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Office of the Press Secretary

For Immediate Release August 10, 1999
                           PRESS BRIEFING BY
                       BARRY TOIV AND DAVID LEAVY

                           The Briefing Room

2:43 P.M. EDT

MR. TOIV: We're going to start the briefing, but actually, David is going to pick it up -- he has an announcement.

MR. LEAVY: Thank you, Barry. The United States has designated Ariana Afghan Airlines under the Taliban sanctions today, blocking all of Ariana's assets within U.S. jurisdiction and making clear that no U.S. entity or individual can engage in business transactions with Ariana Afghan Airlines. These sanctions are in response to the Taliban's continued provision of safe haven to Osama bin Laden and his terrorist network. These sanctions are going into place immediately.

Just in way of background, Ariana is the only international carrier with regular flights in and out of Afghanistan. As such, we're concerned about the role it may play in ferrying material, personnel and finances to the Taliban. As part of our strategy to isolate bin Laden and his supporters, we'll continue to apply sanctions against him and those who support and assist him in carrying out his acts of violence.

The Treasury Department's Office of Foreign Assets and Control, OFAC, is reviewing reports that some foreign banks, businesses and individuals, including persons in the Middle East, are acting for or on behalf of Mr. bin Laden and providing material or financial support for his violent acts. Should these reports prove true, and if these entities and individuals do not cease their support to Osam bin Laden, they could face the same sanctions as the announcement today.

Q What can you tell us about these possible threats of strikes across the border into U.S. interests in Pakistan?

MR. LEAVY: There was a report yesterday that I would steer you away from. There's no substance to it. I think, as you all know from dealing with us, we don't comment on commando raids or special operations, but I wouldn't give any credence to this particular report.

Q The State Department today said that extremists in Afghanistan may be planning attacks against U.S. interests.

MR. LEAVY: Yes, the State Department put out, I think, yesterday, a general travel warning. But I think you're referring to the Qatari television story.

Q No, no, no, I wasn't. I was referring to the State Department.

MR. LEAVY: I think, as they've done several times in the last several weeks, given the increased threat from Mr. bin Laden and his terrorist network, they want to make clear to all travelers overseas to proceed with caution.

Q What's the practical application of the airline sanctions? Does that airline operate in the United States?

MR. LEAVY: Yes -- let me just -- the Treasury has identified about $500,000 so far in U.S. money that would be blocked. Beyond that, though, Josh, it's really an important signal to send that we will not allow the infrastructure of these terrorist networks to operate unabated; that we will take action; that when we have identified businesses or persons who are affiliated with bin Laden or supporting his network, we will act.

Just to give you a little bit more, Ariana has regular flights to India and the United Arab Emirates. We'll be talking with those countries in the days ahead to apply similar sanctions.

Q Was that half a million dollars?

Q They don't fly in here?

MR. LEAVY: Ariana does have some money in the U.S., which is now blocked, some assets. And we've identified about $500,000, half a million so far.

Q But they don't fly in and out of here?

MR. LEAVY: They do not fly in and out of the United States that I'm aware of. I'll check that, Mara.

Q Do you have specific information that they, in fact, have done something to supply Osama bin Laden?

MR. LEAVY: The appropriate authorities, both at Justice, State and Treasury made a determination that -- if you remember about a month ago, the President signed sanctions on the Taliban, which basically blocked any of their assets or their business dealings with the United States. Under that provision and those orders, the appropriate authorities were looking at additional entities -- they identified Ariana as one that has supported or is linked to the bin Laden network. They made that determination over the weekend and we're taking the action today.

Q So you do have specific information that they have helped supply materials to Osama bin Laden?

MR. LEAVY: We wouldn't be taking the action today if they weren't affiliated and supporting the bin Laden network and the Taliban. I don't have any specific examples I'm prepared to go into today, but we wouldn't be taking this action if there wasn't significant concern.

Q Do we know his whereabouts?

MR. LEAVY: I don't want to comment on his whereabouts right now. I do know where we want him to be, and that's justice and in New York -- brought to justice. All right.

Q You want to talk about the India --

MR. LEAVY: I'm happy to.

Q What more do we know about the situation with the shootdown of the aircraft, and has the U.S. been in touch with them?

MR. LEAVY: I can't give you any independent confirmation of the airplane shootdown. Our ambassadors in the embassies in both countries have been in touch with both sides. We are urging restraint and prudence. Clearly, no one benefits from the rise in tensions, and when there is an absence of dialogue between the two sides, instances like this can take place. We will be making clear in the coming days that a resumption of the Lahore dialogue is in the interest of both sides and they hopefully can get back to that soon.

