THE WHITE HOUSE
Office of the Press Secretary
REMARKS BY THE PRESIDENT ON THE BUDGET The James S. Brady Press Briefing Room
12:37 P.M. EST
THE PRESIDENT: Good afternoon. I wanted to take this opportunity to say a few words about our latest budget projections and what they say about the continuing strength of the American economy.
We began eight years ago to put our fiscal house in order at a time when the federal deficit was $290 billion and rising and the national debt had quadrupled in the previous 12 years. Interest rates were high, growth was low and the confidence of the American people was shaken.
Our new strategy of fiscal discipline, investing in our people and expanding trade has helped to bring us the longest economic expansion in history, that has given us the chance along with continued fiscal discipline to balance the budget, to turn decades of deficits into the biggest back-to-back surpluses in history.
Over the past three years, we have paid down our national debt by $360 billion. Today, we received more good news. Our updated projections show that in this fiscal year alone we expect to pay down the debt by an unprecedented $237 billion, meaning that over the course of just four years, we will have paid down the debt by $600 billion.
When I took office, our nation's debt was projected to be $6.4 trillion this year. At the end of this year, it will instead be $3.2 trillion, one half of what it was projected to be. It will be 31 percent of our annual gross national product. In 1993, it was 50 percent of our gross national product.
In interest rates savings alone, there will be in one year -- this year -- $166 billion. We are spending -- this year, we will spend $166 billion less in interest on the debt than we were projected to be spending eight years ago.
There is more good news in these numbers. Let's start with what the budget experts called the baseline. That's a budget that just increases with inflation and no new initiatives. The new projections show that if we took that budget and committed the entire surplus to reducing the debt, we could make America debt-free by 2009.
Of course, no one is suggesting that any administration and Congress will go that long with no new initiatives. I have often said that I believe we should use a portion of the surplus to make critical investments in education, provide a prescription drug benefit through Medicare to our seniors and have a targeted tax cut.
If the incoming administration and the new Congress make such decisions, they could still get us out of debt early. And I want to emphasize, obviously, it is for the incoming administration and the new Congress to decide exactly which projects to address and in what manner. But these new projections mean that a fiscally responsible approach that includes new investments similar to the ones I described would still permit us to make America debt-free by the end of the decade -- in other words, two years earlier than the last time we met.
Therefore, even though I told you I would never draw on another one of these charts -- (laughter) -- because there is more good news, I'm going to do it. But this is the last time I will do it -- (laughter) -- this year. It means we can get out of debt by 2010. Now, that is a future that all Americans can look forward to. And we don't wait to reap the benefits of this sort of debt reduction. By paying down the debt, we have already helped to keep interest rates down.
This is an amazing thing. Secretary Summers told me this before I came out here. After eight years of very strong economic growth, long-term interest rates are about 2 percent lower than they were when I took office. That's meant lower mortgage payments, lower car payments, lower student loans, lower business loans. It has freed up more capital for private sector investment. We aren't borrowing the money that people thought we would be borrowing in the government, and that means there is more money for others to borrow at lower cost.
If we stay up on the path that got us here, by 2010 we will free up 12 cents of every dollar the American people pay in taxes that can go back to them in tax relief or can go into investment in our common future. And that is a profoundly important thing. Just think of it, in nine years, 12 percent of the federal budget now committed to interest on the debt could be gone, and that money then would be free for tax relief or for investment in our future.
I think, as I have said many times, that as these interest rates go down, some of this money ought to be dedicated to Social Security, because no matter what path you take for preparing for the retirement of the baby boom generation, any of the proposed scenarios have a significant associated costs. And one of the ways to do this and a way that is painless to the American people is to take advantage of the fact that you're not going to be making interest payments that previously would have been made.
This shows the long-term consequences of a long-term responsible budget policy. There are huge economic benefits. And if we continue, then we can honestly say for the first time since Andrew Jackson was President in 1835, the children of America will face the future unburdened by the mistakes of the past. That is something that I believe we ought to do. The American people have earned an unprecedented opportunity to build that kind of America for our children and I hope we will do it. Thank you very much.
Q Mr. President, since last we asked you about the Middle East yesterday, there have been a number of developments. There have been bombings in Tel Aviv, an ambush. Prime Minister Barak did not go to that summit meeting in Egypt. What does that make you think about the prospects for nailing down a final agreement while you're still in office?
THE PRESIDENT: Well, first of all, I condemn the violence. And I believe it is the violence and the bus that prevented the Prime Minister from going to Egypt; I don't think it is a lack of desire to pursue the peace process. Chairman Arafat is consulting with President Mubarak and I believe wants to talk to some of the other Arab leaders.
The important thing to note is that Israel has said -- I put some ideas on the table. They go beyond where we were at Camp David; they meet the fundamental needs that both sides expressed at Camp David. And the Israelis said that they would agree to try to close the remaining gaps within the parameters of the ideas I put forward if the Palestinians will agree. And I think that this latest violence only reminds people of what the alternative to peace is.
Look, I expect there to be more in the next few days, as long as we're moving toward peace. There are a lot of enemies of peace in the Middle East, and there are a of people that have acquired almost an interest in the preservation of the status quo and the agony of the Israelis and the abject misery of most of the Palestinian population.
