Software Vault: The Gold Collection/Software Vault - The Gold Collection (American Databankers) (1993).ISO/cdr11/wh930623.zip/06-23D.TXT

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From @lex-luthor.ai.mit.edu:[e-mail]  Tue Jun 22 23:49:20 1993
Date: Tue, 22 Jun 1993 20:16-0400
From: The White House <[e-mail]>
To: [e-mail],
Subject: Panetta Briefing  6.22.93



                           THE WHITE HOUSE

                    Office of the Press Secretary
______________________________________________________________
For Immediate Release                              June 22, 1993

                           PRESS BRIEFING
                                 BY
                            LEON PANETTA


                          The Briefing Room


1:05 P.M. EDT

         MR. PANETTA:  What I would like to do is to basically
follow up on -- the briefing that we provided following the House
action on reconciliation was to kind of outline some of the specifics
that each of the committees did.  And I would like to kind of
summarize again what the Senate did to indicate that the President's
plan is well on track with regards to adoption.

         Deficit reduction, the incentives for growth, helping
families -- that was the key behind the President's economic plan.
And we feel that we're very much on track to getting those provisions
enacted.  Most of these are contained in the provisions of the 12
committees on the Senate side that reported pursuant to their
instructions of reconciliation.  And while the administration did not
embrace all of the changes made by the various committees, we do
commend the Senate and each of the committees for achieving $500
billion in deficit reduction.

         The key elements of the President's plan are pretty much
presented here and you have a good sense of what, in fact, were
maintained through the House and through the Senate versions of each
of these.  Let me just kind of summarize the plan.

         Obviously, $500 billion in deficit reduction.  We
started -- the administration was slightly below $500 billion, it was
about $496 billion; when proposed in the House it was about $502.9
billion; and in the Senate, according to OMB estimates, it's about
$516 billion; according to CBO it's about $507 billion.

         On the entitlement, each of the key areas on the
entitlements, we have achieved the savings that we've been after
here.  The first on agriculture, it's $3.2 billion, and that's true
across the board -- the House and the Senate.  On veterans, we wanted
$2.6 billion -- that's true across the board.  We achieved that in
the House and we've achieved it in the Senate.  On Medicare savings,
we achieved $50.4 billion, roughly about $50 billion in Medicare
savings in the House.  And obviously that's the one area where the
Senate has increased the savings there by an additional $19 billion.
We're looking at $67 billion on Medicare savings there.

         On Medicaid we've got approximately $8 billion; the
Senate's slightly higher at about $9 billion on Medicaid savings.
And on Social Security, that was the one area where the House did
about $32 billion.  The Senate did $26 billion, and that was because
they increased the thresholds with regards to those who would be
paying on the benefits under Social Security.

         Discretionary cuts -- this is about $102 billion across
the board.  Those cuts, obviously, are reflected in the caps -- hard
freeze caps that are adopted by the House in their version and that
will be adopted by the Senate as well.

         The energy tax -- there is a major difference there as
well.  We had about $72 billion, obviously, in the energy tax in
both the administration as well as the House.  The Senate adopted
about $25 billion as a result of going to the gas tax.

         Taxes on the wealthy are roughly in the -- about $114
billion, in terms of increased taxes on the wealthy.  That's the
increase in the rate as well as the surtax.

         And on the investments, that's probably where the major
difference is with regards to both the House and the Senate as well
as the administration.  There we have identified the principal
investments -- the earned income tax credit, hunger prevention,
immunization, family preservation, and empowerment zones.  The House
basically included all of those in their version of reconciliation.
In the Senate we do have the EITC, although it's been reduced.  We do
not have the hunger prevention bill.  We have a version of
immunization that was included.  We do not have family preservation
or empowerment zones.  And that's obviously the key difference with
regards to investments.

         We have tax incentives included in all three packages, a
little less in the Senate than what was in the House.  And obviously
the deficit reduction trust fund was included in the House and we
expect that it will also be included in the Senate as well.

         Those are some of the key elements that obviously
reflect the President's economic plan and the fact that this economic
plan, as I said, is well on track, both through the House and the
Senate.  I want to just mention some specific spending cuts in each
area.  We've provided a package to each of you that goes into each of
the committees.  But again, understand that each committee had to
enact specific savings with regards to cuts.  This is not a situation
where they basically tried to grab a number our of a cap or what have
you.  They basically had to identify specific savings.

