THE WHITE HOUSE

Office of the Press Secretary

                        REMARKS BY THE PRESIDENT
                   TO THE THIRD ANNUAL DLC CONVERSATION

                      Baltimore Convention Center
                          Baltimore, Maryland

3:00 P.M. EDT

THE PRESIDENT: Thank you very much. You guys look out there. (Laughter.) I want to thank Al for inviting me. And thank you, Cruz, for your wonderful remarks and your generous introduction. One thing I like about the California Lt. Governor is he doesn't beat around the bush, you know what's on his mind. (Laughter.)

I shouldn't do this because it's not really presidential, but I'm going to do it anyway. I have really -- you've got to give it -- this compassionate conservatism has a great ring to it, you know. It sounds so good. And I've really worked hard to try to figure out what it means. I mean, I made an honest effort.

And near as I can tell here's what it means -- it means: I like you, I do. (Laughter.) And I would like to be for the patients' bill of rights and I'd like to be for closing the gun show loophole, and I'd like not to squander the surplus and save Social Security and Medicare for the next generation. I'd like to raise the minimum wage. I'd like to do these things. But I just can't, and I feel terrible about it. (Laughter and applause.)

Oh, that will come back. (Laughter.) I would like to thank -- you don't have to give me credit if you repeat that back home. (Laughter.) I want to thank you all for being here today. We have five governors -- Governor Glendening, Governor Barnes, Governor Carnahan, Governor Carper, Governor Vilsack. Lt. Governor Kathleen Kennedy Townsend here, along with Lt. Governor Cruz Bustamante. Mayor Schmoke, the leaders of the Maryland legislature, Senator Mike Miller and Speaker Casper Taylor; any number of other officials.

I brought a large delegation from the White House, including Secretary Glickman and a number of people who have been particularly close to the DLC, including Sidney Blumenthal and your old hands, Bruce Reed and Linda Moore. And I brought a person who joined the DLC with me back in 1985, although he says he joined before I did -- my first Chief of Staff and the former Special Envoy to Latin America, Mack McLarty. So we're old friends, and I thank them all for coming with me today.

This is the third National Conversation about a talk that Al From and I have been having for nearly 15 years now. Today we can have a very different conversation than we had 15 years ago, or even half that long ago, because of the proven success of new Democratic ideas.

When I first ran for President back in 1991, I asked for a change in our party, a change in our national leadership, a change in our country. The American people have been uncommonly good to me and to Hillary, to the Vice President, to Tipper, to our administration, and thanks to their support, we have changed all three things. The ideas of the men and women who are here today are rooted in our core values of opportunity, responsibility, and community. They have revitalized our party and revitalized our country.

We won the presidency in 1992 with new ideas based on those values, because the American people could see and feel the old ways weren't working. We won again in 1996 because, with the help of a lot of people in this room, we turned those values and ideas into action. And they did work to get our country moving again -- or in the words of Cruz Bustamante, they did help real people.

Now, as we move into a new era and a new millennium, these ideas, as all of you well know, have spread around the world. They've helped center-left parties to take power in Great Britain and France and Germany and Italy and Brazil. They have sparked the kinds of debates and discussions that you have been having in virtually every country in the world where people take politics seriously. The Third Way has become the way of the future.

And when you hear our friends in the other party sort of use the same words in the same way, if imitation is the sincerest form of flattery, that, too, is something we should welcome.

I told the little story at the first because, as the Lt. Governor said, rhetoric and reality are sometimes two different things, and it's better when they're not, when they are the same thing. But it shows you the grip that the idea of a dynamic center has on thoughtful people throughout the world. It shows you how desperately people want new ideas, experimentation, an end to bitter partisanship, a genuine spirit of working together. And wherever that exists, it is a good thing.

As we move into the Information Age, we really, as Democrats, have reclaimed the true legacy of Franklin Roosevelt, which is not a particular set of programs, but a real commitment to bold experimentation; to the idea that new times demand new approaches, and often a different kind of government.

America was ready to listen to that back in 1992. You know, it's almost hard to believe now, and we may have to remind our fellow citizens in times to come just what it was like back then. How high the unemployment was; how stagnant the wages were; how steeply growing the inequality was; how fast the social conditions were worsening.

