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                     Office of the Press Secretary
                     (Edgartown, Martha's Vineyard)
For Immediate Release                                    August 25, 1999
                           PRESS BRIEFING BY
                              JOE LOCKHART

                            Edgartown School
                      Edgartown, Martha's Vineyard

11:45 A.M. EDT

MR. LOCKHART: Good morning, everyone.

Q Good morning!

MR. LOCKHART: Thank you. Okay, well, I am glad to welcome the television cameras here today. I think the objection raised yesterday was right. I was happy to do it yesterday, but I wasn't dressed properly. Today I've got a button-down shirt on, a nice jacket -- oh, and my glasses, sorry. (Laughter.) Okay, questions? Ready for television.

Anyway, try to be serious. Let me just bring you up to date on one thing that's going on back in Washington. Jack Lew, the Budget Director, is doing a briefing as we speak, and I think most of the news organizations here have someone there. They certainly were all invited in Washington. They are releasing today the second sequester report from the Office of Management and Budget, which is basically something that was mandated in the Budget Enforcement Act of 1990. Three come out each year. Again, this is the second.

The sequester report looks at the impact on mandatory spending, or this report looks at the impact on mandatory spending of the Republican past tax cut and the budget and the appropriations process. And it's actually quite an interesting report, given the debate that is going on now about tax cuts. I think the highlight of the report is, if the President were to sign the Republican tax package as written, over the next five years they would trigger across-the-board cuts in mandatory spending, including $41 billion from Medicare, $19 billion -- more than $19 billion in farm programs. It would eliminate veterans' readjustment education and training benefits by $3.2 billion. It would cut student loans. It would eliminate child support enforcement by cutting $10.3 billion. And finally, it would eliminate social services block grants, cutting $4.4 billion.

Now, that's just in mandatory spending. We have talked in the past about discretionary spending, and in a letter that the President will send today to Senator Lott, Majority Leader Lott, and Speaker Hastert in reply to a letter that he received last week, he will detail the unacceptable nature of the more than 50 percent cuts that would be required in discretionary domestic spending by passing the Republican tax budget.

So we will have a copy of the sequester report, a one-page fact sheet on it, and the letter that the President has sent at the end of this briefing. And I think, if you want some further detailed information on the sequester report, again, many of you have representatives speaking to the OMB Director Lew now and we'll be glad to make him available.


Q Joe, has the President sent a letter to the Foreign Ministry in Ecuador pledging his support for debt relief for Ecuador?

MR. LOCKHART: I'm not aware that a letter has been sent. I know that there has been a good bit of discussion in the financial community in the last week or so on the debt problems there and the potential for default, but I'm not aware that a letter has been sent. I'll check on that, though, for you.

Q Joe, I think it was reported yesterday that certain island conversation groups have been pursuing the President -- this week about the move to -- and I'm wondering if the President is going to say anything, take a position on this. After all, the First Family's business here --

MR. LOCKHART: Well, I'm not aware that they've made a pitch to the President. I mean, I'm glad to, as his representative, receive any information that they might have and make him aware of it. But that hasn't happened yet, so I'll be anxious to see the case they want to make and certainly pass it along to the President.

Q Back to the sequester report, this is based on the tax plan that has already been passed. What about the spending stuff? They've only passed two of the 13 --

MR. LOCKHART: Right. I think there are some things in the report that go to -- again, there are three reports per year. Generally one early in the year, one during the appropriations process, and then one 15 days after Congress adjourns. So I think what is more interesting here is what we now know based on what they passed as far as their tax bill. I didn't spend much time looking through the appropriations part.

But the main point is we've spent a good bit of time talking about how risky the tax scheme that they've passed and how it will force -- reverse our fiscal discipline, force a rise in interest rates, force unacceptable 50-percent cuts in domestic spending. But when you look at the mandatory spending side of things, which the OMB has done today, you're going to see very quickly across-the-board cuts by the way in which they passed the tax legislation.

Q Yes, but they've raised spending caps, or takes them away, and that changes the equation.

MR. LOCKHART: They passed a piece of legislation that doesn't waive the Budget Enforcement Act and they had a hard enough time getting 50 votes for this. They need 60 votes to waive the Budget Enforcement Act provisions from earlier in the '90s, and it just indicates how there really isn't support.

I mean, what's interesting, if you look around over the last several weeks, there are a lot of people, even people who voted for this bill, who don't seem very excited about it. My favorite quote comes from Senator McCain. He said, "It galls me and enrages me when you see all the tax breaks for special interests. It's a cornucopia of good deals for special interests and a nightmare for common citizens." Well, we couldn't agree more.