So I expect that we will have to continue to combat violence. But if we can get a peace which meets the fundamental longstanding desires of both parties, and we start to have common efforts in security that go even beyond what we've had for the last few years, and we start to have common efforts to build an economic future that benefits everyone, we will have more political and economic stability and we'll have a different future. But in the meanwhile, this thing has been going on a long time and a lot of people don't want to give it up. And so they're going to try to disrupt it.
But if you just look at the last few months, it's the best argument for going ahead and finishing this. It's not going to get any easier. So this is by far the closest we have ever been. We are much closer than we were at Camp David. But there are still differences and we're just waiting. If the -- the Israelis have said they will meet on these conditions within the parameters that I laid out; if the Palestinians will, and the Palestinians are negotiating -- or talking -- excuse me -- with the other Arabs, and we'll just see what happens.
Q Mr. President, did the President-elect have any influence on your decision not to go to North Korea?
THE PRESIDENT: No. He said -- actually, we had a very, very good talk about it, and he did not discourage it at all. And it would not be fair to put that on him. Let me just say, I briefed him on what I was doing. I told him that Sandy Berger and Secretary Albright had talked to General Powell and Condi Rice about it, and I explained what we were trying to do. But I also told him that I wouldn't take the trip unless I thought that I had time to organize it and devote the time to it to make it right, because I was convinced that because of the leadership of President Kim in South Korea, and because of the very good talks that we have had with the North Koreans and the success we've had now for six years on the nuclear issue, that further progress could be made and that it might just have to be something that was done when he became President.
And that is the conclusion I made. We've made a lot of progress with the North Koreans. On what we're discussing now, on the missile issues, we've made a lot of progress. But I concluded that I did not have sufficient time to put the trip together and to execute the trip in an appropriate manner in the days remaining.
Q Were they willing to go for a halt in the missile --
THE PRESIDENT: I think that's all I should say. We made a lot of progress with them, and I believe that the next administration will be able to consummate this agreement. I expect visits back and forth. I think a lot of things will happen, and I think it will make the world a much safer place. I feel very good about what we've done. I simply concluded that in the days I have remaining I didn't have the time to put the trip together in the proper way and to execute it in the proper way. And so that's why I decided not to go.
But you should not infer from that that I'm concerned about it. Indeed, I'm very pleased with the progress that has been made, and I expect the next administration to build on it. And I think they'll be pleased, too, when they look at the facts.
Q Mr. President, in your remarks on the budget you almost seem to be addressing an audience beyond this room, beyond most people on television. You seem to be addressing your remarks to the next administration. Do you think -- what impact do you think a tax cut of the proportions that George W. Bush campaigned on would have on the course of the arrow on your chart?
THE PRESIDENT: Well, first, I don't think it's appropriate for me to comment on the specific decisions they will have to make -- and the Congress will make. But you can't see any of this in isolation. You have to say -- the real issue on the fiscal side is, what is the revenue estimate; are you being conservative? We always were, and even these reflect, by the way, pretty conservative estimates -- because you can always have a bad couple of years and it throws everything off.
And then it's not just a question of a tax cut; you have to ask yourself, in all these things -- when you all are doing the math in your head you have to do the tax cuts plus whatever extra spending there will be, plus whatever you do on Social Security. And it's the aggregate amount of money here, it's not just a question of the tax cut.
So I don't really think I can comment, nor do I think I should comment on the specifics. I'm more interested in the big picture, the arithmetic issues. But I'm just saying that I believe that as long as we can do so, we should be shooting for a debt-free America by the end of the decade, because I think that that will strengthen our country enormously.
Q Mr. President, what can you tell us about the Clinton family debt picture? Is there a new house in your future here in Washington, D.C.?
THE PRESIDENT: Well, I hope so. Hillary has got to have someplace to live. But we don't have -- we haven't closed a deal yet. When we do we'll let you know. She needs an address, and I'd like to have someplace to come see her. (Laughter.)
Q Will you be able to afford all that, Mr. President?
THE PRESIDENT: Well, I hope so. I'm going to go out and go to work. And --
Q Where? (Laughter.)
THE PRESIDENT: I expect to make a living and I'll get out of your hair and get out of the media spotlight and go back to making a living. And I expect to -- I'll do a -- well, I'll write a book and do a few other things. But I think --
Q For $8 million? (Laughter.)
THE PRESIDENT: I think I'll be able to support her. I don't know. I don't have two best-sellers to my credit like she does, so I don't know.
Q Mr. President, back on the Middle East. Two elements seem different now than were present at Camp David. First of all, the outlines of peace proposal are open, and you want* to take a look at them. And second, there seems to be much more of an effort to involve Arab leaders as the negotiations move forward. Those two things were not present at Camp David, yet the Palestinians still are holding back. What do you think is holding them back, and what do you think would push them across the line and move this forward?
THE PRESIDENT: Well, I think the -- first of all, I think that while we have talked to all of the Arab leaders, I'm not sure that Mr. Arafat has gotten to talk to enough of them. I think that he believes that -- he has always believed, I thought, that he was representing not only his people, but the larger Arab world, and in some ways the larger Muslim world in the Jerusalem issues. So I think that he's trying to work through that.
