SuperHack/SuperHack CD.bin/MISC/CG0223B.ZIP/2302

Text File | 1993-02-27 | 48KB | 885 lines

Remarks by the President to U.S. Chamber of Commerce Rally

WASHINGTON, Feb. 23 /U.S. Newswire/ -- Following are remarks by
President Clinton to the U.S. Chamber of Commerce National Business
Action Rally:

Constitution Hall, Washington, DC, 11:15 A.M. EST

THE PRESIDENT:  Thank you very much.  Chairman Gorr,
President Lesher, Vice Chairman Marcil, ladies and gentlemen.  I
thank you for that warm welcome.  And I welcome you to your Nation's
Capital and to this magnificent old hall.

I was glad to be here early enough to hear at least some
of the Marine Band warming you up.  That should put us all in a
better frame of mind.

I thank you all for you concern for your country and for
the contribution you make every year and every day to make America
work.  I want to say a special word of appreciation for the people
from my native state who even hung a sign up there so I could find
them.  (Applause.)

As you know, if you've been following the news, I have
been out on the road discussing with the American people the economic
plan I have presented to the Congress.  Yesterday I had a
particularly amazing day, seeing everything that is best about our
economy and some of the most profound challenges we face.  I began at
an interesting firm called Silicon Graphics in California's Silicon
Valley, where I spent a goodly amount of time visiting with the
employees and watching what they do.

The Vice President and I went there to outline our
technology policy.  But afterward we just talked to the employees and
listened to them.  I was amazed to see that this company, as so many
others in this country, has really succeeded in making the changes
going on in our world friendly to the company, its employees, its
owners and its customers, not the enemy.  As I have said so many
times across this country, I think one of my primary jobs as
President now is to try to figure out a way to make these turning
changes in the global environment our friend and not our enemy.

Silicon Graphics has unleashed the creative energy of
their most talented people.  They've made a strength of the diversity
that is so prominent throughout the state of California.  They
reduced bureaucracy to make it virtually nonexistent, pushed
decisions down to the lowest level, and succeeded in creating
products that are displaced every 12 to 18 months with their own
products.

Then I flew up to Washington to meet with the employees
at the Boeing Corporation, our nation's largest exporter, a company
that, as you know, is in some trouble now; it just announced 23,000
layoffs.  And after I met with several thousand of the employees
there, I had a hour private meeting with the heads of all the major
American airline companies:  with Boeing, with McDonnell Douglas,
with Pratt-Whitney -- those who manufacture the airplanes and the
component parts that are an important part of our economy.

They're facing some very tough competition.  They have
some structural problems in the market here, and I think have been
subjected to some fairly unfair competition abroad, principally from
Airbus, a consortium of European efforts that has benefited from $26
billion in direct government subsidies in the last few years.

I spent a lot of my adult life dealing with large
organizations in times of challenge and change.  I had the great
privilege to be Governor of my state for a dozen years.  And I have
acquired an enormous respect for people in the private sector and
what they've had to cope with in this country over the last 12 to 15
years, some of you over the last 20 years, as we have moved
inexorably into a very different global economy.

I came here today to ask for your support for my
economic plan to take this country in a new direction because I
believe it will make business more competitive and workers more
productive and will help us to deal with some of the principal
problems that we have faced over the last several years:  high levels
of unemployment periodically, stagnant wages among workers, lower
levels of overall productivity than many of our major competitors.

In the news today, there are things which are good news.
We know that in the last quarter, American productivity jumped to
almost a 20-year high as more and more American businesses have come
to grips with the challenges they face.  We know that the housing
markets are beginning to pick up, and that's good news.  We know that
in the last two months of the last quarter, consumer confidence took
a big jump, and that's good news.

But we also know that there are still very serious
problems in this economy with creating new jobs, serious problems
with stagnant incomes, and enormous problems that have led to
dampening the growth of new jobs in the small business sector.  The
restructuring of big business, which has been going on now for more
than a decade led to a reduction in employment in every year of the
1980s in larger businesses.  But in most of that decade, the
reduction in employment in big business was more than offset by the
creation of new jobs in small businesses.  In the last couple of
years, that trend has not been able to continue.