Then, the Democrats were seen too wedded to the programs of the past to make the necessary changes for today and tomorrow. The Republicans were too committed to the idea that gov was the cause of all of our problems, and neglect, therefore, was the right response.

They won election after election at the national level by sort of dividing our people and putting up cartoon caricatures of our Democrats -- long-term future. And what I am trying to get the American people to focus on now, and the Congress, is that in the remaining days of this century and this millennium, we will either explicitly or implicitly make some very large decisions that will affect our country for a long time to come.

I think that we have shown by results that our Third Way is the right way for America, for our economy, and for our society. In the weeks to come, around the budget we will have a huge debate over great national priorities. We will have to make a choice that five or six years ago you never would have believed we'd be making, which is how are we going to use the fruits of our prosperity.

If somebody had told you six years ago, the biggest debate in Washington will be what to do with the surplus -- (laughter) -- you would never have believed it. Now, I think the answer is to stick with the economic strategy that brought us to this great dance and to deal with the great challenges still before us.

So I gave the Congress a budget that will do big things -- that will meet the challenge of the aging of America by saving and reforming Social Security and Medicare; that will do it in a way that will make this country debt free for the first time since 1835 -- (applause.) That will raise educational standards and end social promotion, but provide for summer school, modern schools, and 100,000 more teachers and hooking up every classroom to the Internet by the year 2000. That will make America safer with even more community policing and more efforts to keep guns out of the hands of criminals. That will make America more livable with the Vice President's livability agenda. That will provide genuine tax relief to the people and the purposes who really need it at a price we can afford, without undermining our prosperity, including our new American markets initiative, designed to give Americans the same incentives to invest in the poor areas of America we give today to invest in the Caribbean and Latin America and Africa and Asia. I think that's a very important thing to do. (Applause.)

I might say all of you would have gotten a big kick seeing Al From and Jesse Jackson walking arm in arm across America last week. (Laughter.) It was good for America. It was good for the Democratic Party. It was good for the people that lived in Appalachia and the Mississippi Delta, in East St. Louis -- Mayor Powell, I'm glad to see you here today. We had a wonderful time there. Thank you for coming.

She gave such a great speech when we visited East St. Louis, I told her she ought to show up for this conference. And, lo and behold, she did. So I thank you for coming.

We went to Pine Ridge Indian Reservation in South Dakota. We went to South Phoenix -- and I know we've got some legislators from Arizona here today, and I thank you for being here. (Applause.) The block over there. And we ended in LA. These are big things. These are big, big things. And we will decide, directly or indirectly, whether to embrace them. The decisions cannot be escaped.

You all know the basic elements of my plan. I want to use the bulk of the surplus to save Social Security. I want to set aside 50 percent of it to reform Medicare and to begin with a prescription drug benefit, which would have been in any program if it were to be designed today from the start. I want to provide substantial tax relief, $250 billion of it, targeted to help families save for retirement, to deal with child care and long-term care needs, to help to deal with some of our larger challenges including modernizing our schools, adjusting to the challenge of climate change, and as I said, investing in America's new markets.

If we do it the way I have proposed, this country will be out of debt in 2015. Now, I would like to tell you very briefly why I think that is a good idea. First of all, you all know we live in a global economy. Interest rates and capital availability are set in global markets. If a wealthy country like the United States is out of debt, what does it mean? It means interest rates will be lower; it means there will be more business investment; it will be more jobs; it will be higher incomes. It means that for ordinary citizens, their car payments, their house payments, their credit card payments, their student loan payments will be lower.

It means the next time there's a financial crisis in the world, we won't need to take money, and the needy, vulnerable countries will be able to get the money they need at lower interest rates, which means not only their people will be better off, but they will be better trading partners for us and their democracies will be more likely to whether the storms.

This is a progressive idea today, and we ought to stick with it. Now, I realize 16 months before an election the allure of "I've got a bigger tax cut than you do; come look at my tax cut" -- (laughter) -- I mean, that's got a lot of appeal, you know. And it doesn't take very long to explain. You can put it in a five-second ad -- "our tax cut is bigger than theirs." But I'd just like to remind the American people, number one, look at the results we have achieved in the last six and a half years by looking to the long run and doing the responsible thing.

