Night Owl 9/Night Owl CD-ROM (NOPV9) (Night Owl Publisher) (1993).ISO/032a/wh930603.zip/06-03E.TXT

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From @lex-luthor.ai.mit.edu:[e-mail]  Thu Jun  3 17:12:09 1993
Date: Thu, 3 Jun 1993 12:12-0400
From: The White House <[e-mail]>
To: [e-mail],
Subject: President's Speech on the Economy  6.1.93

                         THE WHITE HOUSE

                  Office of the Press Secretary
                     (Milwaukee, Wisconsin)
______________________________________________________________
For Immediate Release                           June 1, 1993


                    REMARKS BY THE PRESIDENT
                  TO THE CITIZENS OF MILWAUKEE

        Milwaukee Exposition Convention Center and Arena
                     Milwaukee, Wisconsin

12:10 P.M. CDT

         THE PRESIDENT:  Thank you very much.  Senator Kohl,
Congressman Barrett, Mayor Norquist, ladies and gentlemen, it's
wonderful to be back in Wisconsin and back in Milwaukee again,
for the first time since I became President.  I suppose I ought
to begin by thanking the state of Wisconsin for your electoral
votes.  I'm very grateful for that.  (Applause.)

         I'd also like to thank the Metropolitan Milwaukee
Association of Commerce and the Public Policy Forum for hosting
this opportunity for me to visit with you, and through you, all
the people of Wisconsin, about the economic issues facing our
country.

         I'd like to introduce some other people who are here
-- up there somewhere.  I asked Senator Kohl where they were, and
he said, "Up there somewhere."  But it's dark, I can't see.  I
brought with me the former Chancellor of the University of
Wisconsin, now the Director of the Department of Health and Human
Services, Donna Shalala, who is here.  (Applause.)  The Chairman
of the Joint Economic Committee in the House, your Congressman,
David Obey, is here with me somewhere there.  (Applause.)  And we
were met at the airport by Congressman Gerry Kleczka, who is here
-- Gerry.  (Applause.)  And Congressman-elect Peter Barca, who is
also here somewhere.  Thank you.  (Applause.)

         You know, a lot of times when I get out in the
country now, people who worked for me -- or who didn't, who just
feel like they can come up and talk, say, well, aren't you
worried about getting isolated up there in Washington?  I mean,
what's the real difference in being President and just being out
here living?  And I had one thing happen to me a couple of weeks
ago that illustrates the problem of being President or in the
Congress or anything else.

         I was in the White House and I was up on the
Residence floor.  And I got on the elevator and I was going down
to the first floor where all big -- if you've ever taken a tour
of the White House, that's where all the big, fancy rooms are
that the public tours.  But we also use them when they're not
open for tours, and I was going to a meeting there.  And the
young man who was taking me down in the elevator works for the
Usher's Office, and of course, they were all hired under my
predecessors.  He didn't know me very well and he was a little
awkward, you know.

         So he took me downstairs, and he opened the doors of
the elevator, and I found myself immediately in the presence of
30 total strangers who were standing there in front of the
elevator.  And it turned out that they had been walking out of a
meeting with my wife on something entirely different.  I didn't
know them, they didn't -- they knew who I was, but I'd never met
any of them.  (Laughter.)  And there I was -- so I said hello to
them, shook hands with them, and they walked by.  And I turned
around and looked at the young fellow running the elevator and he
was all red-faced.  And he said, "Oh, Mr. President," he said,
"I'm so sorry I let you out in the midst of all those people."
(Laughter.)

         And I looked at him and I said, "John, that's okay.
I used to be one myself."  (Laughter and applause.)

         I want to say a lot of things that I'll get into in
a moment, but there are one or two things I want to say
especially about Wisconsin.  First, I was very moved by the
drinking water crisis here.  And one of the things that we tried
to invest in that I don't think is a waste of your money in the
next five years is more federal investment in dealing with
drinking water problems, waste water problems, and other
environmentally-related issues.  I think that's a good investment
of our tax dollars.  And I did enjoy my conversation with your
Mayor about that.