Logistical announcements. Stills of in-house pool please gather at briefing room door now for escort to Tour de France photo op.

Q Is there any carrot or other inducement the U.S. can put out there to get India and Pakistan to return to the Lahore process?

MR. LEAVY: Well, I don't think it's for us to try to induce them to get back to dialogue. It's clear that it's in the interests of both sides. The Lahore declaration made clear that economic cooperation, cultural exchanges, putting all the territorial disputes on the table for the two sides to work out are clearly in the interests of both the peoples of India and Pakistan. We've made clear on a number of occasions that the best way to reduce tensions and move forward is direct dialogue between the two parties. So that's where the focus of our contacts will be.

Q David, whether or not you've got independent confirmation of the actual shootdown, have you seen any additional mobilization on either side?


Q Do you see it perhaps as an opportunistic tit-for-tat for the Indian plane that was shot down in the Kargil conflict?

MR. LEAVY: I don't think it's for me to characterize the motives or to be able to confirm independently from here what happened in this specific case. As I said earlier, John, more broadly, no one benefits from increased tensions. No one benefits from an absence of dialogue. No one's security and prosperity will be enhanced from the absence of direct talks. Clearly, it's in the interest of both the people of India and the people of Pakistan, and the international community, if both sides sit down; if both sides can get back to the very positive steps that were taken at Lahore. Prime Minster Vajpayee took the courageous step of going to Lahore -- that he had a very important meeting with Prime Minster Sharif. It's time we get back to that.

Q David, what are these kinds of escalations -- what impact do they have on the President's desire, plans or possible travel to the region?

MR. LEAVY: Well, the President, as you remember when Prime Minister Sharif was here on July 4th made his intention known that he does want to travel to the region. I don't have any dates for you, but I don't think the latest incident today will impact those plans. He believes that it's important to go. We have a lot of interests, irrespective of the latest conflict with both countries. The President wants to go and I think it is his intention to go.

Barry, anything at your end?

MR. TOIV: Maybe not.

Q How willing -- how far is the administration willing to go in compromising on the Republican tax bill?

MR. TOIV: Well, as you know, the President has made it very clear that he thinks we ought to do first things first. He thinks we ought to focus on paying down the debt; we ought to focus on addressing the challenges facing Medicare and Social Security. And then after we've accomplished that and after we've addressed needs relating to defense and education and other priorities, he believes that there ought to be room for a tax cut. It ought to be one that is limited so that we can afford these other priorities.

The Republicans, on the other hand, have passed now a bloated nearly $900-billion tax cut that does not allow the country to address any of these challenges. And the President believes that we need to limit this. And he has said that he is willing to listen to other ideas. Democrats on the Hill have proposed between $250 billion and, I believe, $295 billion in tax cuts. They're somewhat different from his. There are some similarities, but there are some differences. The Vice President has presented some ideas of his own, actually. And certainly the President, once we have addressed these other challenges, the President is willing to listen to other ideas for how you would formulate that tax cut in that range of $250 billion to $300 billion.

Q So no compromise on the total, but lots of compromise possibly on the nature of the tax cut?

MR. TOIV: Well, I don't want to stress that too much because the President's tax cut is aimed at encouraging savings. It's aimed primarily at middle class Americans. He thinks that's the right kind of tax cut, but he's willing to listen to other ideas.

Q But Barry, I don't know if the President is on record on this or not, but if the Republicans send up the Breaux Commission Medicare plan, would he veto that?

MR. TOIV: Well, I haven't seen that -- I haven't seen any --

Q That's under consideration.

MR. TOIV: Well, there's a long way from under consideration to sending it up here. The President has his own Medicare plan, which he thinks is the right way to go. His plan would extend solvency past 2025. It provides for a possible prescription drug benefit. The Breaux plan, I have not seen -- if that's under consideration, that's not something that's been sent up here. But it certainly does not meet the standards that the President's plan does.

Q Just to follow up, if the Republicans send you the tax plan and you veto it, and nothing else happens, you'll be able to pay down the debt, but you won't be able to do what he wants on Medicare or on Social Security. How urgent is it for the President to actually have negotiations with the Republicans this year so those things happen?

MR. TOIV: Well, the President has said he would like to -- when they come back, he would like to get to work on a Medicare plan that actually meets the challenges -- that extends solvency the way that he has proposed, that provides for a prescription drug benefit. He would like to get started on that as soon as we can get started.