Number two, every ordinary American citizen, and virtually every wealthy American, will be better off over the long run with lower interest rates, a more stable economy, a more growing economy, than with a short-term tax cut. I'm not against a tax cut. We've got a good one in here. But if we don't fix Medicare and Social Security, and we let the baby boom generation retire, and worry about whether these systems are going to go haywire, and we impose on our children the burden of taking care of us when it is absolutely unnecessary, undermining their ability to raise our grandchildren, we will never forgive ourselves -- just because there is an election in 16 months. It's wrong. (Applause.)

The Vice President and I had a meeting with the Republican and the Democratic leaders of Congress Monday, and we told them that we wanted to work with them. And we have worked with them in the past, as I said, with welfare reform and the Balanced Budget Act. But we've got to stay on this new way. I think that on this issue they're still committed to their old ways.

Yesterday, the Republican leadership unveiled a tax plan that I believe could wreck our economy. It would certainly wreck our fiscal discipline. Let me explain what is wrong with their plan. Their tax plan would devote just about all of the surplus that doesn't come from Social Security taxes, all the non-Social Security surplus to a tax cut. First of all, if they did that it would leave no money for Medicare. Every responsible analyst of Medicare says there are just so many people drawing and so few people paying in -- as the baby boomers retire, that will be twice as many people over 65 in 2030 as there are today -- everybody says you've got to put some more money in. So there would be no money for that.

Secondly, it would require, as our economy grows, real cuts in education, defense, the environment, research, technology, the kinds of things that we have invested more in. We have almost doubled investment in education and technology, as we have shrunk the size of the government and gotten rid of the deficit and eliminated hundreds of programs. So it won't work.

The second big problem with it is that if you look at the next 10 years, not just the first 10 years -- that is, the 10 years when the baby boomers will retire and when we ought to be paying off the debt, their tax cut will really be big -- and it will put us back into debt.

So remember now, I'm not going to -- I hope I will be one of the people just out there drawing my check, you know. I'll be out of here. But think about this -- especially the younger people in this audience. In the second decade of the 21st century, just when the baby boomers start to retire, just when Social Security and Medicare begin to feel the crunch, just when we could be debt free for the first time sine 1835 -- at that very moment, their tax cut would swallow the surplus and make it impossible to meet our basic commitments.

I have asked the Treasury to report as soon as possible to me on what their tax cut costs in the second 10 years of this decade. We should not undo our fiscal discipline. We should not imperil our prosperity. We should not undermine Medicare. We should not make big cuts in education, defense, research and technology, and the environment. I won't allow that sort of plan to become law. It wouldn't be right. (Applause.)

Now, again I say, we can have a tax cut, we ought to have a tax cut, but we ought to do it in the right way for the right reasons, and we ought to put first things first. We should save Social Security and Medicare, meet our responsibilities for the next century before we go off talking about the tax cut.

You know, some of this is basic arithmetic. We had years and years in the 1980s when people said there is no such thing as basic arithmetic. There is supply-side economics, or whatever. And they said supply side economics would dictate a huge recession after our '93 economic plan passed. But the American people don't have to guess any more.

We tried it their way, we tried it our way. There is evidence -- and I'm telling you, I don't care if the election is next week, never mind next year; we have worked for too long to get this country out of the hole. We are moving in the right direction, and we must not compromise the future of America and the next generation just for the next election. It would be wrong, and I want you to help us get that message out there. (Applause.)

The same thing is true on crime. The DLC had a lot to do with our ideas about fighting crime. And you remember what they were: We wanted 100,000 police. We used to go -- our DLC trips, we'd go to these places and we'd go look at these community policing operations that were already bringing crime down in cities in the early '90s. We wanted the Brady Bill, we wanted an assault weapons ban, we wanted targeted, tougher punishment and broad prevention programs for our young people -- and the program is working.

The real choice, as the Vice President pointed out in his speech Monday, is not between stronger punishment and better prevention; the real choice is to do both. But I hope the DLC will not give up its ideas on fighting crime just because we're at a 26-year low. Because if you're one of the victims, the crime's still too high. (Applause.)

