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Office of the Press Secretary

For Immediate Release October 15, 1998
                           PRESS BRIEFING BY 
                     CHIEF OF STAFF ERSKINE BOWLES, 
                         OMB DIRECTOR JACK LEW, 

The Briefing Room

4:00 P.M. EDT

MR. BOWLES: Good afternoon. Last year at this time when we came before you, this team behind me came to talk to you about the passage of the first bipartisan balanced budget in over 30 years. It was an enormous achievement for the country, and certainly an achievement for the American people.

This year we faced a new challenge, and that was to make sure that the last budget of this century truly does prepare us to meet the challenges of the 21st Century. I think I can safely say that we have met those challenges.

The budget that the President submitted and has been passed now truly does save Social Security. It also, while enabling us to continue to act in a fiscally responsible manner, makes sure that we go forward and continue to invest in education and training and early childhood programs. This budget includes funding for 100,000 additional teachers. It includes funding for after-school programs. It includes funding for child literacy, college mentoring, child care quality, teacher recruitment. It includes funding for 36,000 kids so they can go to Head Start and be prepared to enter school ready to learn. And it includes a 25 percent increase in charter schools, taking us a long way towards our goal of 3,000 charter shcools. I think it truly is an investment in education that we can all be proud of.

It also includes an investment in a cleaner environment, with such funding as $1.7 billion for the President's clean water plan. It also responds to our farm crisis. It responds to the financial turmoil in the world by full funding of the $18 billion for the International Monetary Fund. It has a huge increase in our investment in research and development so that America can stay on the cutting edge of research and development and we can truly be competitive in the global marketplace. This is a budget that does prepare us for the 21st century.

Areas where we will continue to fight as we go forward in the future will be in the areas of campaign finance reform; we'll continue to fight for patients' bill of rights; we'll continue to fight for tobacco legislation so that kids won't be tempted to smoke. We'll also fight for the school construction legislation, so that kids can have an environment to go to school in where they can really learn. We'll fight to make sure that we pass the President's child care initiative, and we'll try to make sure that once again we don't have another stealth attack on the environment.

All in all, I think we're all very pleased. The team behind me now, led by Mr. John Podesta -- who I'm sure you'll be seeing a lot more of in the future -- will be happy to answer questions for you.

Thank you.

Q This question applies to the statements on the South Lawn as well as Mr. Bowles' presentation there. You are essentially declaring a victory in the budget, but there are still other matters pending before COngress. Do you think there's any danger in this sort of sense of White House triumphalism at this moment, politically?

MR. PODESTA: I think that we have something to celebrate here this afternoon. We have fought very hard for the items in the budget. I think this session is wrapping up. And in addition to all the money issues that Erskine discussed, there are other issues that are coming to a head, but I think that this session is ending very well, from our perspective.

Q Speaker Gingrich said you were now the White House Chief of Staff, or you would officially be named the White House Chief of Staff. Was he correct?

MR. PODESTA: I think, with all due respect to the Speaker, that's not his decision to make. (Laughter.) And I think when the President makes a decision, he'll have an announcement about that.

Q Is the President going to sign the U.N. dues bill? Apparently it's still attached to anti-abortion legislation.

MR. PODESTA: If they send it -- I took from the Speaker's statements earlier that they intend to send us a State Department authorization that has been passed previously that they've been holding on to, and we have said that we would veto that bill, and we will veto that bill.

Q Do you disagree with Congressman Gephardt, who called this the worst congressional session he'd ever seen?

MR. PODESTA: Well, I think he was probably referring to the fact that for over eight months they virtually did nothing except kill important initiatives that the President had proposed -- on the patients' bill of rights, on tobacco legislation, on campaign finance reform. And I think that we've had a good eight days, after a very, very bad eight months.

Q Usually in the days after the agreement, we hear about these hidden elements that were put in the budget agreement at the last minute. I'm wondering if you can tell us any now that you know of ahead of time -- (laughter) -- to prepare the American people.

MR. PODESTA: I think we have to find them first. We have established a process, and I think that the Democrats in both the House and the Senate have asked that we enforce that process with Jack's people and others going through, line by line, word by word, the entire bill. As you know, it will be extremely lengthy. Given the number of bills that they had not completed action on in the appropriations area, there are a number of other issues that we have discussed. But we will be going through that bill -- that will take the remainder of today and probably into tomorrow to review what they call a readout. They will be reading this bill line by line, looking for extraneous matters that have not been agreed to.

They have obviously some prerogatives -- they are the appropriators and there are some issues that have been in the bills as they came out of conference committee in terms of projects and that sort of thing that really are within the province of the Congress.

Q Related to that, what affected the line item veto, the absence of it, have on these? How was it different this time?