Q Right, but you've also said that if nothing happens, it wouldn't be so bad because at least the debt gets paid down automatically.

MR. TOIV: Well, I think what we've said is that if there is no tax cut this year, that would result in additional debt being paid down, that would be far preferable to the $900-billion tax cut that the Republicans have proposed. It is not the President's most desired outcome. The most desired outcome is the kind of structure that I've talked about, which addresses Medicare, Social Security, pays down the debt and does allow for a reasonable tax cut aimed primarily at the middle class.

Q Barry, is the President aware of this latest shooting incident today in California where it appears a teenager armed with an assault weapon walked into a Jewish community center and shot several children?

MR. TOIV: Yes, we've seen the news reports. He just got back, as you know, and I haven't had a chance to talk to him, so I'm not sure if he had a chance to hear about it.

Q -- later today?

MR. TOIV: I don't know.

Q Barry, you have expressed doubts before about going ahead with the tax cut for a surplus that is not yet in hand. What happens if that surplus doesn't, in fact, materialize? What happens to the administration's plan to spend $320-some-odd billion on Medicare?

MR. TOIV: Well, the President's plan calls for paying down far more debt than the Republicans' plan. The President's plan foresees that possibility much more clearly than the Republican plan. The Republican plan is for a $900-billion tax cut that wipes out any of the non-Social Security surplus -- just wipes it out completely, and if the surpluses don't materialize, you're headed into deficit territory.

The President's plan is carefully drawn so that it's far more cautious in how it deals with the surpluses so that, in fact, you could adjust to that.

Q But what do you do if, in fact, let's say you get half the surplus? You're going to give up the tax cut, or are you going to give up the $300 some odd billion you're going to spend on Medicare? Which one goes first? Have you given any thought to --

MR. TOIV: You are so far down the road that I can't quite get there with you. (Laughter.)

Q Well, but you've already made plans to spend the money.

MR. TOIV: We have made plans for paying down most of the surplus in debt. We've made plans for paying down three out of every four dollars in debt to pay down the debt.

Q But you're planning to spend all of the non-Social Security surplus, are you not?

MR. TOIV: We are planning to pay down -- to use three-quarters of it to pay down the debt, and, yes, to use a portion of that amount to length the life of the Medicare trust fund. We think that's an appropriate thing to do.

Q Barry, there seems like there's been a real emphasis in recent days and even weeks on disadvantaged areas of the country -- this event today, the New Markets tour -- and from the administration that is often focused on the middle class, I'm just wondering what accounts for a relatively recent change in emphasis there?

MR. TOIV: I would disagree with you that this is a change in emphasis. This administration has done some very important things to try and lift up people and communities in poverty. I could -- let me just start with empowerment zones and enterprise communities, a program that has provided tax benefits and other benefits to cities and rural areas in an effort to provide economic development there. On an individual level, the Earned Income Tax Credit, which is designed to help low-income working families; the Community Development Financial Institutions, which, like New Markets, is designed to bring capital into poor areas that have not come along with the recovery that's taken place elsewhere. There are a number of other administration initiatives that have been enacted which are aimed at low-income communities, and are designed to help provide economic recovery there.

There's a lot that needs to be done, though, and the New Markets Initiative is one way of going at that problem by relying on the private sector to a large degree -- sometimes in partnership with the federal government -- not only to come into these areas, to come into low-income areas -- not only just for the benefit of those areas, but with themselves having the profit motive, because this is a way of keeping the recovery going and doing more and better business themselves.

Today's event that the President and the Vice President did today was a perfect example of that. This is a program, the BusinessLINC program -- BusinessLINC -- that is going to have larger existing businesses help out new businesses that need technical expertise, that don't have that kind of experience that you sometimes need to keep a business going, to help it thrive. It's going to bring them together. And it's going to be happening all over the country. And we're hoping it's going to be successful.

Q Barry, on -- you mentioned rural areas. On the question of farm aid, has the administration decided to take a different view, yet, on emergency aid to farmers?

MR. TOIV: Different from what?

Q As opposed to disaster relief for drought. The position the Vice President took, as opposed to the administration.

MR. TOIV: Oh, you mean on the legislation that's in the Congress that -- yes, yes. No, we are looking very closely at that. Obviously, the administration believes that there is a long-term problem here, and that is that the so-called Freedom To Farm Act, enacted just a few years ago, took away the safety net for farmers, and the President, since the day he was forced to sign it because had he not signed it, the law would have reverted to the law that had been in place decades earlier, would have been a total disaster for farmers.