We could make this country the safest big country in the world if we would do the right, sensible things to do it. I thought the Vice President put some great ideas forward on Monday. And that's what this election ought to be about. Even the commentators on the other side point out that so far, he's the only person who has actually said what he would do if the people gave him the job, which I think is a reasonably good idea to do.

You probably ought to tell people what you're going to do when you get the job, and then you would be more likely to do it. And I believe the central reason for the success that we have enjoyed is that we worked -- Al and I and others and my folks at home, we worked for years to think about exactly what ought to be done. And so, if you look at what he said, we ought to apply reforms that are working in the private sector at many levels of government to revolutionize the justice system. We ought to take the next step on licensing people who own handguns to make sure that they're trained to use the guns and that they should have them, and that would solve all these loopholes, because if you had a bad background, you couldn't get a license, you couldn't own one.

This is not going to keep anybody from being a hunter or sportsman. This is not to undermine the fabric of life in America; it's going to make it safer. And this is a very serious issue, so I would urge you to keep up your interest not only in the economic issues, not only in the entitlement reforms, but also in the question of how we can make America the safest big country in the world.

When I was running in '92, we were just trying to get the crime rate down. Everybody thought it was going to go up forever. Now we know we can bring it down. I think we ought to commit ourselves to making America the safest big country in the world. When I was running in '92, everybody said we've just got to get the deficit down, got to try to balance the budget. Now, we can imagine making America debt-free. We can do things that are not imaginable at the moment if we will have good ideas and work on them in a disciplined way.

So I think that the other candidates ought to follow the Vice President's lead and tell us where they stand on these crime issues. And on the other issues as well. There will be clear choices here. Will we have common-sense gun laws, or government by the gun lobby?

I'll never forget when I went to New Hampshire in 1996. Just for all you elected politicians who think you can't survive this stuff, they voted for me by one point in '92 and I was grateful, because they normally vote Republican. So my first meeting, we had a couple of hundred largely men in this audience in their plaid shirts, waiting more for deer season than the President's speech. (Laughter.)

And so I told them, I said, you know, in '94, you be the Democrat Congressman up here, and you did it because you voted for the Brady Bill and the Crime Bill and the Assault Weapons Ban. And I want you to know he did that because I asked him to. So if you have, since 1994, experienced any inconvenience whatever in your hunting season, I want you to vote against me, too, because he did it for me. But if you haven't, they lied to you and you ought to get even. (Laughter and applause.)

In New Hampshire, our margin of victory went from one percent to 13 percent. You can do this. Tell the American people the truth about these things. Just go out and tell people the truth about these things. I feel the same way about welfare. I had to veto two bills that the Congress passed, because I thought they were too tough on kids. The took the guarantee of nutrition and health care benefits away from children.

After we put that back in, I believe the welfare reform bill was right because I thought we ought to require able-bodied people to work, and because letting the state have the money for the benefits was not a big deal since the states had radically different levels of benefits anyway. And remember -- in our welfare reform bill, we left the states with the same amount of money they had in February of 1994 when the welfare rolls were at an all-time high, even after the rolls dropped, so that they could be free to put the money back into training, to child care, to transportation, to the things people need.

We've still got work to do to make sure that work pays. With the strong support of the DLC back in '93, we doubled the earned income tax credit. Then we raised the minimum wage. We put more into child care. But I want to do some other things. First of all, we are changing the rules so thousands of poor working families won't be denied food stamps as they are today just because they own a reliable car. We're going to change those rules, and we should be for them. (Applause.)

We're also going to get rid of some of the old reporting rules and launch a national campaign to make sure that working people know there is no indignity in taking public assistance to help feed their children if they're out there working 40 hours a week. (Applause.)

And finally, let me say I hope you will really give a lot of thought to the project that Al and I and others were on last week. How can we go across that bridge to the 21st century together? How can we bring the spark of enterprise and opportunity to every community? There are still a lot of people that haven't participated in this recovery, and a lot of places that we didn't visit last week. There are still a lot of small- and medium-sized towns that lose just a factory, but have real trouble restructuring their economy.