Q Well, Joe, how big a surplus does there have to be before this administration would say the American people are entitled to an across-the-board tax cut?

MR. LOCKHART: I think what this administration has said and has been consistent on saying is we need to do first things first. We need to take this opportunity that we have of an historic surplus and make sure that we've taken care of Social Security and we've taken care of Medicare. We believe that you can do both of those things and do a tax cut. But certainly you can't do it the way the Republicans have put it forward, because if you look at what they've passed in the context of the size of the surplus and the reality of domestic discretionary spending -- because I don't believe that you'll find a Republican in this country or anyone who supported this bill who will stand up and say they support a 50-percent cut in the FBI, they support a 50-percent cut in the FAA, they support a 50-percent cut in education programs -- they just won't do that because it's just not going to happen.

So then you have to go to what will happen. What will happen is after this tax cut uses 100 percent of the non-Social Security surplus, and when they go looking for money, the only place they will be able to find it is in the Social Security surplus. And the President won't let that happen.

Q Joe, have you all detected any progress by the Republicans as they've been out trying to sell their tax cut plan during the August break, and is the release of this report in any way related to their campaign to try to persuade --

MR. LOCKHART: Well, the most interesting thing about their campaign is they seem to have gone out to America and found out something that I think we already knew, that the public agrees that we want first things first. And it's certainly our hope that they will come back to Washington in a different frame of mind, ready to do first things first -- look at Social Security and Medicare -- and then do the kind of tax cut that the President and the Democrats have put forward.

I think it's been an education, we hope, to many members. I think if you look through the newspapers you'll find quote after quote from Republican members who have gone back home and found that their constituents want them to deal with Social Security and Medicare, and believe that that's the right priority. Get that done and then we'll talk about the tax cut.

Q What about the timing of the release and the report?

MR. LOCKHART: Oh, the report -- the report comes out three times a year. Generally, this is about the time the second report comes out. But I think it's important that members have a chance to look at the impact of the legislation that they've passed as they come back and we try to work out and craft some legislation that the President can support.

Q Joe, when the surpluses first became evident you said first things first. And then a couple of months ago that midsession review came out and it projected an extra trillion dollars and you said, first things first. Let's go back to Mark's question -- how big does the surplus have to be before there will be an across-the-board tax cut?

MR. LOCKHART: I think my answer applies to both the way you asked it and the way Mark asked it, because it's the same question. These are projections. They are the best projections. We believe in them, we have fundamental faith in the validity of them, because I think OMB has an excellent track record over the last seven years.

But the question here is, given where we are in 1999 and given the opportunity that's been presented to us because of the fiscal responsibility of the last seven years, how are we going to move forward. And the President believes the right way to do things is to dedicate a good portion of the surplus to Social Security and Medicare and provide in the area of $250 billion in tax relief, rather than doing it the other way. And the other way, in this case, is the Republicans saying that we can have a tax cut and we can worry about everything else later.

Q Joe, can you give us a vacation update and also tell us if Mrs. Clinton's feeling better?

MR. LOCKHART: I know that yesterday they spent most of the day around the house. I think they spent most of the afternoon at the beach over by the house, so I would extrapolate from that that she was feeling a little bit better. And I know that they intend at this point to spend most of today the way they spent yesterday, relaxing around the house.

Q Joe, if you don't know about this supposed Ecuador letter that was sent, do you know if the President has taken a position on whether or not the Paris Club should reschedule Ecuadoran debt?

MR. LOCKHART: I don't. I can check into that.

Q Joe, have you heard anything back from the Puerto Ricans about whether they're going to accept the terms of the President's offer of clemency?

MR. LOCKHART: No. I would put that question to the Justice Department who are following it on a more regular basis than I am.

Q And if I can follow up, what does the White House have to say about the comments from Mr. Richard Pastorella (phonetic) who was the officer blinded in the 1982 explosion that was set off by this group? He's called the whole thing pandering to the Hispanic community.

MR. LOCKHART: I would take exception and I would refer him to my comments yesterday.

Q But we didn't have your comments yesterday on camera, Joe. Would you mind repeating them?

MR. LOCKHART: No, that's okay, I'll refer him to yesterday.

Q Has the President been working on his race report?

MR. LOCKHART: I have promised several people that I would check on that. I have not yet asked him about that; as soon as I do, I will report to you.

Q Can I ask about the arrest of the Chief of Staff of the Bosnian Serb Army in Austria -- he apparently was arrested as he was attending -- on an indictment by the War Crimes Tribunal -- as he was attending a conference on how to merge the Bosnian Serb Army with the Muslim Croat and other non-Serb forces. If the guy is trying to work out a means of cooperation, is this a good time to --

MR. LOCKHART: I don't know the details of that. I have not seen that report. But I can tell you that we and our allies have been very aggressive about pursuing those who have been indicted on war crimes and we will continue to be.