         In agriculture they reduced efficiency payments,
specifically with regards to what's called the Pay 92 Program;
they've increased assessments by ten percent on sugar and peanuts and
also lowered payments with regards to honey, wool, and mohair.

         Arms Services Committee -- just to give you a sense of
what we're looking at -- there is a delay on cost-of-living increases
for the uniformed services, the retired, all of the uniformed
services, by nine months from January through October and delays in -
- COLA by eight months.  Very significant savings there and a tough
vote, I'm sure in the Armed Services Committee.

         In commerce we were able to retain the spectrum auction,
which is the ability to auction that part of the radio spectrum.
That's going to produce almost $7 billion in savings right there.
Hard rock mining fees were increased in energy.  In the Finance
Committee -- obviously, I referred to the Medicare cuts -- those are
all specific recommendations on Medicare cuts that are included in
that committee.

         In the Foreign Relations Committee there was a three-
month COLA delay for foreign service retirees.  Another cost-of-
living hit from '94 through '96.  In the Government Affairs Committee
there is a three-month cost-of-living delay for civilian retirees for
'94 through '96, and it permanently eliminates the lump sum
retirement option as well.

         We have a modified version of the President's direct
student loan program -- the direct student loan program on the Senate
side, but obviously, a significant savings could be achieved with
that change.  And on veterans affairs, there were significant changes
made, particularly with regard to GI benefits.

         So in each of these committees the recommended cuts are
specific, they're real, they affect everyone from farmers to the
elderly, from doctors to hospitals to veterans to federal, civilian,
and military retirees.  Anyone who says there aren't real spending
cuts in this package ought to ask the tens of millions of Americans
who will be directly affected by them.

         Now, let me speak to an allegation that's been made over
the last few days about whether or not the counting on the $500
billion is real or not.  First of all, there's the allegation that
we're taking discretionary spending cuts, we're using user fees and
interest payments, and that those should not be counted.  When
President Bush and the Congress negotiated the 1990 budget agreement,
savings from the five-year discretionary spending caps that were
included in that provision were included -- the numbers were included
in the total.  So were the fees, and so were reduced interest on the
debt.

         And let me just say, when you have the savings on the
discretionary caps, those are real.  You've locked them in.  If you
don't achieve those savings there is a cut across-the-board that
takes place on all spending programs.  So there are teeth here, there
is an enforcement mechanism.  And the fact is from the 90 agreement
we've achieved every year savings on discretionary savings by virtue
of having that tool in place.  So those are real.  And they were
counted in the '90 budget agreement and we count them because they
are real.

         The same thing is true for interest savings.  I mean, to
assert that somehow interest savings ought not to be counted as
savings -- most corporations and businesses, when they reduce their
debt, they obviously reduce their interest payments and those are
savings.  We do the same thing.  If we're not paying on the interest.
That's a legitimate savings in terms of the federal government.  And,
again, it's been counted in the past.

         And on fees, when you offset federal spending by having
individuals that either go to parks or what have you pay the fee, it
reduces the amount of spending that you have to then contribute.  So
it, too, has been -- and has always been scored as a spending
savings.

         Bob Dole, as you know, when he was speaking on the '90
budget agreement, basically defended the fact that there were $500
billion in deficit reductions using exactly those same score-keeping
methods.  John Kasich with the Republican alternative in the House --
his plan counts interest savings, it counts fees, and it counts
discretionary savings as well.

         And regarding the discretionary spending caps -- for
anyone who doesn't think that those are real, let me indicate to you
that I have sent a letter out to all of the heads of departments and
agencies at the end of last week asking them to begin the process of
planning how to meet the caps in the 1995 budget.  We estimate that
we're looking at approximately a 10 percent reduction in most of
those departments in order to reach those caps.  Those are tough
caps.  This is a hard freeze.  And everyone who is going to have to
work through those savings understands that these discretionary
savings are very real.