But I don't think, as I've said repeatedly over the last several years, I think when you're in a period like this -- that is, where we're sort of -- the thing is in gestation and it's either going to go forward or it's not -- I think that the less I say about it, the better.
Q Is your decision not to impose sanctions on Japan for their whaling program a reflection of the fact that you view your friendship with Japan more important than the environment? And as a follow-up, how do you expect a Bush administration to go through with Japan-U.S. trade relations?
THE PRESIDENT: Well, the first thing is, the answer to the first question is, no. We're working this whaling issue. We have serious disagreements with them about it, and we have some options that we're pursuing. But is our security relationship with Japan important? Of course it is. Is our larger economic relationship important? Of course it is. Is this whaling issue a big deal? I think it is.
So I'm trying to leave this situation in the best possible light for my successor to look at all available options and go forward. That's what I'm trying to do.
Q How can you impose sanctions when the deadline has already passed?
THE PRESIDENT: Well, there are lots of other things that can be done on this, though, in the future, and I did what I thought was right, given all the factors involved. But I still think this whaling issue is an important issue and I think that -- I understand the role it has in Japanese culture and the political impact of the interests that are involved in it. But I think they are going to have to modify their practices.
Q Are you going to sign the World Criminal Court Treaty?
THE PRESIDENT: I haven't decided that. I have a couple of days and I'm getting a last paper on it and then I'm going to discuss it with our people.
Q Back to the Middle East. Have you given the Palestinians any sort of deadline to give you an answer, or are they going to be given an unlimited amount of time to decide? And also, do you expect them to come here? Do you need to talk to them again before you can see if they are making headway?
THE PRESIDENT: Well, first of all, I think it is obvious we are all operating under a deadline. We're all operating under a deadline; it's just some of us know what our deadline is.
What I have said to them is, there is no point in our talking further unless both sides agree to accept the parameters that I've laid out -- not because I am trying to dictate this, but because I have listened to them for months and months and months -- indeed for eight years -- and this is the most difficult of all the issues I've dealt with. If there is a peace agreement here, I'm convinced it's within the four corners I laid out.
And then there are still -- they both have legitimately a lot of questions and they ought to ask those questions and get answers to them. But there is no point in even doing that unless we've got a basic framework so we can close. The time has come to close here. And the last several months have shown us this is not going to get any easier and prolonging it is only going to make it worse. So I'm doing my best to facilitate what I think is what they want, which is to try to resolve this.
Q Do you really think you can resolve it in the remaining -- are you really optimistic that you can resolve it in the remaining three weeks? And, if you cannot, would you keep at it after you leave office?
THE PRESIDENT: Well, the answer to your first question is I think that if it can be resolved at all, it can be resolved in the next three weeks. I don't think the circumstances are going to get better. I think, in all probability, they'll get more difficult.
In terms of what I do when I leave office in the way of official work like that, that will be up to the next administration and any parties there or anywhere else in the world. That would not be for me to say.
One of the things I am determined to do when I leave -- I'm going to work until the last day, because I'm drawing a paycheck and I'm going to work to the last day. After that, I'm going to observe strictly what I think is the proper role of a former President. And we will have a new President and he has to make the calls and I will support that entirely. Around the world, I think that's very, very important. So anything I might ever do, indeed, for the whole rest of my life, not just in the first few years I'm out of office, will be determined by what whoever happens to be the President does or doesn't want me to do, and whatever parties in other parts of the world do or don't want me to do. That's just the only appropriate thing and I will rigorously adhere to that.
Q Have both sides asked you to, sir? Have both sides asked you to keep at it?
THE PRESIDENT: No, I didn't say that. It depends upon -- I think that it is -- first of all, in this context, I believe that is exceedingly unlikely. That is, I honestly believe, given the pendency of the Israeli election, and the developments within the Palestinian community and the larger Arab world, that the best chance they have to make an agreement is in the next three weeks.
Now, none of us who long for peace in the Middle East would ever give up on it. But I think that is both a theoretical question and an unlikely one, because if you look at where the forces are today, they have a better chance to do it now, if they're ever going to do it. It's just -- it's really hard. If it weren't hard, they would have done it before this. I mean, they signed the Oslo Agreement in '93 and put all this stuff off to the end because they knew it was hard, and it's still hard.
But if you look at where we've been the last few months, it's not going to get any easier. And I just hope that -- I've said this before, I said it earlier -- we had a confluence of Christmas, Hanukkah and the end of Ramadan and the beginning of the Eid, and maybe there's something in the stars that will give them the divine strength and inspiration to do it. I don't think it's going to get easier.
Q Well, are your terms negotiable, or are they just parameters?
THE PRESIDENT: No, they're the parameters. The negotiations, in other words, have to occur within them.
Q So East Jerusalem could be negotiated more?
THE PRESIDENT: No. I do not want to talk more about this. They understand exactly what I mean. Both sides know exactly what I mean and they know exactly what they still have to do, and that's enough right now.
Q Thank you, sir.
END 12:58 P.M. EST