Q Joe, does the President think that the Fed was justified in raising interest rates yesterday? And can you answer the question without saying "we don't comment on Fed actions"?

MR. LOCKHART: The President has expressed no view to me on that subject, as is traditional, on a case involving the Fed. (Laughter.)

Q Joe, can you tell us if the President has talked to any congressional leaders during the vacation about his plans for dealing with the fall budget crisis?

MR. LOCKHART: Not that I'm aware of. I know that he had a conversation last night with Senator Feinstein who has just returned from a trip to China, and she wanted a chance to talk to him about the meetings she had there. So I think they spoke last night. But I'm not aware of any calls on the budget, on budget or tax issues. He's talked to John Podesta, the Chief of Staff, on a fairly regular basis as well as talking to Sandy Berger on some national security issues. But I'm not aware that he's reached out to any members of Congress in particular.

He's run into a few here. I mean, he had a nice conversation the other night at the fundraiser with the hospital with Congressman Delahunt, but I think it was more social than business.

Q Are you aware of any plans to call while he's on vacation?

MR. LOCKHART: I think as we get closer to the time we're coming back, it may be useful for him to reach out to some members of Congress, and if he does that we'll report to you.

Q What about preparation for the APEC visit, particularly -- the APEC visit and particularly the meeting with Jiang Zemin?

MR. LOCKHART: I think as we get closer to the time, that will be more intense. But he is getting a national security briefing each day, some of which has to do with APEC and also with our U.S.-China relations.

Q Could you tell us any other plans for week, besides reading from his book list?

MR. LOCKHART: I expect that the President will probably be on the golf course tomorrow, and I know he's got a social function tomorrow evening that's a traditional clambake that they attend each year when they're up here. Beyond that, the only thing I can tell you--

Q Is that at the residence, the house --

MR. LOCKHART: Close, I think. I'm not sure that's the exact name, but it's the same one that he's been at the last couple of years. The only other thing that I know of for sure is that he'll be here at 10:06 a.m. Saturday morning to do the radio address.

Q Do you have the subject, Joe, the subject of the radio address?

MR. LOCKHART: No, I don't know yet.

Q What sort of briefing are you going to do for the APEC trip, briefing the press?

MR. LOCKHART: I'm sure we'll do the normal Mr. Berger, Mr. Sperling and any others who have something to add in the Briefing Room. My guess is, we'll probably have to do that Monday or Tuesday -- Tuesday. That's not next Tuesday, it's the following Tuesday.

Q -- with his lockbox, Joe. (Laughter.)

Q Joe, do you know if Mrs. Clinton is hearing from any aides or strategists or any other sort of meetings on her part?

MR. LOCKHART: I don't know the answer to that question. It wouldn't surprise me if they had -- were not touching base on a regular basis, but I just haven't talked to her about that.

Q Richard Holbrooke -- leaves for Kosovo on Friday -- trips like that, trips Secretary Albright would do --

MR. LOCKHART: I think we very much look forward to having a diplomat of the high level and caliber of Mr. Holbrooke, and it's certainly our good fortune to have him be able to represent the United States abroad, whether it be in areas that he traditionally has worked on, the Balkans and others, and even in areas that he has not traditionally worked on.

I think as his comments indicated or expressed in some of the newspaper stories after his first day, it's very important that we have him there to represent the United States at the United Nations, but he's also very important as a spokesman and ambassador for the United Nations to articulate around the world and even here at home the important work that the United Nations does. So it's a long way of saying, yes, I expect him to take more trips like that.

Q He told Congress that -- his main job is to satisfy the U.N., Congress and the administration.

MR. LOCKHART: Well, I think it's proven to be a difficult job because of the intransigence of some Republican leaders about paying our dues and catching up with the arrears to the U.N., but I think we've made progress on reform within the United Nations. It's been contingent upon -- our participation has been contingent upon making reforms, and it's our hope that with Mr. Holbrooke there now, Ambassador Holbrooke there, we'll make further progress quickly.

Q Joe, does the U.S. know what was responsible for the explosion in Afghanistan yesterday?

MR. LOCKHART: No. We're aware of the explosion, but we're not aware of the origins of that explosion, beyond knowing that it was not something that we were involved in.

All done? See ya. I've got no stunts for tomorrow, so can we go back to off camera? (Laughter.)

THE PRESS: Thank you.

END 12:10 P.M. EDT