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THE WHITE HOUSE

                     Office of the Press Secretary
                        (Sharm El-Sheikh, Egypt)
________________________________________________________________________
For Immediate Release                                   October 17, 2000

As prepared for delivery

       REMARKS BY THE PRESIDENT'S CHIEF OF STAFF JOHN D. PODESTA
           ON BUDGET AND EDUCATION TO THE NATIONAL PRESS CLUB

                            WASHINGTON, D.C.
                            October 17, 2000

Good morning. Now, I've come here today to talk about where we are and where we need to go in these final days of negotiating the fiscal 2001 budget. But before I get into that, I'd like to say a few words about the events that have been unfolding in recent days.

Just last night, we were saddened to learn of the tragic loss of our friend and partner for progress, Missouri Governor Mel Carnahan. Mel spent four decades in public service, fighting for health care, for economic development, and for better schools. I know he will be missed by the people of Missouri and by so many other Americans he touched over the years.

Last week, we lost seventeen brave soldiers in an apparent terrorist attack on the USS Cole. This tragic loss reminded us that, even when America is not at war, our men and women in uniform risk their lives in the cause of peace.

And on this day of sad news, we've also received some hopeful signs from Egypt. Only a few hours ago, President Clinton announced that Israel and the Palestinians had agreed to take immediate steps to end the current confrontation between them -- to stop the recent wave of violence and bloodshed. They've also agreed to work with us in consultation with the UN Secretary General on a fact-finding committee to determine how and why the violence happened and how to prevent it from happening again. After all that's occurred, I don't need to tell you that the road ahead will be difficult. There's no guarantee of success. But as the President has reminded us time and time again, not to try is to guarantee failure. And I'm very proud that the President went to the Middle East under these difficult circumstances and has helped the people of this troubled region begin to find their way back to the path of dialogue.

Now, as I said, I'm here this morning to discuss this year's budget. It is happening in a new era of budget surpluses, in the hot-house environment of an election year, and it is being fought over the issues that will affect America for years to come -- from bringing prosperity to every corner of our nation to meeting the challenges of the Aging of America. At the end of this budget process, if the President has anything to say about it -- and I believe he will -- we will have a budget that's fiscally responsible, reflects the values of the American people, and invests in the future, especially in the education of our children.

In the last few weeks, we have started to make some progress for the American people.

Congress passed -- and the President signed -- an historic Interior Appropriations bill that for the first time sets up a dedicated and protected fund to buy and protect precious land -- from neighborhood parks to pristine wilderness.

We also negotiated a Transportation Bill, that among other things, will help set a national drunk driving standard at .08 percent blood alcohol content -- a change that will save hundreds of lives every year.

We've put together a VA-HUD bill that makes a number of important investments in America's future. First, it funds the President's Enterprise Communities and Empowerment Zones initiative, to help bring new investment to our most hard-pressed communities. It includes funding for 79,000 new housing vouchers for low-income families -- nearly 20,000 more than last year. It increases funding for the cutting-edge research being conducted at the National Science Foundation, for the space explorations of NASA, and for technologies to increase fuel efficiency to help reduce our dependence on oil. It included an historic increase in funding for Veterans' health care and benefits. Lastly, the bill makes critical investments in protecting our environment.

And in July, we passed a Defense Appropriations bill to keep our military strong and prepared to defend America's interests around the world.

All this shows that we can make progress, even in an election year. That's the good news. The bad news is that we haven't made anywhere near enough progress, and time is running out. We are already more than two weeks past the end of the fiscal year, and Congress has yet to complete and send to the President eight out of thirteen spending bills. Because of that, the President has had to sign three continuing resolutions in order to keep the government open for business. And it is now clear that Congress will ask him for another one at the end of the week.

How did we get bogged down again this year? Back in January, House Speaker Dennis Hastert vowed to pass appropriations bills on schedule. It didn't happen. Congressman Tom Delay said Congress would finish the bills before the start of the Republican Convention. The Convention came and went and 11 of 13 spending bills hadn't even been sent to the President. Majority Leader Dick Armey said the plan was to adjourn by October 1st. Another broken promise. The fact that they've blown one deadline after another hasn't stopped them from taking one five-day weekend after another.

Why couldn't they deliver on their promises? I think the explanation is obvious. The Republican leadership and President Clinton have a basic disagreement about the fundamentals of an effective government. The Republicans would rather not draw attention to this disagreement -- because their position is at odds with an overwhelming majority of the American people. So instead, time and again, they defer, dodge and delay. The majority party simply cannot commit themselves to President Clinton's strategy of fiscal discipline, targeted tax cuts, and important investments in our people that has brought our country from an age of deficits to an era of surpluses. The budget that President Clinton sent Congress back in February remained true to that strategy. It was a balanced budget that would strengthen Social Security and Medicare, put America on-track to pay down the debt by 2012, while at the same time making key investments in education, technology, the environment, and health care, including adding to Medicare a voluntary and affordable prescription drug benefit.

The Republican majority took a very different path. They spent most of 1999 concentrating on a big, bloated tax cut plan that President Clinton rightly vetoed. They spent most of this year attempting to put this humpty dumpty tax scheme back together again, piece by piece. The result: wasted time, wasted effort, and wasted opportunity. Not withstanding their solemn pledge to the American people, it was simply impossible for them to pass a realistic and responsible budget in a timely manner.