MR. LEW: I think this year was much like past years -- there are many items in appropriations bills that are designated with rather specific terms. I think it was the case last year with the line item veto; it was certainly the case this year. I think we have to distinguish between the kind of projects that you're talking about and total extraneous matters.

This is the kind of a bill where you can put in major policy initiatives and almost have them go unnoticed. It's really those kinds of matters that our reading will be the precaution against. And we will be reading very carefully.

Q So you're saying that you might exercise line item veto, you just don't --

MR. LEW: We have no line item veto authority. The Supreme Court answered that question rather clearly. (Laughter.)

Q Why do you think Republicans gave in on so many issues?

MR. PODESTA: Well, I think we answered that question. I think the President and Vice President and Mr. Gephardt and Senator Daschle answered that question out on the lawn. I think that we had put an agenda before them that was an agenda that was popular with the American public, and we stuck together. We fought very hard, we had our priorities straight, and eventually, I think they knew that they were going to -- in the face of the resolve that was shown by a united Democratic front, that they thought that the best way to complete their work and to end this session was to fund the priorities that we had laid before the people.

Gene might want to comment especially on the education agenda which we've been fighting for all year, but as I think you know, they did not put an education bill on the floor of the House until last week. And that bill contained a lot of goose eggs, in our opinion.

MR. SPERLING: I would just say that Bruce Reed and I came in, I guess, about a week ago, and went through, we thought, 12 or 13 priorities where we wanted dramatic changes from where the House committee was on Labor and Health and Human Services. That's the first page we put out there, and I think you see how dramatic the increases are -- almost an exact meeting of our budget request.

In issues that most profoundly and specifically affect average and often disadvantaged people's lives -- addition to smaller class size, the summer jobs -- and then brand new initiatives that the President has been pushing for -- the child literacy; that's bipartisan, but originated in America Reads -- the college mentoring, the youth opportunities areas, the after-school program. So I think that this has not been uncommon that when we've been able to engage on a fight on education, the American public is strongly behind the President, and that's reflected in this outcome.

Q Gene, what's your reaction to the Fed's interest rate cut, and do you think it was far enough?

MR. SPERLING: Our philosophy on the American economy is that we should do our job, which is keeping fiscal discipline, investing in the American people and opening world markets, stabilizing the global economy. And Chairman Greenspan should do his job, and we respect his independence and don't comment on his actions.

Q Related to that, is there a point at which you could see the U.S. economy being in enough jeopardy that the President would have to consider a major tax cut as a stimulus to complement the Fed's rate reductions?

MR. SPERLING: There's been a very clear lesson over the last two decades, and that is that when there was huge borrowing in an effort simply to live beyond our means, to try to pump up consumption-oriented spending, it was not sustainable, did not lead to strong investment.

The strategy we've had has been an investment-led expansion. It's a simple recipe: Fiscal discipline has led to low long-term interest rates and significant investment and then expansion of our capacity, which has allowed for the sustainable growth we've seen, which brings unemployment low and brings more people into the workplace.

Our feeling is that the strong, strong presumption must be to stay with the economic strategy that works. Of course, we will be open-minded in the face of changing economic circumstances, but the strong presumption from the lessons of the last two decades is to stay with the fiscal discipline, investment in people and investment in private capital that has led to this investment-led recovery.

I should say that in December, we will have the longest peace-time expansion in history.

Q John Podesta, there's been a lot of speculation this year about whether the President has been weakened and distracted by the scandal away from some of these priorities. I wonder, with the Congress now leaving, on the one hand, you've got a lot of your budget priorities in hand; on the other hand, there are some things like the tobacco bill and patients' bill of rights that you were not able to get. So could you assess for us how that ended up playing out this year?

MR. PODESTA: Well, I think that the President laid out a powerful agenda in the State of the Union. He's fought for it very hard all year, both on his domestic agenda and he has fought for his international agenda as well through the course of the year. And he's fought for stability in the international economic arena.

I think at the end of the day -- I think we have an interesting confluence of events with him here working on Middle East peace at the same time that we had these successes on the budget. I think that he retains his strength, his authority. And I think that the achievements that we've achieved over the course of this week demonstrate that he's led the country in the right direction in a way that is popular with the American public, and he'll continue to do so.

We did have some defeats this year, but those were defeats I think that were the result of Democrats being in the minority in the Congress and the Republicans' determination to kill a number of important bills on youth smoking -- again, we could go down the list -- on campaign finance reform, and the patients' bill of rights. We're going to come back.

As you know, Susan, he's been a guy who for the last six years has come back and fought and fought and fought for the things that are important to the American public. I think that's what the American people respect in him. And we're going to come back and we're going to try to -- we'll go back again to get a patients' bill of rights, to deal with the Social Security issue, and to come back and fight again on school construction as soon as the Congress returns in January.

