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THE WHITE HOUSE

                      Office of the Press Secretary
                       (Philadelphia, Pennsylvania)
________________________________________________________________________
For Immediate Release                                  February 13, 1998

                            PRESS BRIEFING BY
         DIRECTOR OF THE OFFICE OF NATIONAL DRUG CONTROL POLICY,
                         GENERAL BARRY MCCAFFREY
                AND ELENA KAGAN, DOMESTIC POLICY COUNCIL

Philadelphia Marriott

Philadelphia, Pennsylvania

1:34 P.M. EST

MR. LOCKHART: Hello, everybody. Can you hear me in the back? Before I take any questions, we're going to do a couple of things first.

Tomorrow's radio address will focus on the President's new drug strategy, and General McCaffrey is here today to talk to you a little bit about that. This briefing will be non-embargoed, you're free to use this any time. There will also be some things in the radio address tomorrow that we're going to hold until tomorrow, so there will be some new stuff there and he will not be able to talk about that until later.

Q Can I just suggest -- can he talk about the embargoed --

MR. LOCKHART: Let's do this, let's get through this part and if there's any interest we can work something out. What we've handed out is releasable now. After that, I've got Elena Kagan, from the Domestic Policy Council, who is here and available if you have any questions on the study the President talked about today, from Treasury. And then I'll be there if there's any other subjects that interest you.

General McCaffrey.

GENERAL MCCAFFREY: Very quickly, let me run through -- and I guess this is a change that it's not embargoed -- what the President will put in front of the American people tomorrow at 10:06 a.m. And at 11:00 a.m. I'm going to try and bring together part of the interagency team -- Justice, Treasury, Health and Human Services, Education -- and respond to people's questions in Washington.

There's three documents I'll show you, and a fourth you need to know about. The first document is the National Drug Strategy, and that's what the President will refer to. It is comprehensive. He will underscore that it's a 10-year perspective. He'll talk about -- in his radio address he'll try and bring life to this by talking about the programs that give this meaning.

We think this is the blueprint for what we're going to try and accomplish. And we have told the Congress -- and I would suggest to you that what you need to do is hold us accountable by seeing if what we do in the next three years supports the strategy. So that's the most important thing I'd put in front of you to consider -- the strategy is what we're trying to achieve, reasonably short, well written, based on expert input and we think finds wide acceptance.

There's a second document you need to know about: The National Drug Control Strategy Budget Summary. This is the '99 document, but it has also got a five-year projection for the first time in our history. Frank Raines and I worked with each of the Cabinet Secretaries over the last six months in particular, and hammered out a drug budget which went to the Hill -- the President sent this over to the Hill a couple weeks ago -- that is $17.1 billion. It was $16 billion last year. It was $15.4 billion the year before that. The bottom line has increased significantly in each of those budget years, and the '99 budget continues it. There has been a disproportionate investment of new money in the prevention of drug use by young Americans and in the treatment of drug addiction among the 4 million chronically addicted.

And then, finally, this budget I think is pretty significant, starts to effectively link the drug treatment community and the criminal justice community. So there's a lot of information in here about how Janet Reno will try and use a drug court system and something called "breaking the cycle," which is a step beyond drug court, which is really a diversion program, first-time offender, non-violent offender. And now we're getting into a concept we tested last year -- the President now funded it -- which was mandatory drug test for arrestees, followed by mandatory treatment both in prison and follow-on.

And I'd be glad to respond to your questions. But this budget is a 6.8-percent increase over last year and is a 15-percent increase in those programs aimed at young Americans. So inexorably, the resources are starting to come into line with a front-loaded strategy based on prevention and treatment linked to criminal justice.

Here's a new document. We won't have it printed. It's interagency approved. We've given you the cover sheet and the outline. It's called the Performance Measures of Effectiveness. The President will talk about this in his radio address tomorrow. It's a 141-page document. It's the first time we've done it. It attempts to set out for this strategy and for long-term budgeting where we say we're going. And so what you'll find if you look at the summary I gave you is 12 outcome targets that we say we're going to try and achieve over the next 10 years. We've broken it down into halfway mark, five-year targets.

