellin and the Budget what we have accomplished this year and the events of the last week, and then Sandy is going to come up and talk a little bit about the situation in Iraq, and we'll take some questions. I think Gene Sperling and Janet Yellin and the Budget Director and Elena Kagan are all here to take questions on your behalf.

In thinking about this last year, I thought when I came in a little while ago, I thought of my good friend, Dean Smith back in my beloved North Carolina some of the great teams that he's put together over the years, and I remembered one team he had that went 28 and 4. The team practiced hard, they worked hard together, they accomplished some great results and they got to the Final Four and they lost that last game by two points at the end of the game.

And at the end of that game, the team was disappointed, some of the fans and the critics were disappointed. But I think after the game and after things settled down and they reflected on what had gone on during the entire year, they all decided it was a good year and a year they could be proud of, and they looked forward to keeping the team together and practicing hard and coming back next year and seeing if they could win some of those games and beat some of those teams they lost to during the year just completed.

I think it's fair to say that we did have a good year this year. It was a year of progress and achievement. It's also been a year of true bipartisanship and cooperation, and it's a year in which many of us banded together to prepare our country for the 21st century.

I know a number of you want to talk about the hits and misses that occurred during the last week and I promise you we'll get to those and I'll take those questions, but let me talk about briefly some of the things we have accomplished during the last year.

Back in February, the President laid out a clear, ambitious call to action in his State of the Union Address for the second term, and as the Congress is now adjourning, I think the record is clear that we have accomplished a great deal. I would begin with the accomplishment of achievement of the first bipartisan balanced budget in a generation that will produce real savings in excess of $900 million. That budget was achieved with some real tax cuts for hard-working middle class families at the times when the need it the most, when they're raising their kids to pay for education, when they're buying or selling a home and saving for retirement.

We also achieved the largest increase in education funding in 30 years. We did this by vastly increasing the money that's being made available for early childhood programs to prepare our kids so they're ready to enter school ready to learn, and also through the expansion of the America Reads program and the establishment of high national standards for 4th grade reading and 8th grade math, so that when our kids graduate from high school, they'll graduate with a diploma that means something and also with the availability now of increased Pell Grants and with the tuition tax credit and with the HOPE Scholarships, that additional two years of education will be universally available, which was a goal the President outlined in the State of the Union.

We also came forward this year with the largest increase in health care for children since Medicaid in 1965, making it possible for as many as 5 million additional kids to have health care insurance -- kids that don't have insurance today -- through an unprecedented $24 billion for children's health care. We also were able to get forward and pass some critical long-term entitlement reform by taking out and extracting about $400 billion to $450 billion worth of savings in the Medicare program that extends the life of the Medicare Trust Fund out for 10 years, and we also established a Medicare Commission, which will allow us to address the long-term structural problems associated with Medicare.

Sixth, we were able to pass provisions that will enable us to move 2 million people from welfare to work and also to restore basic health and disability benefits to legal, law-abiding immigrants, something that the President had promised to do prior to the beginning of this year.

We also took concrete steps forward to preserve the environment, to clean up over 500 toxic waste dumps, and with our Brown Field tax initiatives to redevelop 14,000 contaminated sites within our inner cities. We also were able to get through ozone and particulate matter regulations which will go a long ways toward improving the health of our children, and the U.S. came out with a very strong position on global climate change.

On the foreign policy front, I think we also have a great deal that we can be proud of. We did ratify the Chemical Weapons Convention. We were able to extend normal trading relations with China. We strengthened the NATO Partnership for Peace through the signing of the NATO-Russia Founding Act and by offering membership in NATO to Poland, the Czech Republic and Hungary.

We also negotiated the Information and Technology Agreement and the Telecommunications Agreement on shackling over $500 billion in trade in sectors where the U.S. already has a very dominant position, and we launched the Africa Free Trade Initiative.