         The other thing I'd like to do is to -- (applause.)
Thank you.  I want to say a little more about this in a moment,
but since it was brought up, I want to complement Congressman
Barrett and Congressman Kleczka for reintroducing the
appropriations to fund the New Hope Welfare Reform Project.  It
was vetoed last year.  And I just want to tell you that, as I
said, I want to say a little more about this in my speech, but
the idea of giving people the tools they need to move off welfare
and then calling a halt to it after two years, saying it has to
come to an end and people who can should go to work I think is a
good thing.  And I think we ought to fund that experiment in
Wisconsin and see if it won't work.  I think a lot of people will
be for it, and I think it will work.  (Applause.)

         For any visitor who comes here to Milwaukee, as I
have many times, the church steeples and the factory smokestacks
are a vivid reminder of the faith and the work that made our
country what it is today.  People from every continent have come
to our nation and come to cities like Milwaukee and Chicago and
Detroit without much money in their pockets, but filled with the
faith that if they worked hard and played by the rules, they
would find a better life for themselves and give their children a
better chance.

         In my part of the country, in the rural South, when
the agricultural economy collapsed in the Depression and then
didn't pick up after the Second World War, for 30 years people
poured out of the places where my folks farmed in Arkansas and
Mississippi and southern states, and came up here to the northern
cities seeking that same kind of opportunity.

         Over the years in different ways our country has
dealt with different economic challenges, but we have always
tried to keep alive that American Dream -- that if you worked
hard and played by the rules you would be rewarded.  If you were
especially good you could get very, very wealthy, but everyone
knew that the country would rise or fall based on the broad
middle class, the small businesspeople, the factory workers, the
farmers, the people who really lifted the country and made it
work.

         And we have, to a large extent, in the 20th century
succeeded in doing that until just recently.  Until recently,
that is, in the last 20 years, we had succeeded in building the
world's most diverse society and keeping it growing together, not
coming apart.

         Today, we're more diverse than ever before.  One
county in California, Los Angeles County, has 150 different
racial and ethnic groups.  Today we still have the strongest,
most vibrant free enterprise economy in the world.  We have some
of the most productive businesses in the world.  But we have
serious economic problems, as you all know.

         Hard work rewarded by rising living standards is
literally at the heart of what it means to be an American.  It's
at the heart of my family's heritage and probably at the heart of
most of your families' heritage.  And it's at the heart of the
economic philosophy that compelled me to enter the race for
President in 1991 and that brings me here again to Milwaukee
today.

         Once Americans looked forward to doubling their
standard of living roughly every 25 years.  As I said, that
stopped about 20 years ago, as we began to be confronted with the
highly competitive global economy and a slower rate of economic
growth in our own country.  Now, it will take us about 75 years
to double our standard of living at the present pace.  That means
that not only do you have too many people who want to work who
can't work, you have too many people working part time and you
have too many people who are working like crazy and falling
further and further behind.

         Because I believe we can do better, I asked the
people of this country to give me a chance to serve as President.
(Applause.)  As I said, it's very important to note what happened
and when.  Our real average hourly wages peaked about two decades
ago.  And since then, they've either been stagnant or declining
as a whole.  Indeed, the average working family is spending more
hours a week on the job than they were in 1969 for lower real
wages than they were making certainly 12 years ago, and in many
cases, 20 years ago.

         This is because, as I said, of changes in the global
economy, more competition from people who were either more
productive than we are or who work for wages we can't live on, or
lack of productivity growth, of efficiency growth in our own
country, or other problems with our economy.  Twelve years ago,
in 1981, after the presidential election of 1980, another
election conducted in very difficult economic circumstances, the
American people decided to give another President the chance to
try an approach to deal with this problem.

         The whole idea of Reaganomics was trickle-down
economics -- that we should lower taxes on the wealthiest
Americans, depend upon them to invest in our economy to grow it;
we should reduce domestic spending, but increase defense spending
even more than we reduced domestic spending.

         Now, in the last 12 years, that philosophy was
modified around the edges some, but it maintained itself at the
heart of our economic dealings.  Because the taxes were cut so
much in '81, they were added back a little bit over the last 12
years, mostly on the middle class.  And after a while, defense
spending could not be sustained because of the end of the Cold
War, so it began to be cut.  But by the time it was cut, health
care costs were exploding.  So all the defense cuts were
swallowed up by exploding health care costs and interest payments
on the debt.

         But the fundamental idea remains -- that the most
important thing was not to worry about investment or the deficit
or anything else; the most important thing was to worry about
keeping taxes low on upper income people and keeping the
government's hands off the economy, except when it was necessary
to invest in defense, and then when it wasn't necessary, to even
get out of that.