And then in the coming year, what we've told -- Frank Raines and I and Erskine Bowles have told the interagency, you must now in the coming year create annual targets to get at the end of 10 years to a reduction of drug abuse among the American population, down to 3 percent from it's current 6 percent. If we can get to 3 percent, we will have achieved the lowest rates of drug abuse in our society in our modern recorded history.

We think these performance measures of effectiveness are coherent. There are 82 subordinate targets, so if you're in a state or local government, if you're a private association, if you're a foreign government or if you're a federal agency, you can see what is it your effort supposedly is going to be held accountable for, where are we trying to go.

Finally, I think all of you have in there two documents. One is a summary of the strategy. It's an outline that I'm putting on the fax at 10:00 a.m. tomorrow. And the second document, we tried to bring together a compilation of where do we think we are in sort of a broad gauge way today in America on drug abuse. Are we winning, losing; are things getting better; is any of this organizational effort and money having an impact. And we put on one piece of paper an attempt to define what we say the evidence seems to suggest.

And I would argue the evidence seems to suggest that in a 15-year context, drug abuse is down markedly; that in the short-term, the last five years we've suffered a reversal in which there have been dramatically increasing rates of drug abuse and new drugs among young people; and that last year there is substantial reason to believe that we have made the beginnings of significant progress in reducing drug use by young Americans and by reducing the supply of drugs, particularly cocaine, in the international market.

So that's where we are and I'd be glad to answer your questions -- or go get a sandwich. (Laughter.)

Q Are you getting into a kind of a strange situation where you need the revenues from the cigarette tax to pay for some of these health programs that are in the State of the Union, and therefore, if the cigarette companies do well you'll have more tax revenues to pay for these programs, which is against the stated purpose of the higher tax?

GENERAL MCCAFFREY: You know, I probably ought to ask OMB about this. But I'm almost sure there is no linkage at all between the cigarette tax and that whole issue and the $17.1 billion that the President and Frank Raines put in front of Congress. So our programs aren't linked. These are requests for federal appropriated monies in nine separate appropriations bills, which I think will have pretty broad gauge bipartisan support. But this isn't a tax related deal.

Q General, this school initiative, what are you doing that the DARE program is not doing? They are in 75 percent of the nation's schools already.

GENERAL MCCAFFREY: Well, the DARE program we are absolutely supportive of. As some of you may know, it's the biggest drug prevention program in the world -- 26 million American children and an additional 7 million in foreign countries. It's primarily targeted at 5th and 6th graders. And it does a pretty good piece of work we think.

Now, at the same time, the drug prevention efforts -- if I go to a school and ask, what are you doing on drug prevention, the answer is, the DARE program in the 5th and 6th grade and then an annual lecture to the high school seniors about your brain on drugs. That's inadequate. So Donna Shalala and Dr. Alan Leshner -- and I and others believe you need to have a consistent antidrug message from kindergarten through the 12th grade that is appropriate for the young people you're talking to.

So one of the things in here that Dick Riley and I are most proud of is a new initiative. It's a modest initial investment of $50 million to go hire 1,300 drug prevention experts, and to influence out of that some 6,000-plus middle schools around the country. We said that principals have to have access not to somebody who will come in and do the teaching, but someone who has the database, who does have and understands the National Institute of Drug Prevention guidelines.

And so those are the kinds of things that Dick Riley is trying to move forward in the education area. We've got a five-page budget summary in there for you which gives some of the program elements that are there. DARE's a very narrowly based school prevention program in the 5th and 6th grade.

Q General, realistically, how achievable are these goals that he's going to announce tomorrow and what do you feel are the real keys to reaching them?