There are also several areas where we did come up short. While we accomplished a great deal, there were four basic areas that we did not reach the potential that we had hoped to. The first was clearly the renewal of fast track trading authority. We did have strong opposition by some members of the Democratic Party, and we also had opposition from some members of the Republican Party who linked their trade vote to international family planning.

We have had a temporary setback there. We do plan to come back next year, hopefully in February, with a bill that can achieve broader bipartisan support. This is something that the President truly believes is critical to the future economic well-being of this country.

The second area where we fell short was in the passage of real campaign finance reform. The Republican congressional leaders blocked the McCain-Feingold bill from coming to a vote. Thank goodness Senator Tom Daschle, the Minority Leader, was able to extract a pledge from Trent Lott to have a clean up or down vote on this measure before March 6th of 1998, so this is another portion of where we fell short. We'll be able to fight the battle again at the beginning of next year.

Third, we were not able to enact a strong juvenile justice bill, which we had hoped to do this year. However, the President was able to use his executive power to make some progress on this central piece of legislation. Many of you may remember that we were able to issue a directive to all federal agencies requiring child safety locks to be issued with every handgun, and we also reached an agreement with eight major handgun manufacturers to provide child safety locks with each handgun that's sold.

And lastly, just the day before yesterday, we were set back in our efforts to attain funding for U.N. arrears and for the new agreements on barring through the IMF -- again, another area where we plan to go back in early February to meet with the Congress and try to see if we can bring this to a successful conclusion.

I think that summarizes what we were able to achieve, where we felt we fell short, and some of the areas where we did fall short and hope to go back on at the beginning of next year. Sandy is now going to come up and take --

Q How about the nominations that have been set back, Surgeon General and civil rights?

MR. BOWLES: There are a number of nominations which didn't come through -- you just mentioned two -- that we have great concern on. We believe that Mr. Satcher will be confirmed to be the Surgeon General at the early part of next year. We believe that Bill Lann Lee is highly qualified to be Assistant Attorney General for Civil Rights. He certainly has a record of clear integrity. This is a man who has spent his entire life fighting for civil rights. It is someone that the President supports and supports strongly. We believe this man deserves a vote, but I assure you he will be the next Assistant Attorney General for Civil Rights.

Q Without a recess -- are you saying that the recess --

MR. BOWLES: I assure you, he will be the next Assistant Attorney General for Civil Rights.

Q Well, can we make this quantum leap and say there will be? (Laughter.)

MR. BOWLES: Well, we hope he'll get a vote.

Q Mr. Bowles, do you believe that Congress is playing by the rules with all of these appointments?

MR. BOWLES: Well, I think -- you know, yes, they're playing by their own rules. Whether or not we like those rules is another subject. I think the job they have done with Bill Lann Lee is disgraceful. I am deeply disappointed with their effort as it relates to appointing judges. As you know, I have spent my entire life trying to bring people together. I think I am known as a relatively reasonable person with working with both sides, but I think the job they have done with judges and with our Assistant Attorney General for Civil Rights is just plain wrong.

Q What are you going to have to do differently, do you think, to get the fast track passed in the spring?

MR. BOWLES: I think we have to do a number of things. We have already started doing those. We have been reaching out to members of both sides, trying to talk about ways that we can make some modifications in our bill so that we can come forward with a bill that can get broader bipartisan support. We just fell very -- you know, we were very, very close this time and we think we can make the kind of modifications that will allow us to come back and get it passed in February.

Q Even with those modifications --

MR. BOWLES: I would rather spend some time talking with the members of Congress, doing our homework, being properly prepared, going out to the people and generating some additional support in the country, and then come forward a little later on and tell you exactly how we would modify the bill in order to achieve the support we need to get it passed. But it is critical that we get it passed. As you look to the future, one-third of the growth that we have had in the past has come from exports. In the future, world trade is expected to grow at three times the rate of the U.S. economy. Ninety-six percent of the world's customers are not here. We have got to bring down these trade barriers so that we can compete on a level playing field with our competitors in Japan and Europe.