         Now, that was the theory.  And we now have had a
chance to see how it works.  I think it's fair to say that the
only reason I was elected in 1992 is that the American people
thought that it hadn't work very well, that there were problems
-- (applause) -- I say this -- as I will make clear in a minute,
this is not a partisan criticism, because it took bipartisan
agreement at least to go along with the framework of this.  But
what had happened was that we had a good deal of growth in the
early '80s, where we had defense increases and tax cuts, but the
deficit got big.  Then when the defense  business got cut, all we
did was pay more for the same health care.  No one reinvested in
the economy to give those defense workers something else to do,
and the deficit got bigger and bigger and bigger.

         Now, the American people voted for change.  They
wanted me to try to rebuild the middle class both in terms of
jobs and incomes, to invest in our own people and our jobs, to
cut the deficit, to open the doors of education to all, and to
deal with the terrible health care crisis, and to make a real
dent at welfare reform -- removing people from dependence and
moving them to independence.

         I was sent to the White House, I think, to take on
brain-dead politics in Washington from either party -- or from
both.  (Applause.)  Some, but not all, in the national Democratic
Party have placed too much faith in the whole politics of
entitlement -- the idea that big bureaucracies and government
spending, demanding nothing in return, can produce the results we
want.  We know that is simply not true.  (Applause.)  There is a
limit to how much government can do in the absence of an
appropriate response by the American people at the grass-roots
level.  And there is a limit to how many decisions can be made
properly in Washington.  And most of our growth has and always
will come from the private sector.

         On the other hand, some, but not all, in the
national Republican Party have practiced the politics of
abandonment -- of walking away from common concerns like dropping
test scores, or rising crime rates, or an insufficient
infrastructure, or taking care of the people who won the Cold War
for us and now don't have anything to do in the wake of defense
cutbacks -- and in simply insisting that as long as you don't
raise taxes on upper income people and don't talk about it when
you raise taxes on anybody else, everything's going to be fine.
Well, that's not right either.   We have to move beyond
entitlement and abandonment.  (Applause.)

         I ran for President basically on the same things
that I found had worked for me when I was a governor -- not
entitlement, not abandonment, but empowerment -- the idea of
creating a new American community by offering people more
opportunity and demanding more responsibility.  (Applause.)

         I think we have made a real start at that.  In the
first few weeks of this administration we have passed an
important political reform measure, the motor voter bill; and we
have moving through the Congress a really tough lobby disclosure
bill and a campaign finance reform bill that are the kind of
things Wisconsin has been famous for years.  (Applause.)

         We have tried to support the middle class in this
administration.  Only 17 days into the administration, I signed
the Family Leave Bill to guarantee that people don't lose their
jobs when they have to take a little time off to have a baby or
when there's a sick parent.  (Applause.)  The Congress is now
considering our national service legislation, which would open
the doors of college education to all and soon will have a health
care program that will provide real security to working families.
(Applause.)

         For the first time in 17 years the Congress passed
the budget resolution, the outline of our deficit reduction plan
and our plans to invest in the country, on time -- for the first
time in 17 years.  And that helped to produce the lowest home
mortgage rates in 20 years and other low interest rates because
people believe we're trying to bring this deficit down.  So we
have made a good beginning.  (Applause.)

         But to be fair, the hard work is still ahead.  The
House of Representatives passed my economic program last week
with some minor modifications, many of which made them better, I
thought.  (Applause.)  But the hard work lies ahead.  All the
difficulties in this world are in the details.  We can always
agree on generalities.  The question is, what are the specifics?

         I came here to ask you to join with me in trying to
tackle the three deficits that are paralyzing this country today:
the deficit of dollars in our federal budget, the deficit of
investment in the private and public sectors, and the deficit of
responsibility in our national government.  (Applause.)

         Now, let's talk about this deficit, the government's
budget deficit.  Our country last ran a balanced budget in 1969.
We haven't balanced our national books since then.  But to be
fair, the deficit was not a serious problem for our economic
performance until 1981 when we built permanent deficits into our
federal government system.

         What happened?  President Reagan, in the midst of a
recession, made what is -- has been a typical proposal by
presidents throughout American history -- he said, we're in a
recession, we ought to have a tax cut.  The problem was, by the
time he and the Congress got through bidding each other up and
playing to the American people's hatred of taxes, the tax cut was
twice the percentage of our annual income that he originally
proposed.  And it was adopted anyway.  Nobody really thought
about what it would do to the structure of the federal budget.