GENERAL MCCAFFREY: Well, you know, that's been a part of the debate over the last 90 days. Tremendous levels of anxiety in putting on the table performance measures of effectiveness and committing ourselves in the coming year to changing 10-year goals into annual goals. And not just 12 broad ones, but then demonstrating internally what are the 82 intermediate steps.

Now, I think we ought to have a sense of humility about these performance measures of effectiveness. By the end of next year we may have a better assessment on which ones accurately describe the behavior we're seeking to achieve. In some cases, we may end up measuring the wrong thing because it was easier to measure. Another case is we may not achieve some of these goals; then we may want to revise the program as opposed to saying the goal is unachievable.

I would argue straight up -- and this has been part of the debate over the last several weeks -- that it is in my own mind clearly achievable to reduce drug abuse and its consequences in America dramatically -- not to a drug-free America, but over the next decade to take it down to historically more normal levels of drug abuse. There's 269 million of us; right now 4.1 million of us are chronic, compulsive drug users. And it seems to me, with rational drug policy that is hooked appropriately into rational law enforcement policy, with cooperation with the international community, that over time we can achieve these goals.

So I'm extremely positive that these are real programs and that it will pay off.

Q And the second part of the question was, how? What are the keys to achieving the goals --

GENERAL MCCAFFREY: Well, the central pillar of the President's drug strategy -- and I normally cite Columbia University Center for Alcohol and Substance Abuse data. We're pretty well persuaded through almost overwhelmingly mathematical statistical correlation data that if you can get a young American from about the age of nine through probably 19, and they don't smoke cigarettes, abuse alcohol or smoke pot -- those are the three big destructive behaviors -- then the likelihood of them joining this smaller number of 13 million abusers of illegal drugs is remote.

If they do those behaviors, it isn't a demonstrated causal linkage that they will end up in that group, but the probabilities skyrocket. So if you get a 19-year-old son or daughter and you look them in the eye, they're not smoking cigarettes, they're not abusive of beer or wine, and they're not smoking pot, they're probably home free. They won't ever be among that incredibly sad and self-destructive group of us who are compulsive drug users.

Q Why do you pick 2007 as the goal?

GENERAL MCCAFFREY: An awful lot of the people I listen to and who I find enormously credible -- let me give you a couple of names of people that I listen to: Dr. Aphram Goldstein, Professor Emeritus of Pharmacology at Stanford University, is one who I normally cite as having shaped my own thinking.

This is a generational challenge. You've got to grab each generation of kids who are perfectly okay in the 5th and 6th grade -- we've got to remind ourselves, if you take the whole age population, 11-17, 80 percent of them have never touched an illegal drug. And they come out of the 6th grade where they start seeing a lot of drugs in America and they're still not using them. In those middle school years they're exposed to drugs, and if there is a series of prevention factors there, they don't use them. And to the extent that they're at risk, if they're a vulnerable adolescent, they start using them.

So the bottom line is you've got to focus on young people. You've got to keep them away from what -- another source I would cite is these wonderful people in National Institutes of Health, particularly the ones down at Johns Hopkins, where now we have enough science so we understand that these aren't shapeless social behaviors, these are neuro-chemical changes in brain functioning. You can take a picture of the brain which is rewired with cocaine use and you can watch its glucose metabolic activity, and it's different from a normal brain function.

That's what we're trying to do. Don't get people exposed and involved in cocaine. Don't get them exposed and involved in poly-drug abuse. And if you can do that and get them into their adult years, they're home free.

Q Your figures show a drop in cocaine production in the Andean region by 100 tons from the previous year, in '97. What do you attribute that to?

GENERAL MCCAFFREY: Well, this is one of the unexpected surprises of my life. This is -- let me give you three observations on it. The first one is there has been a 40-percent drop in cocaine production in Peru, period. That's unmistakable. That's satellite data -- actually, I shouldn't say cocaine -- of coca -- under production. It's a 40-percent reduction.