There are lots of reasons why -- clearly, the exploding
cost of health care is one.  The credit crunch that exists in much of
our country is another, and we're trying to address that.  And there
are many other reasons.  But is plain that the lack of a clear
national economic strategy to deal with our long-term problems has
played a central role.

My goal in this economic program is to follow a strategy
which will, short- and long-term, increase jobs, increase incomes and
increase productivity.  That means, in my judgment, we have to
increase investment, both public and private; we have to do more to
educate and train our people so that they can produce at high levels;
we have to take far better advantage of technology in the world,
especially in the commercial sector.

In the 1980s, the most successful industrial strategy we
had was our defense budget which kept our lead in international
defense technologies while we were losing our lead in many commercial
technologies.

We have to have a strategy for preserving our
environment that makes that an engine of economic growth, not a
burden on business and a drag on the economy.  We have to reduce our
inordinate government deficit.  We have to deal with the health care
crisis.  And we have to change the way government operates and
relates to the private sector in very fundamental ways.  (Applause.)

There has not been a serious reexamination of the
structure, the role and the function of the federal government in
some sort of comprehensive way in a generation.  And because we have
guaranteed claim on revenues and guaranteed claim on some customers,
we have not been under the same pressures that many of you have to
undergo the kind of searching reexamination that the international
economy has imposed on all of you.  And I am committed to doing that.

I ask you before we get into the details to look at just
two things:  First of all, if we do not think to change the
fundamental pattern of the way our national government works, if we
just keep on doing what we've been doing and argue around the edges
-- the Republicans winning a little here, the Democrats winning a
little there, everybody chipping around, but basically we keep on the
same course, here is what will happen.  By the end of the decade the
annual deficit will be $653 billion.  About 22 cents of every dollar
you pay to the United States government will go to pay interest on
past debt.  We'll be up to about 60 cents on entitlements by then
because of the exploding cost of health care and more people
retiring.  We will be spending a certain amount of money that we have
to spend on the national defense, and people in the Congress will
come to this city having made great campaign commitments to all of
you out in the country, and without regard to their party they'll be
arguing over how they're going to spend three or four cents on the
dollar because we will be paralyzed in the expenditure of the public
money, and we'll have less money to spend on investment in our
future.

We'll be spending 20 percent of the gross national
product on health care.  And no other country, if present trends
continue, will be above 10, which means every productive enterprise i
the country will be spotting its international competitors 10 cents
on the dollar in health care alone.  If we continue the present
patterns, that is what we have to look forward to.

We have no alternative but to change.  We should begin
with a program that increases public investment in technology and
education and in people, and brings this deficit down at the same
time.  That's hard to do.  This country has never tried to do that
before.  We've had times pass when times were good and the deficit
was brought down, and in times past when things were tough, the
deficit has been increased to increase investment.  Our nation has
never before tried to increase investment and reduce the debt at the
same time.  It is not easy to do.

I have offered a plan to do that that cuts spending with
real specific cuts, not rhetoric about overall caps; with tax
increases that I believe are progressive, although none are free of
pain; and with targeted, specific investments to grow this economy.

Now, already we're beginning to see some impact.  Just
since the election -- since the Secretary of the Treasury and other
people on our economic team and the President have been able to send
clear signals to the market that we are going to bring down this
deficit, there has been a .7 of one percent drop in long-term
interest rates.

Just yesterday, due to increased confidence in the plan
in the bond market, long-term interest rates fell to a 16-year low.
As a result, over the last several days mortgage rate have begun
another significant decline.  The serious drop in interest rates is
already providing a major stimulus to economic growth and major
savings to millions of American families.

As interest rates fall more people will be able to save
money on business loans, home loans, car loans, credit card
transactions; all these things will free up cash to get the economy
moving again.  If we do it right and deliberately, the vast majority
of American will save more money on lower interest rates than they
will pay in the higher energy tax.  Many businesses will save more
money on lower interest rates than they will pay in the other tax
increases.

By increasing the pool of available investments through
debt reduction, we can free up tax money away from interest on the
debt to invest in education in our future, and we can free up major
sources of funds in the private sector.