         And ever since then, we've been dealing with the
consequences of that, plus increasing spending, as I said --first
in defense; and then after defense was cut, an absolute explosion
in health care costs, which I'll bet many of you have also
experienced in your private health insurance premiums as well as
your government tax dollars.  (Applause.)

         Listen to this:  Over the past dozen years alone,
the annual deficit soared from $79 billion to $322 billion.  The
national debt in 12 years, after over 200 years as a nation,
quadrupled from $1 trillion to $4 trillion.  While Washington cut
taxes on the wealthiest individuals, even after the deficit went
up, we had exploding health care costs, exploding costs to pay
interest on a bigger and bigger debt.  And while the government
was used as a punching bag -- everybody talked against big
government -- no one ever really did anything fundamentally to
reform the way it operates or rein in its unnecessary spending.

         As this deficit soaked up more and more of our
national savings which could otherwise have been invested in
private, plant and equipment and human skills, we created a
second deficit -- an investment deficit.  From the 1960s to the
1980s, public investment -- that is, the expenditure of your
federal tax dollars in education and training, in new
technologies for new jobs, and in infrastructure -- things like
better water systems and bridges and roads and airports --
dwindled from four and a half percent to just 2.6 percent of our
annual income.

         Every time a company can't find qualified workers,
every time trucks are rattled by highways riddled with potholes,
every time a department store closes because a city is not safe
after dark, we see the consequences of the investment deficit.
Our income as a nation goes down, and we have fewer jobs as well.

         Meanwhile, national policy rewarded companies for
their financial strategies, not their investment strategies; for
making deals, not products; for seeking new mergers, not new
markets.  Business investment declined from 7.2 percent of our
gross national product in the 1970s to only 5.4 percent in the
'80s.

         The investment deficit also slows the growth of our
workers' productivity.  And in a market economy, people get paid
by what they can produce by global standards.  Compensation per
hour -- what workers earn in wages and fringe benefits -- grew
more slowly in the last 20 years than in the previous 100.  From
1954 to 1973, hourly compensation grew at over 3 percent per
year.  The more people produced, the more they earned.  But in
the last 20 years, as productivity slowed down, compensation
increased by less than one percent per year.

         This low productivity led to higher unemployment,
stagnant wages -- and guess what?  -- lower tax receipts.  So the
deficit got bigger, because people weren't earning enough money
to pay into the government to keep the deficit down.  They relate
one to the other.

         This was aggravated when we cut the defense budget
with no plan to put the defense workers back to work in the new
civilian economy.  And in some of our biggest unemployment areas
-- you see from Connecticut to Southern California, you see high-
dollar, scientific workers, people with advanced degrees and very
skilled factory workers with nothing else to do because there was
no thought given to what these people would do once the defense
work was shut down, even though we know there are tens of
thousands of jobs waiting to be had in the global economy in new
technologies, in aerospace, in electronics, in biotechnology, and
environment cleanup, just to name four.  We know those jobs are
out there.  But we know our competitors are working hard in
partnership with the government and the private sector to develop
them.

         At the same time, the exploding cost of health care
and education put a crimp not only on the growth of average
families' incomes and small business incomes, but on the overall
health of our economy.  Average health costs per family tripled
in the last dozen years.  Too many middle-class people at the
same time experienced job block -- that is, they couldn't move
jobs because someone in their family had been sick.  They had
what the insurers call a preexisting condition, meaning that if
they wanted to have their health insurance, they had to stay in
the job they were in.

         Now, we're living in a country, folks, where the
average 18-year-old will change work seven or eight times in a
lifetime.  If you can't change jobs in this kind of an economy,
your future is dramatically constricted -- all because we are the
only nation with an advanced economy that hasn't figured out how
to provide basic health care at affordable cost to all of our
people.  (Applause.)

         And look what's happened to education.  In the
1980s, the value of an education virtually doubled.  By the end
of the decade, the average college graduate was earning twice the
average high school graduate -- the difference between what a
college graduate and a high school graduate earned at the end of
the decade was twice what it was in 1980 at the beginning.  And
yet, look what happened to college costs.  The cost of public
colleges went up by 109 percent and private colleges by 145
percent.  College drifting, drifting, drifting out of the reach
of ordinary Americans, and the college dropout rate became more
than twice as high as the high school dropout rate, either
because people were sent unprepared, which was wrong, or they
couldn't afford to stay, which happened all too often.