It was an 18-percent reduction this year; 21 percent last year. You can see them moving off the line. They're moving to alternative economic development. Now, that's a function of a lot of things -- some smart alternative economic policies by President Fujimori. It is clearly also a function of the air-bridge interdiction operation between Peru and Colombia, which has been going on for a little over two years and which I was privileged to take part in when I was a CINC SOUTHCOM.

There's also been for the first time in 8 years an actual net reduction in coca production in Bolivia. I mean, we've gone 7 years in a row, slight increase each year, nothing appeared to work. This last year the government, the Vice President -- that team actually had a 5-percent net reduction in coca.

And then, finally, the bad news is there was a rather dramatic 18-percent increase in coca production in Colombia. Poor Colombia. It's exploding down in the southern regions -- even though they achieved their eradication goals that we shaped with them.

But if you add them all together, if you -- all the CIA data together, for the first time we've seen a net reduction in cocaine.

Q You said that was 40 percent in Peru over two years?

GENERAL MCCAFFREY: Forty percent over the last two years -- 18 percent last year, 21 percent the year prior to that. Bolivia, the first year we had a net reduction of about 5 percent. And poor Colombia is up about 18 percent.

Q Would you evaluate Mexico's efforts to combat drug trafficking?

GENERAL MCCAFFREY: Of course, we've done that throughout the year. I don't have in your packet -- I should have provided you a copy of the Joint U.S.-Mexico Drug Strategy we just put out. We've been working on that since last May, when the two Presidents in Mexico City told us to -- we'd finished the joint threat assessment; go give us a joint strategy. So we've got a joint strategy on the table.

We have some pretty significant cooperation in the areas of money laundering, precursor chemical control, new legal authorities on the part of the Mexicans passed by their Congress including some that required constitutional revision. We are assisting in the training of non-corrupt Mexican law enforcement institutions. Mr. Mariano Aron (sp), the head of -- new head of their new drug police, now has several hundred law enforcement officers, most of whom have been trained in the United States by the FBI and DEA. And the Mexicans have polygraphed them and drug-tested them. And there is significant cooperation between the U.S. Coast Guard and the Mexican Navy with major seizures both at sea and on land. Mexican cocaine seizures have gone up dramatically, higher than in several years.

Now, having said that, Mexico is under major internal attack, violence and corruption driven by international criminal organizations of a tremendous veracity and cunning. Although they've arrested some of their mid-level cartel leadership and driven others into hiding, it's still a very serious situation. And I might add that occurs on both sides of the border. One of the data points I would offer for you to consider is last year on the U.S.-Mexican border, U.S. law enforcement were subject to 222 violent incidents driven by drug crime. So it's a dangerous environment in both countries.

Q Is this $17 billion just a one-year figure?

GENERAL MCCAFFREY: That $17.1 billion is the FY '99 budget the President and Frank Raines and I proposed to Congress -- a substantial amount of money. And then if you look internally, what we're offering is the notion that you've got to invest up front in prevention -- you know, we've got $36 billion federal, state and local prison operation going on in the United States -- $36 billion, with 1.7 million men and women behind bars. Half of them I think are there for a drug-related reason.

So the argument we have made is, you've got to get up front with prevention and grind down the number of drug users. And then Janet Reno and Donna Shalala and I are trying to sort out how do you focus the significant amounts of drug treatment dollars and hook them into the criminal justice system. That's where we're going. If we don't do that we'll continue to be overwhelmed by a problem that is fairly described as costing us $70 billion a year. That's the size of the problem.

Okay. Thank you.

MR. LOCKHART: Before I take any questions, Elena Kagan traveled up with us today. As many of you know, she, along with Bruce Reed and Donna Shalala has been very involved in developing our work on the comprehensive tobacco settlement.

She can answer some questions now about the study that the President talked about, done by the Department of Treasury, that indicates that you will have well over a million kids prevented from smoking by the price rise that's talked about in one of the President's principles.