We presented this New Markets Initiative which I said I think is very good because it will give the same incentives to people nationwide that they only have in the empowerment zones today to invest in those markets. But we need to do more. A fertile, fertile ground for DLC endeavors is involving everyone -- every single American who is willing to work -- in American enterprise. We can do that.

And let me just make one last point as we segue into the next part of the program. The DLC now takes a lot of justifiable pride in the fact that the ideas we have long championed are now being debated in Berlin or London or some other world capital. But that's not why we got into this.

We got into this to prove that politics had a positive purpose in the lives of ordinary citizens. And therefore, it is far more important for us what is happening in Sacramento or in countless other legislators in city halls across America. You are still on the front line of the battlefield of ideas. You must lead us forward.

I have taken enormous pride in the work of Lt. Governors like Cruz Bustamante and Kathleen Kennedy Townsend. I have taken enormous pride in watching mayors like Kirk Wilson in Austin and Don Cunningham in Bethlehem. I see my former colleagues in the Governor's Association continuing to do remarkable things and people in other state offices. Don't forget that.

I close with these words. Robert Kennedy, who I believe was trying to do something like what we've been doing when his life and career were cut short in 1968, said, "Idealism, high aspiration and deep conviction are not incompatible with the most practical and efficient of programs. There is no basic inconsistency between ideals and realistic possibility. No separation between the deepest desires of heart and mind and the rational application of human effort to human problem." That is a good statement of what we believe and what you were doing.

I thank you for your hard work, and I ask you to remember -- you can celebrate our achievements all you want, but the American people hire us for tomorrow. Thank you and God bless you. (Applause.)

THE PRESIDENT: Well, first of all, I would like to thank Kirk and Don and Ember and Mike for their presentations. They pretty well made the point I was trying to make that -- and I think they're four people who could do just about any job. And I think that the jobs they are doing are changing people's lives.

I would just like to make a couple of points about what was said by each of them. First of all, if I could go back to the point I made about paying the debt down and the general condition of the economy -- if we can keep this going, pretty soon this peacetime expansion, which is the longest peacetime expansion in history -- we have the longest expansion of any kind in our history, including wartime, pretty soon. Now, I do not for a moment believe we have repealed all the laws of economics. But I do believe that the technological revolution underway in America, and the fact that we have relatively open borders, and therefore, have consistent competition, has kept inflation down as we've had growth.

But if you look at what they said from the perspective that I have to take every day, you know, we sit around here all the time and we argue, how much more can the American economy grow without getting inflation going up. And you remember, every time the Federal Reserve meets now, that's the big argument -- people say, are they or are they not going to raise interest rates. Well, there's no evidence of inflation now, but surely we can't keep doing this on and on and on.

We've now got unemployment under five percent -- for two years in a row. Well, if you think about it, how could we continue to grow without inflation. And if you posit for the moment the potential of technology, there are the following ways: You can look at what Austin is doing -- you have to continue to expand the base of people that make a living in the most powerful part of the economy now.

Eight percent of our economy is in high-tech, 30 percent of our growth. And since it, by definition, is -- the whole thing that makes it work is continuing explosive increases in productivity. So that's one thing you can do. The second thing that you can do is to sell more of what we make around the world, which is why I've tried really hard to build a consensus among our party and to reach out to the others, but continue to expand trade, but to do it in a way that lifts labor and environmental standards around the world, so it's a race to the top, not a race to the bottom.

The third thing you can do is to reach out to discrete population groups, and that's what Michael does. The two biggest discrete population groups in the country that are still not in the work force are the people who still haven't moved from welfare to work, although we've moved another million and a half last year. And they are the hardest to reach. That's why what you said about the work force act's so important. Every governor now has been given the opportunity to work with labor commissions and others to design a training program that we hope will eventually lead to a lifetime educational training program, so that whenever anybody's changing jobs at any age, they'll always be able to get the training they need. But the two big population groups anywhere are people on welfare and disabled people who want to go to work.