We see that every day as their spending bills are loaded up with record amounts of pork. Now of course every year there's a certain amount of unnecessary spending. We all know that. But this Republican Congress is breaking new records. Don't take my word for it, listen to Republican Senator John McCain, the person the Republican leadership named as their watch dog of wasteful spending. Well, here's his review of their efforts. He says that pork barrel spending this year is "the worst ever -- a free for all."

Every dollar of unnecessary pork spending is another dollar not going to our most pressing priorities, especially something that is essential to keeping our economy strong: paying down the debt. As you've heard the President say many times, paying down the debt will keep interest rates down, investment up, and the economy growing. But it only works if you keep at it over the long term, and the Republicans can't seem to think that way.

The President makes debt reduction a habit, not a gimmick. Republicans are talking about debt reduction in an election year. The President remains committed to debt reduction every year. That's why his budget plan puts us on a path to paying down the publicly held debt entirely by 2012.

Every homeowner knows, to build a house you need a strong foundation. And that's what Congress needs to do in this budget -- build a strong foundation for America's future. They need to pass a criminal justice budget that gives us safer streets and stronger communities, that puts 50,000 more community police on the streets and cracks down on dangerous gun criminals. They need to pass the President's New Markets Initiative, to give businesses the same incentives to invest in our new markets at home that we give them to invest in poor countries overseas.

They need to pass a budget that enforces civil rights, and ensures stronger efforts for equal pay for women, insists on fairness for immigrants, and closes the digital divide. They need to pass a budget that funds our diplomatic efforts abroad, and helps secure our embassies against terrorist attacks, so that America can continue to lead the world in the 21st Century.

Most importantly, we need to invest in our number one priority -- the education of our children. And we must ensure that our dollars are used to produce real results -- so that our children can learn in classes that are smaller and in schools that are modern, not crumbling to the ground.

The average American school building is now more than 40 years old. At least 60 percent of the schools in every state are in need of repair. And studies have shown that overcrowded and antiquated classrooms get in the way of learning. If we expect students to lift themselves up, we shouldn't put them in schools that are falling down.

The President has called for tax credits to help communities build or modernize 6,000 schools, and grants and loans for emergency repairs in 5,000 schools a year for five years. We have a bipartisan majority in the House of Representatives ready right now to pass school construction tax credits. Unfortunately, the Republican leadership continues to stand in the way and refuses to bring it to a vote.

The leadership is also dragging its heels on increasing our investment in afterschool programs. Study after study shows that afterschool programs increase student learning and keep children safe and off the street during the late afternoon hours when many parents are at work and juvenile crime soars. Today, I am pleased to announce a new Education Department study confirming the positive impact of national investments in afterschool. Highland Park, Michigan, for instance, has seen a 40 percent drop in juvenile crime in the neighborhood surrounding its locally-run, federally-supported afterschool program. Students in a similar program in Brooklyn, New York saw their grades rise in one or more subjects by five points on a hundred-point scale.

The evidence is overwhelming: investments in afterschool make sense. Yet the majority party's education budget denies afterschool programs to over 1.6 million children who would get it under the President's balanced budget proposal. It also shortchanges efforts to improve teacher quality. And their budget also fails to ensure progress towards hiring 100,000 quality teachers to reduce class sizes in the early grades.

And, most amazing of all to me, the majority's budget invests nothing to help states turn around failing schools or shut them down and reopen them under new management. How many times have we heard Republicans say they want to make our schools more accountable? Well, here they finally have a chance to put their money where their rhetoric is. And they won't do it.

The President, however, will insist upon it. Not because of politics. Not out of pique. But because he believes in it, and because he believes it's right for the country. This should come as no surprise to the Republican leadership. You can look it up in this year's budget -- in the State of the Union Address -- in the President's HOPE Scholarship program -- in our expansion of Pell Grants and Head Start -- in the President's program to bring down the cost of student loans. The President's commitment to his education budget is unwavering, and we will stay at the bargaining table until we have done right by America's children. This is no time to turn back.

We all know that at the end of this process we're going to have a budget. After all, it's in the Constitution. But there are legal obligations and moral ones. There are things you must do, and things you ought to do. Unfortunately, this Congress has deferred, dodged, and delayed on things it ought to do. Congress must pass a budget, but it ought to pass hate crimes legislation. It ought to raise the minimum wage. It ought to enact a real Medicare lockbox, no leaks, no loopholes. It ought to pass an affordable, voluntary prescription drug benefit. Instead of passing a strong, enforceable Patients Bill of Rights, Congress is giving billions of dollars more of Medicare money to the same HMOs that have fought tooth and nail to defeat patients protections. And Congress is doing this without any guarantees that the HMOs will make long-term commitments to the seniors they serve. And as they are increasing payments to HMOs by billions of dollars, they are refusing to fund priority beneficiary, hospital, home health, and other health care provider initiatives. They can increase payments to HMOs -- but they can't seem to find the funds to provide health care for legal immigrants, and for children with disabilities. So today, Secretary Donna Shalala and OMB Director Jack Lew are recommending to the President that he veto this legislation should these untargeted, excessive, and unaccountable HMO payment increases continue to crowd out critical beneficiary health care provider policies.

Yes, it's late in the game. But we're putting some runs on the board. And in the post-season, plenty of games are won in the bottom of the ninth. We can achieve a big victory for the American people if we put our partisan differences aside, let the bipartisan majority of Congress work its will, and put the future of America's families first.

Thank you.

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