Q On school construction, it's likely, though, that the Republicans will want a major tax cut next year. If you fix Social Security early enough in the year and there is a surplus, would the White House be willing to consider an across-the-board tax cut?

MR. SPERLING: We've had a clear statement, philosophy on this, which is that all of the surplus should be reserved until we come up with a bipartisan plan for Social Security. Once that happens, if there is remaining surplus, we expect that there will be a very healthy debate in our country between whether that surplus should be used for debt reduction, Medicare, investing in education or tax cuts. And that's a debate that we think should happen after we've done -- completed Social Security.

On school construction, it is baffling to us that for two years in a row they have laid down on the tracks to prevent the federal government from doing anything to help what is certainly a crisis in terms of school construction. I think they've become farther and farther out of touch with people on education.

This school construction initiative -- talk about local efforts -- this is about empowering people at the local level who are trying to do the right thing. They're trying to have a long-term bond investment in their schools, in modernizing their schools, people at the local level doing bond issues, trying to do the right thing. And this is the federal government giving them a little incentive. And the fact that it is rejected year after year is very puzzling, and it's one of the things that certainly will be a topic for this election.

Q Mr. Podesta, will there be any point in the next two weeks before the election that President Clinton will go out and campaign for members of Congress? I know he's got a few fundraisers scheduled, but will the President go out and campaign for Democrats running for Congress?

MR. PODESTA: I think that the President, over the next couple of weeks, intends to lay out the important issues that the American public need to consider as they go to the polls on November 3rd. But the President is not on the ballot and I think he's going to do the things that he thinks are important, and that includes, as you know, raising money.

Q But by staying here or by going out on the campaign trail will he be laying out these issues? That's what we're asking.

MR. PODESTA: Well, I think that --

Q Will he be doing them at rallies for Democrats, or is he going to be doing them --

MR. PODESTA: I think that we'll be doing what we have been doing, which is to lay -- we'll do a certain amount of traveling; I think a lot of that is associated with fundraising. But we are going to be out speaking to the issues that the American people care about, and I think that will lay a predicate for what this election is all about. I think we've already seen it in the budget fight we've had over the last week and the agenda that the congressional Republicans have laid out, in contrast to the agenda that the Democratic Party has laid out.

Q Can you tell us where the dispute about contraceptives for federal employees stands at this point, and why haven't we heard the President address that issue publicly?

MR. PODESTA: We fought very hard for the Lowey language that was included by both the House and Senate in the bills, and we have reached a reasonable compromise on that issue and it will be included in the bill.

Q Can you address why the President hasn't addressed it yet? Can you tell us what the compromise is?

MR. LEW: The compromise language is consistent with past efforts to reach compromise on this to permit individuals who have conscience issues to make their own decisions, but to not have the kind of broad language that was sought by the opponents of the amendment. The resolution is one that the supporters of the amendment, including ourselves, think is a fair one. And it's a very important step forward in terms of having a positive statement on the coverage of contraceptives in health insurance.

Q What about the census?

MR. PODESTA: Just to kind of step back a second, the provision requiring federal plans to have contraceptive services will be included in the bill. So we're very pleased with that. And I think it was done in such a way that restricted the -- the restriction on plans is, to the extent you're following that, only to religious-based plans.

Q What about the census? Can you talk about the census?

Q How hard did Republicans push for the major tax cut in the negotiations? And was the division between the House and Senate Republicans -- did that take a tax cut off the table in negotiations?

MR. LEW: I think well prior to the negotiations, the decision had been made that the tax cut that had been passed in the House simply couldn't get the votes in the Senate. And as a consequence of that, it was sort of a foregone conclusion. There was no sign of a division between the House and Senate Republicans during negotiations. I think the issue was close.

Q On a couple of other issues, can you tell us where the issue of Amtrak funding is right now? How will that be resolved?

MR. LEW: Amtrak funding was not an issue in the final negotiations. It had been resolved in the context of the transportation conference, and it was an adequate funding level for Amtrak. It was just a tiny bit below our request, but one that we and supporters of Amtrak are comfortable with.

Q -- a dollar figure?

MR.LEW: I don't recall the dollar figure, but I'm happy to check.

Q Hello. I wonder, do you agree with me that the prosperity that this country is enjoying today is part because of the contribution of the national export -- carried out by the -- Coordinating Committee? And I wonder, what is the reason that the President has not enjoyed the fast track authority they have given other Presidents. Are we going to wait until the next century to obtain that? What is your response?

MR. SPERLING: We clearly believe that the President should have the traditional trade authority and we hope to be able to come back and work in a way that forms a new consensus where we can bring Democrats and Republicans together on an open market agenda that strengthens labor and environmental standards. That would certainly also include the Africa Free Trade Act, which we very much wanted to pass this year and we're disappointed that we did not, and we'll come back strong on.