         Lastly, let me also indicate -- I mean, I think we've
always indicated the tests that we abided by in presenting the
President's economic plan to the country in terms of deficit
reduction, the fact that it was real and progressive and what have
you.  I want to establish the same tests, if I could, for whatever
Republican alternative might be offered with regards to this deficit
reduction effort.

         The first test is it should achieve $500 billion in
deficit reduction in real terms.  That's the goal.  That's what we
feel is necessary if we're going to put this country on the right
track with regards to deficit reduction over these next five years --
$500 billion in deficit reduction.

         Secondly, that it should be progressive, with the
wealthy bearing their fair share of the burden.  At least 75 percent
of the tax increases that we have in this proposal come from those
earning incomes over $100,000.  And, as you know, under the Senate
version, it approaches almost 80 percent that comes from those at the
upper income brackets.  So it must be progressive.

         Now, if, by chance, the Republicans decide to eliminate
all tax increases on the wealthy, that means that those who would
carry the primary burden of deficit reduction would be the veterans,
the farmers, the doctors, the hospitals, the elderly, working
families, and the wealthy would bear no share of that burden
whatsoever.

         Thirdly, there ought to be no gimmicks.  There ought to
be specific spending savings proposals.  We did it in the proposal
that we submitted in our budget, the House has done it, and the
Senate has done it.  There are no gimmicks here.  What you see is
what you get in terms of the proposals for spending savings.  It's
easy to try to grab a gimmick like some kind of entitlement cap and
say, look, ma, no hands-type of approach to deficit reduction.  The
tough part is to do it in specific policy terms.  And so what we want
and what we expect -- and I think what the American people expect --
is that if they're going to produce -- if they're going to provide
additional spending cuts, tell us specifically how it's going to be
achieved.  Senators Boren and Danforth, in their alternative, were
specific, and I give them credit for that.  Surely, if there are to
be alternatives from the Republicans, those two ought to be very
specific about where the cuts are going to come from so that
everybody understands where the pain is going to take place.

         Lastly, it must be fair.  Programs protecting low income
Americans must not be placed in jeopardy.  And, in our view,
agriculture, veterans, Medicare, Medicaid must not bear an unfair
portion of the responsibility for deficit reduction.

         Let me read a quote if I can, which I think is very
appropriate to the debate that we're now having.  This was a quote
from October of 1990.  "I think a lot of people forget what this is
all about.  It's about deficit reduction.  It's not about the gas tax
or the cigarette tax or Medicare.  In the long run, it's about
deficit reduction and our children and our grandchildren."  That
quote was from Bob Dole in October of 1990, and I think it applies
now.  This is not about all of the tough choices that have to be
made.  Yes, the tough choices are there.  But the bottom line is it's
about deficit reduction and trying to improve the future for our
children and our grandchildren.  What he said then is also true
today.  And that's what this effort is all about:  our children and
our grandchildren.

         I'll be happy to answer any questions.

         Q      Mr. Panetta, in terms of tough choices, there's a
draft report from the Department of Energy's Inspector General on the
supercollider, which has found that 40 percent of the costs are
excessive or unwarranted, including a $35,000 Christmas party and
$56,000 for potted plants.  In light of this report, do you still
believe that the supercollider should be funded and that the
taxpayers should foot the bill for it, with the House is considering
it later this week?

         MR. PANETTA:  Our approach in the budget was, I think,
the correct approach, because we saw some of the problems with cost
overruns.  And our approach and our recommendation is that we ought
to stretch out the costs to ensure on a year-by-year basis that they,
in fact, are spending the money correctly, and that, in fact, the
science associated with it is doable.  And so that's why we proposed
essentially what is a stretch-out, and I think that's what the
committee has supported and the President supports.

         Obviously, it's going to be debated on Thursday.  It's
going to be, I think, a good debate.  I think it's going to be a
close vote.  But from the President's perspective, the proposal we
put in to basically stretch out that funding gives us a chance to
continue to oversee it to make sure that that kind of waste doesn't
go on.

         Q      How does that deal with the waste that's already
taking place, and how does it deal with the waste that will take
place in the coming year if it's --

         MR. PANETTA:  I can't answer for the waste that took
place in the last administration, but we do have to answer for any
waste that takes place in this administration.  And I can tell you,
one of my goals will be to very closely oversee spending in that
area.