Elena.

MS. KAGAN: Well, as many of you have heard before, there are 3 million teenagers who smoke cigarettes on a daily basis in the United States. About 1 million of those will die prematurely as a result. And reducing youth smoking, we all know, is the best way to reduce the overall incidents of smoking, because about 90 percent of adult daily smokers first begin to smoke cigarettes as teenagers.

So what the President did today is something that you will hear him do many times over the next weeks and months, which is to call on Congress to pass comprehensive tobacco legislation that meets the five principles that he set out last fall. And those principles are to put together, put a plan into place to reduce youth smoking; to give the FDA full jurisdiction over tobacco products; to change the way the tobacco industry does business; to make progress toward other public health goals and to protect tobacco farmers and their communities.

And in particular, what the President will call on Congress to do is to pass legislation that will be really a multifaceted approach to reducing youth smoking in America -- an approach that combines significant per-pack price increases with tough penalties, with access and advertising restrictions. All of those are necessary in order to produce a truly significant decline in youth smoking.

Now, what the Treasury analysis that the President mentioned today states is the following: first, that if Congress passes the kind of comprehensive plan that the President has called for, a plan that combines access and marketing restrictions with a significant per-pack price increase -- and our budget calls for a per-pack price increase of $110 over five years and that's the number we used in this Treasury analysis -- if those things are combined, then the result will be a 39 to 46 percent reduction in underage teen smoking in 2003.

That will mean, as the President said in his speech, that in the year 2003 alone between 1.4 and 1.7 million fewer underage teenagers will smoke. And cumulatively over the next five years, between 2.4 and 2.8 million young people will be kept from smoking.

Now, because the premature -- because the number of premature deaths from smoking is about a third of the actual smokers, if you keep up to 2.8 million teens from smoking over the next five years then what you do is you prevent almost a million premature deaths from smoking. And that's the conclusion of the Treasury report.

Now, the way the Treasury report works is it takes into account both price effects and non-price effects. That is, it considers both the decline in youth smoking from a per-pack price increase and it considers the decline in youth smoking from restrictions on access and restrictions on marketing.

The way the Treasury analysis goes is it first considers what kind of non-price effects there will be from the sort of marketing and access restrictions that the President has called for. And it concludes -- and this is an extremely conservative estimate -- that the decline in youth smoking from those kinds of marketing and access restrictions will be between 10 percent and 20 percent.

The Treasury analysis then looks at the remaining 80 to 90 percent and applies an analysis relating to price effects. What Treasury concludes is that when you are talking about young people, for every 10-percent increase in price there is a 7-percent decline in consumption.

Now, as the price increases mount, the consumption decreases gets smaller and smaller because as the price increases mount, the remaining smokers get less and less responsive to price increases. So that overall, overall, the $1.10 per pack price increase that the budget contemplates, which is about a 55-percent increase in the price of a pack of cigarettes, will lead to about a 32-percent decline in youth consumption.

And when you put that, overlay that on the effects of marketing and advertising restrictions, you come up with Treasury's total number, which is, as I said, that in the year 2003, if the President's comprehensive plan is adopted, you will see up to a 46 percent -- and more specifically between a 39 and 46-percent reduction in under age teen smoking.

Now, what the President said today and what he is going to say consistently to Congress is that we do have to pass comprehensive legislation. We have to pass legislation that puts all these things into play -- that significantly raises the price of a pack of cigarettes and imposes restrictions on access and advertising. And in the event that that still doesn't work to meet our youth's smoking goals, imposes tough penalties on manufacturers.

All of those are necessary. They all reinforce each other. The President does not want Congress to pass piecemeal legislation that does only one of those things that, you know, for example, imposes only access and marketing restrictions and fails to raise the price of a pack of cigarettes substantially. So the President again is going to be -- state very clearly and probably very repeatedly, that you have to do this all together. You have to enact legislation that is comprehensive.