Q Are you going to be around to push it?

Q Dean Smith retired. Are you planning to do the same?

MR. BOWLES: What's that?

Q Dean Smith retired. Are you planning to do the same? Are you going to be here next year?

MR. BOWLES: I am going to be here as long as the President wants me to stay.

Q Erskine, the fast track debate revealed not only some differences of principle over trade between House Democrats and the White House, but there are also a lot of signs of personal resentment and tension and a lot of ill will on their part or feelings that they weren't appreciated here, the larger relationship between House Democrats and the White House is what I'm talking about. How much of a concern is that to you and the President, and is there anything you plan to do about it?

MR. BOWLES: I think some of that has been overblown, John. I think if you look at the votes that we've had this year, whether it is in the balanced budget where we had between two-thirds and three-quarters of the Democrats voting with us, if you even look at the trade issue where it passed with the majority of Democrats in the Senate where it had the support of the majority of governors, the majority of the mayors, if you look at our positions on education, on health care, on welfare to work, on any number of issues, on tobacco, on some of the issues that we will face next year, I think you can see that there is broad consensus among the Democratic Party.

Only in the area of trade, I believe, and I think it is a very distinct area, has there been somewhat of a schism. And what we are going to try to do over the next couple of months is work hard to make sure we bring ourselves together so that we can have a bill that gets broader bipartisan support.

Q Erskine, why weren't you able to at least round up votes in the new Democratic Caucus? It seems of all the Democrats who should have supported free trade, you would have been able to round up all those votes.

MR. BOWLES: Karen, I hope that we can do a better job in rounding up support for it as we go forward. We were able to get about a quarter of the Democratic Caucus to come forward and support it. We hope if we can make some modifications to the bill that it will make it more acceptable to a larger number of Democrats and we can get their support.

Q Erskine, you were talking about the IMF and how you might try and take care of this next year. There are some crises going, however, in Asia that might prevent you from being able to do that. Yesterday they said Capitol Hill estimated it would require about $50 billion to bail out Korea if that becomes necessary. So if they just cut off part of your IMF funding, will that force you to use the currency stability fund?

MR. BOWLES: In the discussions I have had with Secretary Rubin and Deputy Secretary Summers, they feel comfortable that we can manage the problems that we now face and we expect to be able to go back in the first part of the next legislative session and, hopefully, secure the funding for the IMF and, in addition, get the funding that we need for the U.N. arrears. Both of these should have passed this time. I think the fact that they were linked to international family planning just makes no sense whatsoever.

Q Erskine, you said that you are looking to alter the bill that was out there. Are you looking at this point in offering a broader bill or might you do -- what is the likelihood that you do a fast track bill that is more narrowly tailored to a specific idea such as a treaty with Chile?

MR. BOWLES: We haven't made a decision on that yet.

Q Erskine, the President --

Q Back to Bill Lann Lee -- you were saying that he is going to be the next civil rights enforcer and you say unequivocally. But are you kind of fearful -- is the White House fearful that there could be some retaliatory measures from Congress if there is a recess appointment?

MR. BOWLES: This is a matter that the President believes in strongly. He has supported the principle of civil rights his entire career. Bill Lann Lee is somebody who is qualified, who deserves to be Assistant Attorney General for Civil Rights, who will make a great representative for this country, and he should be and he will be.

Q So you're not fearful of congressional retaliation?


Q Erskine, the President started out the year with a very strong call for bipartisanship that prevailed through part of the year -- Bill Lann Lee and so on. Has bipartisanship totally broken down in Congress?

MR. BOWLES: No, and I think there is a good deal of opportunity for additional bipartisan efforts, whether it's in the international area or whether it's on selected domestic issues.