         Virtually every economic decision that was made in
Washington -- or not made properly -- sent signals to our people
that the old rewards for hard work and playing by the rules and
responsibility were declining.  Most of the economic gains of the
1980s went to people in the top one percent of the income
brackets, and most of them were not those that were producing new
products and services, but instead were those who were producing
financial arrangements, which exploded the cost of paperwork and
didn't do much to create more jobs in America.

         Too many people who were at the bottom rung of the
ladder and working hard to get out -- which, after all, is where
most of our families started somewhere along the way -- found
that their hard-earned wages left them below the poverty line and
removed ever more the incentive to work instead of to be on
welfare.  If work doesn't pay, why not go on welfare?  How many
times have we heard that said in the last 10 or 12 years in the
city streets and in the rural communities of America?

         These are the things, my fellow Americans, that we
have to change.  This is a historic moment.  Now that the House
has passed this budget plan to reduce the deficit and to target
investments in our future, and it's going to the Senate for
further debate, we can make a decision to seize control of our
economic destiny.  That is why I have asked everyone in
Washington to go beyond politics as usual, to forget about
partisan divisions, to try to find bipartisan responsibility in
place of bipartisan blame and irresponsibility.  (Applause.)

         Now, the plan that I have proposed cuts $500 billion
from the federal deficit, the largest deficit reduction program
in our history.  It makes decisions long delayed and avoided.
The plan is balanced and fair.  About half of the deficit
reduction comes from spending reductions and restraints on
entitlements; about half comes from tax increases.  Entitlements
-- that is, medical programs, Social Security benefits,
agriculture benefits, welfare benefits, food stamp benefits,
things you get because of who you are -- those things -- we rein
in spending by $100 billion over the next five years.

         We cut 200 other areas of the budget by more than
$150 billion in the next five years.  We cut some very popular
programs in this country, from highway demonstration projects to
rural electrification.  But that has to be done.  We cut about
$47 billion directly out of the operations of the federal
government -- freezes in federal pay, restrictions on federal
retirement, the reduction in the federal work force by 149,000
people over the next five years.  (Applause.)

         All of that has been written into this budget.  The
plan imposes new discipline on government spending -- no
increases in taxes unless there are cuts in spending -- and all
of it put into a trust fund that must remain there for the five-
year life of the deficit.

         We also adopted a unique mechanism right at the end
of the House of Representatives debate which requires every year,
if we miss this deficit reduction target -- and Congressman Obey
got a bunch of charts; I wish he were up here showing them to you
-- about how the two previous administrations said the deficit
would go down to zero three different times, and they never did
make a target.  If we miss our targets, every year -- now the
President is legally bound to come in and offer a correction in
the budget to meet that deficit reduction target, and the
Congress has to vote on it.  (Applause.)

         Now, I lead with all this -- I dare say that most of
you, since all you've heard are about the fights on taxes, didn't
know how much spending was cut and probably don't know what
incentives are there for investment.  I'll get to that in a
minute.  Some taxes are raised.  No less authority than David
Stockman, who was President Reagan's Budget Director, was quoted
not long ago as saying, anybody, Republican or Democrat, who
thinks you can get this deficit down without increasing taxes
does not understand what we did to the tax system in 1981.
(Applause.)

         Now, those are the spending cuts we had.  the
spending cuts are real.  There are more than 200 of them.  There
are more than I recommended in the campaign   because I didn't
know in the campaign what happened right after the election,
which is that the deficit miraculously was increased by $165
billion, announced by the government before I took office but
after the election.

         So we cut spending some more.  And there are some
more tax increases, too.  But look how they fall.  Seventy four
percent of the money we raise comes from people with incomes
above $100,000.  (Applause.)  Over 60 percent of this money comes
from people with incomes above $200,000.  (Applause.)  Now, that
is not an attack on the wealthy.  It is an acknowledgement that
people in that income group had their incomes go up and their
taxes go down in the '80s; middle-class people had their taxes go
up and their incomes go down in the '80s.  So we're just trying
to redress the fairness of the matter.  (Applause.)