We have to do this together.  The reason the debt
portion of the package is important is that many of the changes which
happen in America that are good, by definition, have to happen
outside Washington.  Generations of experience has taught us that the
private sector functions best when the government supports it but
does not direct it; frames environment but does not intrude upon it;
when the climate is stable and sustaining, but when you can create
jobs and grow the economy through your own enterprise.

For many years I was charged with being the chief
advocate for the business community of my state.  I went around the
world trying to sell our products and increase investment in our
state.  We worked on a long-term strategy under the most difficult
imaginable circumstances.  When I took office in 1983, our
unemployment rate was in double digits and most our counties had
unemployment rates not only in double digits, but in the high
unemployment counties in the state we had several counties with
unemployment rates in excess of 20 percent.  And we set about to
increase investment, increase competitiveness, improve the education
and training of our work force.  Last year we ranked second in the
country in job growth, and for the last five years have been in the
top 10 -- not because of anything I did, but because of what we did.

There has to be a clear partnership here that empowers
the private sector to grow jobs by having the right kind of
environment, the right kind of incentives, and the right kind of
long-term commitments.  This is the sort of commitment that I seek to
bring to the nation with this national economic program.

I think it is impossible to underestimate the importance
of any particular element, although there are those who will.  If we
don't reduce the deficit, long-term interest rates don't go down and
the government spends more of your money paying interest.  If we
don't cut spending, the deficit reduction package has no credibility.
And besides that, a lot of this spending really needs to be cut.  If
we don't raise some revenues, we won't really cut the deficit as much
as we should.  And if we don't have some targeted investments, we
will ignore the fact for the last 12 years, while other countries
have been putting more into infrastructure, into technology and into
education and training relative to the efforts of our competitors, we
have been declining.  And in absolute dollars, our federal effort has
declined in many critical areas.

So I would argue that we need a comprehensive approach.
But let me be clear again:  This administration understands clearly
that the private sector is the central engine of economic growth.  I
have tried to put together a plan that will enable you to succeed.
(Applause.)

I hope that this plan and this speech, frankly, is just
the beginning of a continuing dialogue between us.  I don't accept
the conventional wisdom that a President has about six months, and
after that everybody's running for reelection and everything's over
and the political climate takes over.  The truth is that we have been
going in a certain direction economically for two decades, and we
have been in the grip of a partisan and interest-dominated gridlock
for a long time, and it is not going to turn around overnight.  And a
lot of the things that I have to do here with our business cannot be
done overnight.  And so we need a dialogue, a set of continuous
changes.

If it is true that business has to manage change on a
constant basis, surely it must also be true of government.  We can no
longer afford the luxury of being told that the President has a year
to work and after that everybody just waits around until the next
election.  That is a highly unproductive way to spend your money.
And I believe we can do better.  (Applause.)

Every one of you whose ever run any sort of enterprise
knows that there comes a time in the life of any organization when
the person in charge has to face facts and change or just let the
thing drift into decline, maybe sudden loss.  I sought this office
because I became convinced that the classic American idea of
progress, the idea that if we worked hard, played by the rules, made
the necessary adjustments, we'd all do a little better and we could
certainly leave a better life to our children.  And that idea had
been imperiled by our failure to face many of the fundamental
realities about which I have already spoken.

Our government has responsibilities which have been too
long neglected -- to run a balanced economy, to invest in our people,
to support business ability, to create wealth.  In this city, people
are very good at blaming one another for who did the wrong thing and
pointing the finger at one another, but we've not been very good in
the last few years at forgetting about blame and assuming
responsibility.

Last Wednesday when I gave my State of the Union speech
to Congress, I said to the Republicans and the Democrats in the
audience, and I say to you, that I don't much care anymore whose
fault our problems are.  I do think we should all be willing to
assume responsibility for improving the situation.  And if it gets
better, I could care less who gets credit for it.  But the time has
come to go to work.  (Applause.)

I think that, to be fair, before I ask any of you to
change anything, I need to set an example with the federal
government.  (Applause.)  Let me begin by saying there are an awful
lot of good people who work for you everyday in the federal
government -- (applause) -- people of astonishing dedication.  And
like any other business, there are a lot of people who are out there
in the federal government who know a lot more than I do about what we
could do to change it to save you money and to make it work.  But as
an institution, our system has become too large, too slow, too
unresponsive.  (Applause.)