The law that he signed at that time, he said we need to fix this problem, and that has not happened yet, and we need to do that. At the same time, we recognize that there is a serious, as we did last year, that there is a serious problem facing farmers now, and we are looking at what needs to be done and on what basis to provide the assistance that clearly needs to be provided.

Q So you have not changed your view on the fact that there is no need for emergency spending over the short-term?

MR. TOIV: We're looking at that, and we're going to determine in the next several weeks what is needed and exactly how much is needed and exactly what basis to provide it on. But the problem with the Republican proposal that's been passed is that it is based on the same principles that govern the Freedom To Farm Act and they don't address the longer-term issues.

Q Well, neither did the Democratic plan for $11 billion in emergency aid.

MR. TOIV: The Democratic plan is designed in a way that while it is not the permanent approach that we need, it is designed in such a way as to meet some of the needs that are directly caused by the Freedom To Farm Act.

Q But you didn't support that, the emergency spending. You didn't support it.

MR. TOIV: Again, we are looking at the needs out there, reviewing it, and we're going to determine what we think it appropriate in terms of providing assistance, and on what basis to provide it.

Q On Lance Armstrong today -- why does the President have stills only and the Vice President has an event before cameras?

MR. TOIV: The Vice President and Lance Armstrong have important announcements to make regarding cancer and cancer research, and I think that is far more worthy of your attention than a photo opportunity.

Q The announcements were more important for the Vice President than for the President?

MR. TOIV: No, I said that the announcements that they're making are more worthy of your attention than a photo opportunity because this is an announcement that the Vice President is making.

Q And why is he making it, though?

MR. TOIV: Why is he making it? Cancer research is an issue that the Vice President has spent a lot of time on and a lot of energy on as Vice President and, frankly, as a member of Congress, as well, and this is an issue that he's worked on and that's why he's making the announcement.

Q More than the President?

MR. TOIV: Well, the President has worked on this issue, too, and in this case the Vice President is making the announcement.

Q Barry, what do you make of Pat Robertson's suggestion that the administration's take out known terrorists like Milosevic and Saddam Hussein?

MR. TOIV: I don't think I need David to get up here to say that we're not going to be changing our policy on that.

Q What's the President's level of concern on the Pakistani shootdown? And is he worried that despite his lengthy conversations with Prime Minister Sharif that there continue to be what appear to be provocative acts between the two countries?

MR. LEAVY: I'm sorry, Jim, can you repeat it? I apologize.

Q What's the President's level of concern on the Pakistani shootdown? And is he concerned that despite his lengthy meetings with Prime Minister Sharif, that there continue to be provocative acts between the two countries?

MR. LEAVY: Well, as I said earlier, the President believes that restraint, dialogue must carry the day, that any additional absence of dialogue is only going to allow for these kinds of incidents to arise. I don't want to express undue alarm here. It's obviously an unfortunate incident. But really, what we have to do is look forward to getting back to the Lahore process. The President's being kept up to speed as appropriate by Mr. Berger.

Q Is Sandy going to call the Prime Ministers, or shouldn't he say something to them, to let them know we're unhappy about this?

MR. LEAVY: Well, our embassies in both countries are carrying that message.

Q David, Secretary Albright, in a piece in the New York Times, said today that the problem in Colombia is a regional problem that needs a regional solution. What does she mean about regional solution?

MR. LEAVY: Well, I think what the Secretary wanted to make clear in the piece today, and what we've talked about in terms of Colombia more broadly, is that the counternarcotics struggle isn't unique to Colombia. It's not unique to the United States. But it's a hemispheric-wide problem and needs hemispheric-wide solutions.

We can work together bilaterally, but we also need to work together multilaterally to meet this challenge. It's not just an issue of growth and consumption, but also trans-shipment, and that there are elements that, if the countries of the region work together, we're more apt to meet the challenge than just going our separate ways.

Q That means that the United States is ready to give Colombia the $500 million that the Pastrana government has requested to the United States?

MR. LEAVY: Well, I believe -- Mike, correct me if I'm wrong -- we're giving $500 million FY'99 to Pastrana's government, and then $600 million in FY 2000. Colombia's the third-largest aid recipient, behind Israel and Egypt, from the United States. So I don't know if there's a specific --

Q The Secretary of Defense of Colombia, less than a month ago, came to the United States to request another $500 million for anti-narcotics --

MR. LEAVY: Let me check on that. Not that I'm aware of.