         Now, let me tell you exactly what you will pay if
you're a middle-class American, if your family income is under
$100,000.  I had wanted, and I advocated in the campaign, tax
relief for middle-class families, especially those with children.
I still want that, and I still intend to propose that before I'm
done.  But I can't do it now because the deficit is so much
bigger than it was when I was making these proposals.  It would
be irresponsible for me to advocate a very substantial increase
on upper incomes and not ask the middle-class Americans to make
any contribution at all.

         But listen to what it costs.  First of all, for
working families with incomes under $30,000, we have done
everything we could to make sure that the energy tax, which is
the middle-class tax here, will cost nothing by giving an income
tax credit to offset the income tax.  (Applause.)  Arthur
Anderson -- one fellow out here has been heckling me and saying
I'm not telling the truth, so I'll say, Arthur Andersen, which is
a fairly reputable firm, hardly packed full of Democrats --
(laughter) -- has examined my program and says that a family of
three with an income of $25,000 a year or less will actually get
a tax cut under the Clinton   economic plan as it is now.
(Applause.)

         For a family with an income of $40,000 a year, if
the energy tax passes just as it is, and if there are four people
in the family, the bill will be a dollar a month next year, $7 a
month the year after that, and $17 a month the year after that.
All of the money, every last red cent of it, will go into a
deficit reduction trust fund to bring down the deficit.  Every
penny.  (Applause.)

         Now, the question is, is it worth it?  Is it worth
it?  And here's my answer to you.  You may say it's not worth it,
but look what's happened since November.  First, when we
announced the energy tax and the deficit reduction plan, long-
term interest rates started to go down.  Second, after I actually
presented it to Congress in February they went down some more.
Now, for most of the last three months, long-term interest rates
have been at their lowest rate in decades; mortgage rates at the
lowest rate in 20 years; consumer loans down; college loans down;
car loans down; business loans down.  Millions and millions of
Americans are out there breaking their necks to refinance their
home loans and their business loans.  So much so that the
business analysts say that if we can keep interest rates down at
this level for a year, we will put $100 billion back into this
economy in lower interest rates because people think we're
serious about bringing the deficit down.  (Applause.)

         What does that mean?  What does that mean?  That
means, let's just say if someone had a $100,000 home mortgage
financed at 10 percent and they refinanced it at 7.5 percent,
that would be a $2,000 saving in one year.  A $2,000 saving in
one year.  In other words, there would be more than twice the
savings in one year as this program would cost that same family
in four years if it were passed exactly as it is today.

         Now, I think that's pretty good for America.  If we
don't do something to get the interest rates down, clean the debt
out, and get control of our economic destiny, we're going to be
in big trouble.

         Now, there are also a lot of incentives in this
program for people to further save money.  Let me just give you a
few.  Let's take a typical farm family in Wisconsin.  The
family's income net is under $30,000.  They will be eligible for
tax credits.  A single-family farm under this program for the
first time will be able to get a tax deduction for their health
insurance premiums, something they haven't been able to do
before.

         The expensing provisions for small businesses and
farmers will allow them to write off $25,000 -- not $10,000 -- of
investment now.  So much so that the average Wisconsin farm, even
after they pay higher energy costs and have agricultural budget
cuts, will wind up with a lower bill rather than a higher bill if
this whole program passes.

         And I think it's very important to look at the
incentives here.  We have more incentives for small businesses,
an historic incentive for people to invest in new business, real
incentives for people to put money into plant and equipment and
hire people in America, instead of just put money into financial
transactions or invest money overseas.  These are incentives that
will give the American people the way to lower their taxes by
creating jobs here in America, which is what I talked about in
the campaign.  (Applause.)  That's how you ought to be able to
lower your tax bill.  (Applause.)

         Now, let me also tell you that this plan invests
some new money.  You have to ask yourself whether you think it's
worth it.  Is it worth it for us to invest enough money at the
national level to do the following things:  to try to provide
some incentives for companies who won't have defense contracts
anymore to develop domestic technologies to put those high wage
workers back to work?  (Applause.)  Is it worth it to try to
provide jobs in America in areas where America needs work with
new water systems and new environmental cleanup systems?  Is it
worth it to provide a small amount of money to try to see that
America joins Germany, Japan, and every other advanced country in
saying if you don't go to a four-year college, at least you ought
to have access to two years of further education and training so
you can get a good and decent job?  (Applause.)  Is it worth it
or not?  You have to decide.  (Applause.)