When we can put together a bipartisan coalition, we want to do that. We think that's in the best interest of the American people. They want to see us get things done and not just talk about things. I think if you look at that laundry list of issues that I went through, whether it was achievement of some real fiscal responsibility in this country, whether it was in the area of education, whether it was in the area of environment, whether it was in the area of moving people from welfare to work, tax relief for middle class families, there was broad bipartisan support for each one of those, and we worked hard to achieve that.

Q When your appearance was billed here, we were told that you were also going to project what the President would be seeking in the future. In addition, I suppose, to fast track, are there any new initiatives?

MR. BOWLES: I think there are a number of things that you can expect to see us working on as we go forward. First, we do want to make sure that we do open up markets for U.S. goods, so we will come back with some fast track legislation. Secondly, we are going to work again to have some real campaign finance reform. Thirdly, we will work again to pass a strong juvenile justice bill. We do want to secure the U.N. arrearages into funding for the IMF.

In the area of new things that we'll be exploring, I think you will look at us trying to advance our education agenda, stressing the importance of high national standards and infrastructure needs that our schools face today. I think you'll see us working on a consumer bill of rights. You'll see us very active with the tobacco legislation. I think you'll see us moving forward with health care and pension portability, child care initiatives, reforming the Medicare and Social Security needs of this country and trying to solve a structural long-term areas of -- let me bring Sandy up because he's got to leave in just a minute, to talk to you a little bit about --

Q Reform of the tax code -- you know, are you settled?

MR. BERGER: Are there any questions? I have a long statement here about accomplishments in the foreign policy area, but let me answer some questions.

Q Sandy, one thing. With the President's diplomacy, is it your sense that the problem here and that what the President and the administration has to do is convince everybody else in the world that Saddam is as big a threat as you apparently believe he is?

MR. BERGER: No, I think the international community has spoken quite clearly over the last two days. And First, the U.N. Security Council resolution, than last night in the unanimous statement after he decided to throw out the Americans -- UNSCOM inspectors -- indeed, in practical effect, all of the inspectors. So I think there is a clear base of understanding in the international community that this is a threat, that he has the -- certainly has demonstrated the intent to use these weapons, and if he has an unfettered capacity to do so, it's a threat not only to his neighbors but to the world. And we are now engaged in talking, consulting with our allies and friends on how we intensify the pressure on Saddam Hussein to get the same message.

Q Well, isn't there disagreement, though, on how much pressure should be exercised and whether or not it's worth going all the way?

MR. BERGER: I think there is a clear feeling on the part of the international community that this is a threat, this is a serious matter, that this poses a risk to the region and a risk to the world, and I'm not going to speculate on where -- what steps may proceed.

Q The military moves are fairly obvious for us to gauge. They say we're moving a second carrier in. The diplomatic moves are harder for us to ascertain. Can you tell us what it is that precisely that you're trying to accomplish, what the Secretary of State is trying to accomplish, what the President is trying to accomplish, when we call France or Russia or Great Britain or whomever?

MR. BERGER: We are consulting with our allies on how we intensify the pressure on Saddam Hussein and what should take place if he doesn't reverse himself.

Q Sandy, is it a concern that everything that can be done to Saddam has been done? He's lived through sanctions for six and a half years, we've hit him repeatedly with air strikes, and none of this has done much good.

MR. BERGER: Well, I think that's -- I'm not sure I accept that judgment. The fact is that Saddam has been kept in a box, in a sense, for this six-year period. The sanctions, which are the most pervasive sanctions every imposed on a nation in the history of mankind, have cost his country $100 billion. Now, every year or so, Saddam Hussein tries to break out of that containment box, either by moving toward the south as he's done in some instances, moving in the north as he's done in other instances; in this case, throwing out the international inspectors. And what the international community has to do is to be, once again, absolutely clear and firm that is not acceptable behavior -- that he remains a threat and the only way out for him is to come into compliance.

Q But if I can follow up on that, the point of the question is, there isn't much more we could do at this point.