The government accepts, even when it's doing things that
you would all agree with, is often locked into a style of management
and outmoded priorities on spending and regulation and rule-making
that hamper even the best of intentions.  Really, if this government
were a business, it would have gone under a long time ago.
(Applause.)  And again I say, not because of the people working here
-- most of the people who work for you decided to do this because
they love their country, and they believe in public service -- but
because we have simply not been forced to undergo the discipline of
reexamining how we do our business.

And so it is time to take stock of government, not just
from the point of view of cutting, but from the point of view of how
it can be made to work.  We have to look through every program and
ask if it works.  I've said this before, but I'll say it to you in
case any of you missed it -- I felt enormous sympathy for all my
predecessors when I walked into the Oval Office and found that I had
Jimmy Carter's phone system operating with Lyndon Johnson's
switchboard.  (Laughter.)  It was a metaphor for how business is
done; where people who actually -- when you call into the White House
there's someone actually there picking up a wire and hooking it into
the extension.  (Laughter.)

And I might say, they're some of the most valuable
people we have, because they do something that every modern
organization needs -- they can find anybody in the country when they
need to.  (Laughter.)  And we certainly need those operators to do
that.  But the point is that that really is a metaphor for the fact
that government often feels that it doesn't need to reexamine it.

I found that I could not have a conference call as the
President of the United States in the Oval Office -- (laughter) --
except for one:  anybody in the central office who wanted to hear
what I was saying could punch the lighted button and listen.
(Laughter and applause.)  We also found, interestingly enough, that
while it cost money to change the technology on telephones, we were
actually spending more money that we should be on monthly service
charges and operating charges because we had an antiquated system.
It was amazing.

Well, anyway, I think the government has to set an
example.  So I have submitted to the Congress a budget that, in the
coming fiscal year, will cut the White House staff by 25 percent
below what it was when my predecessor left office.  And not only
cutting it, but reorganizing it so that it will function better.
We'll have a smaller drug policy office with more influence and more
impact.  We'll have an Economic Policy Council for only the second
time in our country's history to go with the Domestic Policy Council
and the National Security Council so that we can bring all the people
who have an influence on economic policy together and focus on every
aspect of it so that the right hand knows that the left hand is
doing, and so that, hopefully, we can do a better job of anticipating
the real consequences of any decisions which are made.

I've also asked the Congress to cancel next year's pay
raise for federal employees and to -- (applause) -- to reduce their
raises in each of the following three years.  Not because I want to
hurt those people -- they make this government go -- but because we
have to tighten our belts before we ask Americans to tighten theirs.
(Applause.)

I have submitted a budget that reduces the
administrative costs of every federal agency in the next four years
by three percent, three percent, three percent and five percent -- a
total of 14 percent; and which will reduce by attrition, not by
firing, the federal work payroll by $100,000, for savings in excess
of $9 billion.

And I was pleased the other night when I went up to the
Congress to deliver my talk that the leadership told me they were
going to reduce the staffs of Congress by the same amount that we
reduced the administrative budget of the federal government, which is
a real change and a welcome one.  (Applause.)

We have also tried to reduce a lot of the executive
perks to set an example.  A lot of our Secretaries are now eating in
the dining room with their employees, and they're finding they're
learning more during the lunch hour about how we can improve the
agency than they could have in all the meetings that have been
scheduled.

But these things are the tip of the iceberg.  We have
really got to find a way to reinvent the way the government works, to
bring modern technology and modern management practices to the
wrkplace, to speed the flow of information, streamline decisions,
and empower people at the grassroots level.  I want you to be able to
look at your national government a couple of years from now as a
model for customer service, not a bureaucratic monstrosity.
(Applause.)

As an indication of that commitment, I have appointed as
the Deputy Director of the Office of Management and Budget for
Management, my friend Phil Lader, a remarkable businessman from South
Carolina, who understands these concepts and will be able for the
first time to make the management part of the Office of Management
and Budget as important as the budget part.  It's not just important
to cut the spending, it's important that whatever you give us we
spend right.  And I think we can.  (Applause.)