         Now, if you believe all government spending is evil
and bad, you would say, no, it's not worth it.  But if you look
at our competitors and if you look at what works and what
produces growth, and the fact that it is clearly the skill levels
of our people which will determine as much as anything else the
economic future of America, I think you'd have to say, yes, it is
worth it.  We've got too many people who are not competitive in a
global economy today.  (Applause.)

         One final thing.  This state has always been a
pioneer -- people in both parties have always been interested --
at least in my experience as governor -- in welfare reform, in
moving people from welfare to work.  One of the biggest problems
with welfare reform is this:  If you take somebody off welfare
and you put them in a low-wage job because they don't have much
education, they have to take that wage and pay for child care out
of it, because they're not home taking care of the kids anymore,
and they may not have medical insurance.  And the earnings are so
low there is a big incentive not to do it.

         This bill, this economic program, makes a major down
payment on welfare reform -- doing what I want to do, which is to
change the whole system and say after you get education and
training, if after two years you don't have a job, you have to go
to work in the public or private sector.  This bill starts that
by saying this:  If you   work 40 hours a week and you've got a
kid in your house, the tax system will lift you out of poverty.
We'll give you a tax break so that you will not be living in
poverty if you work full-time with children in your home.  What
else could be more American, and what else would do more to end
the welfare dependency we have in this country?  (Applause.)

         Now, let's talk about where we are with this.  This
bill's going to the Senate now.  Senator Kohl and Senator
Feingold are going to get a chance to work on it.  And everybody
in America -- if I said, wouldn't you like it if we did
everything I just said but we did it with more budget cuts and
even less tax, and you would say, yes; I would say yes.  Who
could disagree?  Who could disagree?  The question is, what are
the details?

         Let me try to describe to you what's going on.  When
you hear all this stuff, that this is a tax program -- this is
not just a tax program.  This is a budget cutting program.  This
is an investment program in your future.  This is incentives for
the private sector to create new jobs in ways that have never
been provided before.

         You know, in this bill, if you invest in a new
business and it makes money, and you hold that investment five
years, you cut your tax rate in half under this program.  That's
a real incentive.  Under this bill, if you invest money in a poor
neighborhood in Milwaukee, if it gets designated an empowerment
zone, you can get all kinds of incentives for private sector
investment that have never been available before -- ever; never
proposed by Republicans or Democrats before to get private sector
investment to rebuild.  (Applause.)  So there's a lot of things
in this bill.  (Applause.)

         But let's just take the rhetoric.  Everybody would
like to do all this with less tax and more budget cuts.  But look
behind the rhetoric.  For example, when the House voted on my
program last week, there was a Republican substitute.  The
Republican substitute purported to have the same amount of
deficit reduction I did with no taxes and all budget cuts.  Guess
what.  More Republicans voted against a Republican bill than
Democrats voted against my bill.  (Applause.)  Why?  Why?
Because the Republicans who voted against it thought it cut too
much out of Social Security, too much out of medical care, too
much out of farm programs, too much out of things that are part
of the fabric of this nation's economy or part of our built-in
obligation to one another.  So they disagreed.  They couldn't
agree on that.

         Let me give you another example.  Some define less
tax and more cuts as lower taxes on the very wealthy, replaced by
reducing the cost of living increase to Social Security
recipients barely above the poverty line; or to people barely
above the poverty line who are working, they want to reduce the
tax credits they get.

         Let me give you another example.  Others say, well,
just cut more Medicare costs.  Don't give those doctors and
hospitals any more money.  Now, that's got a lot of appeal to a
lot of people.  But let me tell you what happens.  If you cut
Medicare costs without reforming the health care system, you can
do it to some extent, but if you do it too much, you know what
will happen?  Every one of you who works in the private sector
who has a private health insurance policy, will have your
premiums go up as a result.

         Because if the government doesn't pay for the care
that the government mandates that people get, what do the doctors
and hospitals do?  They put the cost onto private business, onto
private employers and private employees.  And your health
insurance premiums soar.

         One of the reasons a lot of you are paying too much
for health care today is that American has 35 million people with
no health insurance, and other people who are being
undercompensated; and as a result of that, you're paying more.
Because everybody in this country gets health care, don't they --
they just get it when it's too late, too expensive, and at the
emergency room.  And you get sent the bill if you have health
insurance.  So it sounds good, but it may not be so good.
(Applause.)