         Q      Let me ask you the same question I asked the
Secretary of the Treasury yesterday, for which he had no answer.  And
that is that you are so far -- your x's there disguise the fact that
on many of these issues, the energy tax, in particular, and on some
of the investments, you are so far apart between the liberal
Democrats in the House and conservative senators in the Senate.  What
strategy do you have or what middle ground do you see to bring these
people together besides -- and the only thing he offered yesterday
was that the alternative is worse, the idea of having nothing is
worse, and that was basically the administration's argument it
seemed.

         MR. PANETTA:  First of all, look, you're getting $500
billion in deficit reduction here.  I recognize that, obviously, some
of these pieces are high profile and they draw a lot of attention.
But when you look at the work of all of the committees here, and you
look at even the work of Ways and Means and Finance, overall, these
committees have done one hell of a job getting the $500 billion in
deficit reduction.

         Are there some differences?  Sure, there are
differences.  In the energy area, there's going to be a major
difference between the House and the Senate that's going to have to
be resolved in conference.  In some of the committees, on Medicare
there will have to be a major difference resolved in conference.  And
in some of the committees there will be some differences that will
ultimately be resolved.  But the fact is they're taking the step.
They're moving this forward.  I mean, what you see here is happening.
There isn't any other game in town right now.  This is it.

         The President's made this proposal, the House is moving
it forward.  They've made modifications on it.  The Senate is moving
it forward -- moving the plan forward.  And the Senate has made
modifications.  That's the nature of the legislative process.  But I
am fully confident, and I think the President shares this confidence,
that ultimately we are going to be able to resolve this in the
conference committee, and the end result is going to be very much
what the President presented to the country in his economic plan.  I
don't think you're going to see a lot of differences in the final
product.

         Q      One of those differences is in the energy tax.
Administration officials have said that the President still wants a
broad-based energy tax.  The Btu tax is dead.  So what shape would
the energy tax take?  Would it be a combination of what kind of
broad-based tax in conjunction with a gasoline tax?  Could you
describe to us what exactly you think that will --

         MR. PANETTA:  No, I don't really think I should at this
point.  I think, basically, this is going to be a conference item.
The President has made very clear what his test is.  He wants a
broad-based energy tax for the country.  He's made that clear.
That's what he presented to the country; that's what the House
enacted.  The Senate has enacted an energy tax, but at least it kept
an element of an energy tax alive.  And ultimately, it's going to be
resolved in conference.

         But out primary goal right now is to get this package
adopted by the Senate.  This is going to be a tough vote.  I don't
think we ought to assume that somehow the Senate vote is going to be
an easy vote.  We've got a lot of work to do.  And Senator Mitchell
and Senator Moynihan are working it now.  But ultimately, we're
confident that we can get it passed.  And in the conference that
difference is going to have to be resolved.  But I feel confident
that the end result is going to, in fact, have a broad-based energy
component to it.

         Q      But are you shooting to raise that $24 billion
energy tax that the Senate passed?  Do you want to raise more money
than that, or are you going to try to reach a middle ground between
the 72 --

         MR. PANETTA:  From my perspective as Director of OMB,
the bottom line is we want $500 billion in deficit reduction.  And so
it obviously depends on what is done with the spending cut portion of
it.  If, in fact, on Medicare cuts those are brought down, you've got
to be able to make up that loss of revenues in other ways.  That's
the balance you're going to have to work out in a conference.

         Q      What about the length of time you think it will
take the House Senate conferees, assuming the Senate passes it, will
they resolve their differences and come up with a compromise before
the August congressional recess, or will it go into September?  And
how, secondarily, will that affect the release of the health care
reform package?

         MR. PANETTA:  I have every confidence that the
differences will be resolved in August before the August recess.  You
understand here, for those of you that have not been through a
reconciliation process in the past, you've got 13 committees on the
House side, 12 committees on the Senate side.  Some of these issues
involve multiple conferences because they involve different committee
jurisdictions.  So you could have as many as 60 to 70 different
conferences on different issues that are going to have to be tracked.

         We hope to begin that process, assuming it passes the
Senate, begin that process next week.  And then have the staffs work
on it when members come back, really go into a crash program to get
it enacted before the August break.  Obviously, I think the
President's interest is to try to get this done before the August
break, and our primary focus is getting the economic plan done and
then turning to the health care proposal.