Q In order to have those advertising restrictions, do you have to have the industry on board? And if so, to have the industry on board, do you have to have caps on liability?

MS. KAGAN: We believe that many of the advertising restrictions can be put into place with or without the consent of the industry. As you know, the FDA rule itself imposed several advertising restrictions that we have fought for in court and that we continue to believe are fully constitutional.

There are other marketing restrictions that have been suggested by some, including in the June 20th settlement, where the constitutional analysis becomes more difficult. I'm not going to make any conclusions about that. The Justice Department would have my head if I did. But there are substantial marketing restrictions that we believe you can put into place with or without the consent of the industry.

Q Elena, the President has talked before about a $1.50 pack increase over 10 years. When did $1.10 become the interim --

MS. KAGAN: Well, $1.10 is from the budget window, which is five years, so what we --

Q Has that been set at $1.10 for a long time, or is that --

MS. KAGAN: From the budget. What we did when we put our budget was we estimated the amount of revenues that would come from Congress' passage of comprehensive tobacco legislation of the kind that we've called for. And because the President called for $1.50 over 10 years in order to meet the youth smoking goals that he has set up, when we had a five-year budget window to work on we put it on a kind of trajectory. And by the fifth year, 2003, it will be $1.10. That's in real terms; in nominal terms it's about $1.24.

Q What is the cigarette tax now?

MS. KAGAN: I don't know. Let me check.

Q Have you looked at the Jeffords bill yet, and what did you think of it?

MS. KAGAN: We think that we can work productively with Senator Jeffords and we're looking forward to that. We think that right now the bill does not give the FDA the authority that it needs to regulate tobacco products. We think that it doesn't give FDA the sort of flexibility that the current scheme does. So we think that we will have to make a lot of progress on those provisions of the Jeffords bill to make it acceptable to us.

Q Elena, why is it responsible for the President to demand this outcome without explaining to the American people how he wants to get there specifically? I mean, what kind of --how he wants to see the price increase on a pack of cigarettes, for example.

MS. KAGAN: Well, I guess I'm going to question your premise, because the President, in fact, has been fairly specific about the sorts of things he wants. Back in the fall after we completed our review of the June 20th settlement, as you know, the President came out with five principles which are really a road map for the kinds of tobacco legislation that he has in mind. And then our budget has specified fairly clearly both the amounts of money that the President would expect the tobacco industry to pay and where that money would go to -- as you know, some of the more contested questions of this issue.

Q I'm not questioning that he's been clear about outcomes, but he's been very vague about means. That's the point. And means -- you know, the devil is in the details in this agreement. So at what point is he going to have to explain how he wants to get there?

MS. KAGAN: I do think he's been pretty detailed about means. The budget is extremely detailed about means, and as I said, the principles as well provide a pretty good road map. We are making a decision here that our putting legislation forward today would not actually advance, would not promote the cause of passing comprehensive tobacco legislation. We have tried to put forward legislation in the past, it has not always worked. What we want to do is to work with members of Congress from both sides of the aisle.

The President has said very clearly that his administration will go talk to whoever wants to talk with us. We'll be very specific about the sorts of things we would like in a bill and the sorts of things that we would think deficient. We will engage in those conversations and have been already and make clear where we are. But we do not think that the way to enact comprehensive tobacco legislation is for us to put down a bill right now.

Q The President embraced Kent Conrad's bill, which raises more money and also doesn't include the immunity from liability. Is the President now opposed to liability for the tobacco companies?

MS. KAGAN: We've been very clear on this. And we have been clear for six months. Our position has not changed. The President would prefer a bill without liability limits on the tobacco companies; but that the President -- if the President gets a comprehensive bill that meets his five principles -- if the President essentially gets everything that he wants, then liability limits are not a deal-breaker for us. And we have consistently stated that. Very recently the Department of Justice gave testimony to that effect, but that testimony only reiterated what we have said for many months.

END 2:07 P.M. EST