MR. BERGER: Well, I think that we have, as I said before, we have maintained for six years, since the end of the Gulf War, we have kept Saddam Hussein contained. We have done an enormous amount to destroy his weapons of mass destruction through UNSCOM. We have stopped him when he has tried to move again towards Kuwait. And I think we have to -- this is going to be a long-term enterprise on the part of the international community to assure that he does not, once again, become a threat to his neighbors or a threat to the region or a threat to his own people.

Q Is it long-term U.S. policy -- not U.N. policy, but U.S. policy -- to see Saddam removed from power, and is there any possibility of using this current crisis to achieve some more long-term resolutions so that we don't have this sort of episodic annual round of crises?

MR. BERGER: Well, it is American policy to assure that the very least he is not a threat to his neighbors or a threat to his own people. That policy has more or less been successful over the last six years. And I think we have to be prepared when he tries, as he has in a very insidious way in this case to break out of that box to make it very clear that is not something that we'll tolerate.

Q Just to follow up on John's question. Did the President intend to kind of move the goalposts this morning when he said that the sanctions will be kept in place as long as Saddam is in power, as long as he lasts, as he put it? Is it his opinion that the sanctions will not be lifted ever as long as Saddam is in power, whatever he does, even if he were to comply?

MR. BERGER: Let Saddam Hussein come into compliance, and then we can discuss whether there are any circumstances.

Q But, Sandy, for the record, can you say from this podium that if he were --

MR. BERGER: It has been our position consistently that Saddam Hussein has to comply with all of the relevant Security Council resolutions for the sanctions.

Q But can you say for the record, that were he to comply -- I know that the point is moot for you at this point, but were he to comply with the sanctions, the U.S. would not block the U.N. from lifting the sanctions?

MR. BERGER: I don't think under these circumstances, when he is blatantly out of compliance it is the right time for us to talk about how we lift the sanctions. We're not going to negotiate lifting the sanctions at a time when he is in blatant disregard, not only of the sanctions, but also of the Security Council resolutions.

Q It's not a matter of negotiating, it's a point that we're asserting what is in the resolution. They said that if he complies -- that he has complied, the sanctions would be lifted. Is it the U.S. position right now that they would be lifted, or would you oppose such a move?

MR. BERGER: It has been the U.S. position since the Bush administration that Saddam Hussein has to comply with all of the relevant Security Council resolutions.

Q Not to belabor a quote, but what the President said is what he has just done is to ensure that the sanctions will be there until the end of time, or as long as he lasts.

MR. BERGER: Well, that's right. That's not inconsistent with what I've said. In other words, there's no way --if he's got to be in compliance, he can't be in compliance if he's thrown the UNSCOM people out. So it's a necessary condition; it may not be a sufficient condition.

He certainly cannot come into compliance when he's thrown the U.N. inspectors out. And as long as they're out, there's no way we can have an argument about whether he's in compliance.

Q As the President's National Security Advisor, how concerned are you and how concerned ought the American people be about the fact that we are now, for all intents and purposes, blind in Iraq to what he can do with those weapons of mass destruction?

MR. BERGER: Let me put it this way. I don't believe that he can redo -- the UNSCOM inspectors have been extraordinarily successful over the last six years, and a large portion of Saddam's weapons of mass destruction have been identified and destroyed. I don't believe that he can redo in a few weeks what UNSCOM has destroyed over six years. But certainly, left to his own devices over a long period of time without international inspection, it is a danger.

Q Sandy, could you reassure the public that the United States has the intelligence and the military capacity to destroy Iraq's ability to deliver weapons of mass destruction, or are we limited in what we can do even if we wanted to?

MR. BERGER: I don't think it's appropriate for me to talk about what our military capacity is or not. I think that's a mistake.

Q Sandy, have you made any headway with --

Q What would the justification be -- Mike McCurry said again here today that although you and the President, Madeleine Albright are all working trying to get support from allies, support from the U.N., if necessary, the President could act unilaterally and he could do so legally? Can you explain that? Would it be because any nation has a right to protect itself and could the President argue that Saddam Hussein is a threat to the United States?