         Q      So that would delay the health care until
September?

         MR. PANETTA:  I think the primary focus remains getting
the economic plan done.  There hasn't been a decision to formally
delay the health care bill because, frankly, that continues to be
worked on.  But our primary focus right now is to get this economic
plan done.

         Q      Are we to assume from what you've said that the
administration strategy essentially, when it gets to conference, will
be as it is now with the Senate, as it was with the Senate Finance
Committee -- let them do their work; we're not publicly expressing
any position on any of this as long as they reach $500 billion?

         MR. PANETTA:  I think you will find the administration
engaged in the conference.

         Q      Along those lines, from the point of view of the
economy, would the administration prefer to see more done on the
spending side or more done on the revenue side to reach that mix that
gets you to $500 billion?  I know that the House measure which does a
little more than the Senate does on revenue and a little less on
spending cuts is closer to your original measure.  But as you get
down to it now, would you rather see more done on the revenue side,
more on the spending side -- something more like the balance that you
discussed originally?

         MR. PANETTA:  Bottom line for me is deficit reduction.
And if it --

         Q      I understand that, but do you have -- a way to do
it?

         MR. PANETTA:  I don't tie it to any magic formulas.  I
think the key here is if it's dollar for dollar, I think that's
approximately what we're looking at in the House version,
approximately what we're looking at in the Senate version.  And if we
can have 50 percent of this come from spending cuts and 50 percent
from revenues, that I think is doable.

         Q      Have you done an estimate of what would happen -- I
mean, under the Senate plan, they strip out many of the business
incentives that you had fought for and wanted.  Have you done an
estimate, adjusted your estimates of what would happen to the economy
by taking those out?

         MR. PANETTA:  Obviously, a primary focus in the
conference committee will be the restoration of investments, both the
investments that we talked about here as well as restoring some of
the business investments as well.  I think that's going to be a
primary focus of the conference.

         Q      Have you made any effort to hold back efforts to
amend in the Senate and have the real work of compromise done in
conference?  In other words, to shorten the Senate floor debate
process, have you asked anyone to hold off on that and save it for
conference?

         MR. PANETTA:  God, anything that will shorten the Senate
debate would be a welcome event.  I think the reality is that you're
going to see a lot of amendments offered on the Senate floor.  Our
goal here is to work with the leadership to do whatever we can to
move this process through the Senate.  And we are working with them
in that effort.

         The key right now, fundamental point is that we've got
to pass this through the Senate to get it to a conference and to get
it done.  And I think the American people are really looking to our
leadership to get that -- to make that happen.  This is a good plan.
I think it's a good plan for the country.  It's an essential plan for
our economy.  And ultimately, the American people realize that our
ability to keep our economy on the right track depends on passing
this economic plan.  And there isn't any other game in town.  That's
the problem.

         Everybody can throw grenades at this and they can all
make their criticisms and they can all find their own little magic
way to solve the deficit problem.  But the fundamental problem is
that those proposals and those attacks don't result in a plan
happening.  We have the responsibility to make this happen.  We've
got it through the House.  I think we're on the threshold of getting
it through the Senate.  And we can get it done.  And I think the
American people understand that that's ultimately what has to be done
here if we're going to avoid gridlock and deal with our economic
problems.

         Q      On that note, a lot of the talk recently has been
how Republicans have been shaping this whole debate and how they've
been winning.  Do you think you're gaining ground?  Do you think
you're now winning how this really looks and it isn't realistic?

         MR. PANETTA:  I think the reason we're winning at this
point is because every time you focus on the opponents and say to
them, be specific, tell us how you're going to do this -- I mean,
everybody can make criticisms about any plan.  I've made criticisms
about plans -- that's the fun part is to criticize deficit reduction
plans.  The tough part is to put a package together that can get you
the votes to get it done.

         As these opponents try to do that, then the public is
going to have to focus on just how do they get there; what are their
simple answers to dealing with the problems of deficit reduction.
And I think what you're going to find is they're going to use
gimmicks.  Gimmicks have been used in the past.  They're going to
say, oh, we'll do some kind of entitlement cap across-the-board.  We
won't tell you what that means in terms of cutting benefits for the
elderly, or cutting benefits for the poor, or cutting benefits for
doctors or hospitals.  We're not going to get into those specifics.
We'll just do a cap across-the-board.