Let me just say one other thing that -- strike a bipartisan note, which is that the situation in the international economy is much, much too important and serious and significant at this point for there to be partisan rangling. And so we very much appreciate the bipartisan effort, Democrats and Republicans in the House of Representatives, to pass the IMF. The IMF, as the President has said all year, passing IMF is critical for giving the opportunity to help stabilize the global economy. We appreciate the bipartisan effort that was made in the last couple of weeks to pass this, and we hope that will be a bipartisan spirit that will continue as we address other issues in the global economy.

Q And also, could you just explain if you do veto State Department authorization, will that affect the functioning of the State Department or -- authorization, it's not appropriation, so that doesn't --

MR. LEW: The answer to the second question is no. On the census, the issue remains a point of controversy where we very strongly believe that statistical sampling would provide the most accurate form of modern enumeration. We feel that it something that is the right way to pursue.

There was an equally strong feeling on the other side that the decision should be to go with straight enumeration. The way it was resolved was to give the Court a chance to take up this case in the fall and to put a deadline of June 15th on the funding bill for the Commerce, Justice, State, Departments. What that will do is raise the issue in mid-June, after we believe the Supreme Court will have completed action on this, and at that time we remain committed to proceeding with statistical sampling. Obviously, the Court could rule one way or the other.

What we'll be doing between now and then is continue with the dual track which was the resolution last year. The provisions in this agreement provide a bit of additional funding, since the date is going to be June 15th, to allow both tracks to proceed, so whichever way it goes, we can have the most accurate census possible. But we remain one hundred percent committed to statistical sampling and we will be fighting for that, we hope after a favorable Supreme Court decision.

Q One of the priorities that the President didn't get this year is the tobacco bill, and I'm wondering -- one of the criticisms, legitimate or not, of the White House was that you did not produce your own tobacco bill, and I'm wondering if next year you would consider that and whether or not you think there is still a prospect for comprehensive legislation.

MR. REED: Well, as you know, we did work together on a bipartisan basis with Senator McCain and others to develop a comprehensive bipartisan tobacco bill, which the administration endorsed and which had a majority of votes in the Senate, but was killed at the last minute by the Republican leadership. We're going to come back again and again on tobacco and we hope to get even more bipartisan support this time.

Q But are you going to come back with your own bill?

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

Q Do any of you know if the India-Pakistan sanctions made it into the budget bill, as well as three energy issues -- SPR, oil royalties and the North Korea heating oil?

MR. LEW: I can respond to some of the questions, and I'm not sure I understand what you're referring to. On the Strategic Petroleum Reserve, do you mean the emergency proposal that was pending in the Senate?

Q Purchasing more oil for --

MR. LEW: That is not in the agreement. Remind me what the other items were.

Q The India-Pakistan waiver --

MR. LEW: There was nothing in the negotiation at the end. I don't believe there was anything in the base bill.

Q The oil royalties delaying --

MR. LEW: There will be an eight-month moratorium.

Q Money to send heating oil to North Korea?

MR. LEW: Do you mean the KEDO agreement? That will be funded in the bill.

Q How much?

MR. LEW: $35 million.

Q Gene, when you answered his question on fast track and you mentioned labor and environmental provisions, did you mean that the fast track bill should be changed to include more of those provisions to get Democratic support?

MR. SPERLING: I'm just stating the obvious, which is that last year we did not have enough of a consensus to pass that bill, and obviously, we would like to be able to work together to form a larger consensus.

Our position has always been clear since the President spoke in 1992. He has always supported opening markets while also protecting labor and environmental standards. That's not in disagreement. There's disagreements on the margins. Some would like there to be less emphasis on this; others would like there to be more emphasis. But I think it goes without saying that we obviously have to do better to build a larger consensus, and that's what we hope to do.

Q My question is for John Podesta. Do you have a sense that there was any goodwill engendered over these last days in the budget deal that will carry over into the impeachment inquiry, and have you seen any evidence of that yet?

MR. PODESTA: I thought you were going to ask me whether we were going to be able to solve the Social Security issue. (Laughter.) I think there was enough goodwill generated to approach that question, the question of Social Security, in a way that maintains a kind of bipartisan focus, which I know that Gene has worked very hard on all year. And it's, I think we -- it will be a top priority of ours to fix Social Security.

With regard to the impeachment question, frankly, it was never dsicussed around the table. And I think that whatever negotiations we carried on around the table were with -- really with the three leaders and it stuck with the substance. Whether their strategy of investigation and open-ended investigations is something they intend to pursue once they face the voters in November is something I think that Republican members of both the House and Senate will have to consider.

Thank you.

END 4:30 P.M. EDT