Q Barry, I've got one more domestic issue. The L.A. Times reported this morning that Vice President Gore told donors, Democratic donors on the West Coast that the government investigation of TV and movie violence was the President's idea and not his, was initiated without his input. Is the Vice President and his staff out of the loop on that?

MR. TOIV: You know, I have to apologize to you because I was supposed to get guidance on that and I did not. I will be here tomorrow. You can ask me again.

Q The White House has repeatedly criticized Republicans for the inevitable draconian cuts that would have to happen in spending were there tax cut to be enacted. Well, there's arguments being made that unless the budget caps are lifted at the end of this fiscal year, nothing is going to be -- none of the spending bills will be enacted into law. Is there a possibility that there might be some agreement on the administration's part to lift the budget caps if the Republicans were willing to go down a bit on their tax cuts?

MR. TOIV: It's interesting that you talk about draconian spending cuts, because that happens on two levels, as you know. First of all, next year, if the President were to sign into law the tax bill that the Republicans have passed in the Congress, the budget sequester that -- technical word, but that's the across-the-board spending cuts that were made a part of the budget law back several years ago which are still in effect, would trigger really very substantial cuts over the next several years in Medicare, agriculture programs, student loan program, and other entitlement programs. That's one level of cuts.

The Republicans just passed this tax cut, and if it were enacted into law, those cuts would be automatically triggered by that legislation.

I think, though, that what you're also talking about is the massive cuts in discretionary spending, like education and other spending, that would be required if -- again, if the Republican tax bill were to pass. And if in the coming fiscal year, though, for fiscal year 2000, the Republicans are working on bills that have unacceptable cuts in education, the environment, and a lot of these areas.

The President's budget, which he presented back in February, and it is still his budget, managed to not raise the caps, managed to provide the investments that the country needs in areas like education, the environment, job training, research -- provided those investments without raising the caps, and we ought to try to stick to that policy.

Q -- ought to and whether you will or whether they will agree to are two different stories. If you were to agree to break the -- revise the cap under the 1997 budget law, so that the limit is higher, so spending could be higher. I mean, can you foresee a scenario where that might happen as a way of sweetening --

MR. TOIV: Well, that's not -- we're not proposing to do that. Now, after -- as you know, the President also proposed once we address Medicare and Social Security and the other issues, the President has said that in later years that we ought to put back some of the money for defense, for domestic priority. However, in fiscal year 2000, he has said there's no need to raise the caps and his budget does not do that.

Where did April go? She was trying to get my attention?

Q I answered it for her.

MR. TOIV: Oh, thank you, Nancy. Anything else?

Q Barry, just one other question -- on tax cuts, you said you want some agreement with Republicans on military spending -- more spending on military and education -- before you even start negotiating tax cuts? Is that what you said earlier?

MR. TOIV: Well, those are -- first of all, the Republican tax cut would not allow us to provide for the additional defense spending that the President has called for. In fact, they would fall about $200 billion short over the next 10 years, and it would also result in deep, deep cuts in domestic discretionary spending -- in education, the environment, and many of these other areas.

We are -- it's our view that, first things first, there ought to be a whole structure that enables you to do all these things. That's one of the reasons, though, that we believe that you have to limit a tax cut to the vicinity of $250 to $295 or $300 billion, because if you go beyond that, then you end up cutting into -- if you don't end up cutting into what we need to do for Medicare and Social Security, and bringing down the debt, then you end up cutting into education, defense, and these other discretionary spending priorities.

Q Why did the President, then, refuse to say on Friday that it should be limited to that number, when he was asked directly about that number? And instead, he went off on this tangent about, well, the Republicans are just doing this in reverse order, and if they go in the order I want, then we can talk, basically, about the number.

MR. TOIV: Well, to tell you the truth, if you go in the order we're talking about -- and that is the way that the President wants to go -- it's, as he has also said, it's just a matter of arithmetic. This is what you come down to. It leaves you with $250 billion to $300 billion to spend after you've addressed these other priorities, to spend on a tax cut -- which he thinks we ought to do, after we do those other things.

Q -- asked specifically if that meant that he wanted them to come down to $300 billion.

MR. TOIV: But he has also -- what he has said is that what he wants to do is look at all those other priorities, and determine what you need for those priorities. And his view is that the amount that he has talked about for these other priorities -- Medicare, Social Security, education, defense -- that once we get past that, what we're going to have left, if you just do the arithmetic, is somewhere between $250 billion and $300 billion. And, boy, I know nobody wants to hear any more about this. (Laughter.)

Thank you.

END 3:15 P.M. EDT