         Frankly, that's not good enough anymore.  And I think
the public can read through that.  So I think you're going to find
over these next few days that the debate is going to change a great
deal here because I think what we've presented is credible.  I think
what you're going to find our opponents presenting is not going to be
credible.

         Q      Mr. Panetta, your charts suggest that there isn't a
lot of disagreement over this plan between the House and the Senate
anyway, and you sounded very confident today and Mr. Bentsen sounded
confident yesterday.  I don't really understand why you're so
confident given the confrontational rhetoric coming from the Hill.
What is changed to lead you to believe that the House and the Senate
are going to agree on this package?

         MR. PANETTA:  Because, look, number one, the process and
the plan is moving forward.  Everybody has complaints about portions
of it.  That's the nature of the legislative process.  But we are
working through those problems.  We worked through them on the House
side, the Senate is working through those problems and ultimately the
conference is going to work through those same problems.

         If you look, as I said, at the overall package, you
know, again, a good 80 percent of this package is going through
without much change.  We're looking at about less than 20 percent
where the main controversies are.  Well, you know, again, that's
understandable -- everybody has different positions and reflects
different feeling from their constituencies.  But ultimately in this
give-and-take process, it's working, we're getting it done.  And
that's what makes me confident.

         Look, at this stage of the game we're on probably the
fastest track we've ever been on with regards to getting a budget
resolution done and getting reconciliation accomplished.  The fact
that we're on that track tells me a lot about the hope that it can be
done.

         Q      If I could just follow up.  While you're trying to
get this through the Senate, are you also talking with key members of
the House to bring them on board --

         MR. PANETTA:  Yes.

         Q         so that they don't vote against this --

         MR. PANETTA:  Yes, we've communicated -- I've been
communicating with both the House leadership as well as the Senate
leadership on this issue and that's almost on a daily basis.

         Q      Mr. Panetta, as long as you're here, why is it
taking so long to find out who did what in terms of the summary
firing of the travel office staff?  One month or more.

         MR. PANETTA:   Mr. McLarty and I are -- we have an on-
going investigation within the White House now and we're hoping that
that will be brought to a quick conclusion within these next few
days.

         Q      Until when?

         QQ       Are you holding off the release of the report until
after the debate this week for political reasons?  Don't want to mix
your messages?

         Q      In the next few days?

         MR. PANETTA:  No.  No, no, it's -- I mean, it's a
continuing, you know, it's an investigation that's ongoing.

         Q      Is it anywhere near done?

         MR. PANETTA:  Pardon?

         Q      Anywhere near done?

         Q      Can we have one last budget question?

         MR. PANETTA:  Frankly, I don't know whether it's -- I
mean, my understanding is that it's continuing and that it should be
completed, hopefully, within these next few days.

         Q      Well, have you been briefed on the substance of it,
Mr. Panetta?

         Q      I thought you were doing it.

         MR. PANETTA:  We basically wanted -- they're doing the
investigation and we're going to be --

         Q      They're doing it for you, you're not doing it
yourself -- you and Mr. McLarty --

         Q      Who is they?

         Q      Who is they?

         MR. PANETTA:  I've been involved with the budget process
and we've identified people within the White House that are doing the
work and they're going to be presenting briefing to us.

         Q      Whose doing the work, because we keep being told
that it's Mr. McLarty and you?

         Q      And Gearan.

         Q      Who is doing the work?

         MR. PANETTA:  It's basically people within the White
House that are doing the main work.

         Q         accountability.

         Q      What happened?  Last week we were being told that
it would be in the next couple days.  Why is it now a week -- what's
caused the delay?

         MR. PANETTA:  Believe me, I'm very confident that we're
going to get that report out to the people; we have to.

         Q      Not this week?

         Q      Maybe Dee Dee or Mark can tell us, on the record,
whose in charge of this investigation.

         Q      Thank you.  It's the only game in town.

         MS. MYERS:  We never said it would be done in a couple
of days.

         Q      Yes, it was.

                          END1:35 P.M. EDT