MR. BERGER: There is a body of U.N. Security Council resolutions that go back for six years which, our view, confers all the authority that we would need. But obviously, it is our first preference to resolve this without -- by diplomacy and peaceful means, and that's what we are engaged in over the next several days in terms of trying to work with our allies, some of whom have more contact with Saddam Hussein than we do, to make it clear that the international community is resolute with respect to this breach.

Q How can the French government make itself useful to the international effort at this point? What would you like to see from Paris?

MR. BERGER: I think the government of France, as other governments, need to convey -- hopefully will convey and I believe have conveyed to Saddam Hussein that he is totally outside the realm of any kind of acceptability from the international community when he throws out these inspectors, and that the only way that he can get back into any kind of dialogue with the international community is by coming back -- by allowing those inspectors back.

MR. TOIV: We still have Gene Sperling, Frank Raines, Janet Yellin and Elena Kagan here to answer any further questions about the year-end report.

MR. MCCURRY: Why don't you all come up?

Q How are you coming along in preparing the budget for the next --

DIRECTOR RAINES: We are in the process now of reviewing the proposals from the agencies and the President will be making his decisions in December for the 1999 budget.

Let me say one thing in following up what Erskine said. The President presented his budget in February. Since that time, 15 very important bills have passed to implement that budget: the tax cut bill, the balanced budget bill and 13 appropriations bills. And just as the President said, that his plan presented in February would lead us to a balanced budget, indeed, it will lead us to a balanced budget, and just as he said that it would implement his priorities, indeed, through that, those 15 bills that Congress has enacted on a bipartisan basis, the President's program has, in fact, been enacted whether you look at education, or you look at the support for families in raising their kids, or if you look at the environment, you will see that the President's program has been enacted.

The important part of this isn't simply that we said so in February, but if you look one year ago, one year ago, the conventional wisdom was that the struggle with the Republican Majority where we were so far apart on priorities, would inevitably lead to a clash and no results. And if it didn't lead to a clash, it would lead to the President having to retreat from his priorities and principles.

But if you match up the President's budget and the Republican plan of last year to what has actually happened, case after case, what the President has proposed has actually been enacted into law, so we're no longer at the stage of speculating as to whether or not we could achieve this. In fact, through the enactment of 15 separate bills, the President's plan is now the law of the land.

Q Speaker Gingrich yesterday said he wouldn't be surprised if the President embraces eliminating the marriage tax penalty. Given the White House is looking at the budget surplus and ways in which perhaps the tax code could be changed, is that one option that you're entertaining?

DIRECTOR RAINES: As all of us have tried to say, that we don't want to spend a surplus before its time, so we would prefer to see any surplus arrive before we had conclusions on how to spend it. But we are looking, as part of this policy process -- and this is the National Economic Council as well as OMB and the Council of Economic Advisors -- at a broad range of policy initiatives that the President can address in his State of the Union Address and in his budget. And so we're looking at a broad range of things, and I think that just as people were impressed by the array of proposals that he made this last January, I think they'll be impressed by his state of the union speech this coming January.

Q -- issue in terms of tax fairness?

DIRECTOR RAINES: Well, there are a lot of issues in our tax system that the President has spoken to. We have managed to deal with several of them in terms of the incentives in the tax system for education and for raising kids. But there are issues of tax equity that he is quite concerned about, and he has asked all of us to look at those issues as well as the issues of long-term entitlements to see what kinds of proposals we can make now to move closer to resolution on those issues.

Q When do you submit the budget?

DIRECTOR RAINES: First week of February.

Q You all are here for a reason, I wonder if I could get somebody -- Mr. Raines or Gene to simply deal with this unspoke, unasked, but answer a lame duck question straight up, because that's what this is all about, I assume. What's your impression of those assessments? The fast track signaled the end of all this success. Now we're into a different kind of a period.