         I could give you a lot of other examples.  The way
words are used.  For example, the way our adversaries calculate
this, if we ask upper-income Social Security recipients -- who
are getting more out of the system than they put in, plus
interest -- to pay a little more of their income to taxation,
then that's a tax.  But if we cut the cost of living allowance to
the poorest Social Security recipients, that's a budget cut.
Right?  That's the way they define it.

         Now, but most people in this room say, well, if you
have to do one or the other, better to ask people who can pay and
who are getting more back out than they put in plus interest to
give a little more than to take it out of the poorest ones who
are just above the poverty line.  (Applause.)  But if you get
into these word games -- it sounds terrible if it's tax and cut.
It doesn't sound so bad when you talk about what it really is.

         Here are the principles that I hope the Senate will
honor next week.  Number one, we've got to cut the deficit at
least $500 billion, and we ought to put it in a trust fund so the
money can't be fooled with for the next five years.  (Applause.)

         Number two, because of what happened in the last 12
years, any taxes we raise must, in the end, be progressive.
Those who can pay more should pay more, and we should minimize
the burden on the middle class.  (Applause.)

         Number three, don't do anything to the incentive to
move people from welfare to work.  Let's go ahead and say that if
you work 40 hours a week and you have a child in your home, you
don't deserve to be in poverty.  You've played by the rules and
we'll let you out of poverty.  (Applause.)

         Number four, keep the incentives for small
businesses, for new businesses, for investment in our cities, for
housing incentives, for research and development -- keep all
those tax incentives in there to grow this economy.  Don't take
them out.  (Applause.)

         And, number five, when we cut spending -- and we'll
cut some more and raise some -- we'll cut the taxes and have more
spending cuts next week.  But when we do it, let's leave the
money in there that will shape these children's economic future.
Let's have the money for education and training, for investment
in technology, for help for the defense industries that are
building down.  Let's rebuild the American economy.  Because,
after all, you can cut all the spending you want, and if people
don't have jobs and they aren't earning money, we're still not
going to be able to balance the budget.  So let's keep the
economic future of the country uppermost in our minds.
(Applause.)

         The last thing I'd like to say to you, my fellow
Americans, is that none of this is going to be easy, but you
should not be discouraged.  After all, these trends, as I said,
have gone through administrations of Democrats and Republicans
for 20 years now.  We are moving away from a set of policies that
have been the rule for 12 years.  I'm trying to move beyond a
bipartisan gridlock which has existed for about a decade.

         We are trying to do it in a global economy where
other rich nations have unemployment rates as high or higher than
ours, and there's a recession all over the world.  This is not
easy, but it can be done.  It can be done if we have the courage
to change direction.  And if we will listen and look beneath the
labels to the facts.  I believe we can do it.  It is simply a
question of asking what we have to do to regain control of our
destiny, what we have to do to invest in our people, what we have
to do to get jobs and incomes and health security back into this
country again.

         And let me just say one last thing in closing.  When
I was a governor for 12 years, my state in every one of those 12
years had a tax burden -- the state and local tax burden was in
the bottom five in America.  We had one of the toughest balanced
budget laws in the country.  And when I asked the people of my
state for more taxes it was always to pay for something specific
-- better schools, better roads, more jobs, in a trust fund.  I
never ever dreamed I be in a position in my life asking people to
pay $1 just to bring the deficit down.

         But we got ourselves in this fix, folks, over a long
period of time.  And until we get our interest rates down and
regain control of our economic future and show that we have the
discipline to handle our affairs, it is going to be very
difficult for us to do a lot of these other things that all of us
want to do.

         These decisions are not easy, but we must make them.
So I ask you again -- encourage Senator Kohl and all the other
people in the United States Senate, encourage Senator Feingold,
encourage them all, to give me a good budget with less taxes and
more spending cuts.  But remember the principles -- make sure the
money goes to deficit reduction; invest some in our economic
future, because that's important; make sure the people who can
pay do; don't take the welfare reform initiatives out of it; and
remember that in the end, the private sector creates the jobs, so
leave the incentives in there.

         And let me say this:  fifty of the 100 biggest
companies in this country have endorsed this program.  I have
been very moved that so many people in upper-income groups, who
are going to pay the overwhelming majority of these taxes, have
endorsed this program, because they know that it is imperative to
get control of our future.  (Applause.)

         And I ask you, the people of Wisconsin, to endorse
the program for the future of your children and our nation.
(Applause.)

         Thank you very much, and God bless you all.
(Applause.)

                               END12:55 P.M. CDT