One of the things that I think will come out of this Congress, there appears to be almost unanimous bipartisan agreement that we ought to let people on disability who get Medicaid health insurance keep their Medicaid when they go in the work force. Now, that's a good deal for the state, because we're going to pay their Medicaid anyway -- state and federal government -- but if they're working, they'll be paying taxes back. They'll be happier, they'll be part of it.

Seventy-some percent of the people who are disabled in this country want to go in the work force. I met -- in New Hampshire, I met a guy who was an Olympic skier once who had a terrible skiing accident, was confined to a wheelchair. He had $40,000 in medical bills a year, and that was slightly more than he was going to make on his job. We're better off if he takes a job. But on the welfare -- I don't want to minimize the difficulty of this -- he's got a big challenge now, because most of the easy movement from welfare to work has occurred. So if you want to move people now, you've got to really work at it.

And then, to go to what the Mayor of Bethlehem said, the other thing we've got to do is to find a way to enable people who lose their economic base to create one more quickly. People like me who come from the Mississippi Delta area -- I see Mr. Eastland over there -- that's what happened to us. We never -- we lost the economic base that once gave everybody a job, even though a lot of those people were working for substandard living, and we -- that's a part of our country that's not yet reconstructed its economic base. That's why I think the DLC ought to be working on it.

The reason we were celebrating East St. Louis the other day is it was the first -- this Walgreen's store is going to anchor this big development down there -- it's the first development they've had in decades. Not years, decades. We cannot afford, in an economy that's moving literally at the speed of light, to wait decades to figure out how to bring enterprise to places that have been left behind. We have to figure out how to do that better. And what you're doing will work, but it needs to be done everywhere.

The last point I'd like to make is that, going to what Ember said, when I became President, there was one charter school in the whole country -- one -- in Minnesota. Minnesota was also the first state in the country to have statewide school choice before the charter schools; Arkansas was the second -- I stole the idea from Minnesota. So I said, let's have 1,000 charter schools. Then, I asked the Congress to give me enough money to help people set up 3,000 charter schools for next year. We're going to be at 1,500 this fall. I think next year will be actually quite close to 3,000 nationwide, which is enough to have a profound impact.

But we won't really have a successful system until the things that make the charter schools work can be found in the other schools. And the voucher movement will never go away if people feel that they're trapped in failure. I've worked for school choice, I've worked for the charter schools, I believe in accountability. Actually, there is no evidence -- and there is quite a bit of evidence out there now on how well kids do who opt out and go to private schools -- there is no evidence that they're doing better. But if people feel their schools are unsafe or they're inadequate, the voucher movement will be out there, and it will be a difficult political issue for Democrats, for Republicans, for people who love public education.

We have got to prove that -- the one thing that we have never done -- and I've worked for 20 years on this deal now, more than 20 years now -- we have not succeeded as a country in taking what works in public education in one place or two places or 10 places, modifying it for local conditions, yes, but implementing it somewhere else. So you have to assume that parents and others who would go to the trouble to set up the charter schools wouldn't go to all the trouble unless they were committed to learning, unless they were really committed to what works.

But if I could have waved a magic wand as governor when I was governor and solved any problem in my state, it would have been that. I had poor little rural schools, I had some schools in poor urban areas that were doing stunningly well. But I never could either set up the systems or set up the incentives or convince people that everybody else ought to run through what they were doing and do it. Because this is not rocket science. This is not the same as walking on Mars within five years. In some ways, it's more difficult because it deals with the human psyche and all these human difficulties, but people can understand what works.

And I just think that the work you've done in Minnesota and what you're pushing now, this whole concept of charter districts -- I never even thought about it before you said it today -- but that's the sort of thing we need to be doing. We will never bring everybody into the big tent of our prosperity until we have not only the best higher education system in the world, but the best elementary and secondary education system in the world.

And you've got to give this lady and her colleagues in Minnesota an enormous amount of credit for what they have done now for more than a decade to make us think about this. But if I could say to all of you at the grass-roots level, if you can figure out a way to make economic change faster, to bring opportunity to where it doesn't exist, and to bring more uniformity of excellence in public education -- if we could do those things, if that could be a huge part of the DLC's crusade for the next decade, I wouldn't be a bit worried about America's future.

Thank you very much. (Applause.)

END 3:58 P.M. EDT