DIRECTOR RAINES: Well, I'm sort of the new guy here, but I remember when I was appointed to this office people asked me why are you going in there. This was last April. And they said he's a lame duck, isn't he? The President -- we've got a Republican Congress -- how in the world can anything happen.

I would just hold up the last year as testament that anytime anyone calls this President a lame duck, he seems to have a very good following year; so I'm not concerned about that. We have an enormous -- an enormous opportunity to pursue the President's program, and I expect we'll be as successful in this coming year as we were in the last year.

This past year has probably been the largest change in fiscal and domestic economic policy that we've seen in 30 years. And we're seeing the results in the economy that continues to grow and produce jobs at low inflation. We're seeing the results in improved fiscal policy, lower deficits. I think we couldn't have seen a better year and I expect that we'll continue to see one. This is an opportunity for this entire administration to continue to produce. Indeed, I think if we focus on the 15 bills that I mentioned -- and there could be another 15 I could have mentioned that are not appropriations bills -- you would see this is one of the most productive sessions of Congress that we've had in a long time.

Q And you're staying on?

DIRECTOR RAINES: Me? Oh, absolutely. What else would you do other than be OMB Director?

Q Well, there are so many rumors every other day that you're leaving.

DIRECTOR RAINES: Me? No. I think you -- you're confusing me with somebody else.

Q No. I know you. (Laughter.)

DIRECTOR RAINES: No, no, no. I have -- the OMB troops are here. We're going to produce the President's budget, and we'll be here to give you all these wonderful briefings in the future.

Q Oh, God. (Laughter.)

Q I have a question for Gene or for Janet, which is about Korea, whether or not you're watching what's going on in Korea, and whether or not the U.S. will participate in any sort of bailout funds for Korea?

MR. SPERLING: Obviously, we're always watching, particularly the Treasury Department, and obviously Deputy Secretary Summers is going to Manila as part of the deputy finance ministers. So, it's never -- we're always watching and it almost never does any good to say anything -- speculate or say anything about these situations.

Q Did the cutoff of the IMF funding create a problem for the administration in participating in discussions --

MR. SPERLING: I think Erskine's already answered it, so --

Q Gene, you're close to a lot of House Democrats. Is it your sense that some of the problems are related or isolated strictly to the issue of trade, or are there broader concerns in the relationship that the White House should be moving to correct?

MR. SPERLING: I think trade in the House is always going to be a tough issue. And I think that it was always going to be difficult. There were real differences of opinion, and I don't think they have much to do with the timing of the President's term or anything else. That was always going to be a tough battle. I think that there are plenty of things that are going to unite Democrats going forward. I think, certainly, education, certainly children's issues, including child care; certainly tobacco. So I think that there will be -- I think you'll see Democrats fighting together on many fronts, but as Erskine said, when we -- in order to get something done, you ultimately have to be able to work in a bipartisan way, and whenever we see that opportunity, our goals to -- we're going to try to do that.

Q On the issue of fairness as it relates to entitlement reform, I guess this is directed to the OMB Director, again. Are you speaking in terms of perhaps means testing Medicare or something along that line if you're concerned about future solvency and how to address that issue?

DIRECTOR RAINES: Well, as you know, we have had -- we had discussion in the balanced budget negotiations about the structure of Medicare and in that case, there were discussions about how the premiums might be adjusted for those with the highest income. And those did not happen as part of that reform, although we did manage to extend the life of the Medicare system for 10 to 12 years. We are going to be appointing a Medicare commission next month, and these issues will be on their agenda for them to make recommendations to the President and Congress.

MR. TOIV: Just one last thing. The President has signed into law -- Frank you'll be interest to hear this -- the President has signed into law the sixth and final continuing resolution for fiscal year 1998.

Q How far does that go?

MR. TOIV: This extends to the 26th of November. This gives the Congress enough time to process the bills and get them over here and gives the White House enough time to review the bills before the President acts on them. And that's it.

THE PRESS: Thank you.

END 3:36 P.M. EST