Let me just give you one example.  We have contributed
an inordinate amount of money to the Superfund to clean up sites
which need to be cleaned up.  The money is being used to pay lawyers'
fees instead to clean up the sites.  We might as well have just have
been crass and said, we don't care about the environmental
consequences; we're not going to raise this money; we're not going to
have a fund.  Then we could pat ourselves on the back and say, we're
really concerned about this environmental problem of toxic waste
sites, and so we raised the Superfund.  Except the fund's not being
spent to clean up the sites.  We're going to find a way to spend that
money cleaning up pollution, not paying for lawyers.  That's the kind
of thing we have got to do if we're going to run this government
right.  (Applause.)

There are also 150 very specific budget cuts in this
budget.  And to people who say to me, well, you ought to be able to
find more, I say, that's right, but there's 150 I found in four weeks
that haven't been there in 12 years, so I feel that we're doing
pretty good.  (Applause.)

And I'm ready to -- I'm more than happy to do more.  But
since the first budget President Reagan submitted in 1981, which did
have a lot of very specific budget cuts, this budget is the one that
has the most specific cuts.  Not saying to the Congress, well, lets
put a cap on this or a lid on that and you all figure out how to
distribute the pain, but saying, I'll take responsibility for
angering these constituencies by cutting this spending.

Can we do more?  Of course, we can.  But we had to get
off to a fast start.  And I have made a good-faith offer to
Republicans as well as Democrats, and to the Congress, and to people
around the country to talk about how we can do that.  It is very,
very important.

The second thing I want to say to you, however, is that
there is a big structural deficit which it is difficult to overcome
by budget cuts alone, for this reason:  Every year we grant cost of
living increases to people on Social Security -- and we should.
There is a surplus in the Social Security tax fund which is being
used to make the deficit look smaller.  And that is very hard on
small business in America, by the way, that we finance so much of our
government through the payroll tax.  (Applause.)  We'll need those
payroll taxes later, but not now.

We have increases in health care for the same reasons
you do -- that is the cost of health care is rising faster than the
rate of inflation.  That drives up the cost of Medicare for the
elderly and Medicaid for low income people.

And then we have another problem aggravated by the flaws
in our system, which is that every month in this country 100,000
Americans lose their health insurance and some of them are eligible
for the Medicaid programs for the working poor, so our costs go up as
private sector folks can't afford to cover people with health
insurance anymore and they get pushed onto the government payroll.
So those increases occur and will continue to occur until we reform
structurally the health care system.  And I'll come back to that in a
moment.  So those increases are there.

Then there are some programs that I think are quite
central to our economy that require us to continue to fund them.
Many are controversial with those who don't benefit from them, but I
believe in some of them.  I'll tell you a couple I believe in.  I
think that we should continue to fund the superconducting
supercollider because I think it's good science, even though it's
expensive.  (Applause.)  We are going to create a lot of jobs in the
future through investments in technology and science.

I believe that we cannot afford the space station design
we have been operating on.  And it hasn't been properly funded for
years and it's having huge costs overruns.  But I think there should
be a space station program that supports our shuttle program and
supports the kinds of technological benefits that space  has produced
for the American economy here down on the ground over the last
several years.  And so I will support that, though we will not
increase that spending as rapidly as it would take to support the old
design.  But we will do enough to keep all the people that are
working, working in this area that I think is important.  And that
means we'll spend more money on that, and I think that's significant.
But there still will be net budget cuts that are very deep, and I'm
looking for more.

I also want to say that I intend to make reports to you
on that, and before we get to any tax increases I want to know that
the spending cuts are going to be there.  I will not sign a tax
increase without the spending cuts.  (Applause.)

The tax problem, as you know, is highly progressive.
And some say that it is so progressive that it will discourage people
from reinvesting.  I would just ask you to study the whole thing.  We
provide for the first time in the history of the country a permanent
investment tax credit for small businesses for 90 percent of the
employers who have 40 percent of the workers, but create a majority
of the jobs in this country.

We provided alternative minimum tax relief for the big
capital-intensive businesses of this country, who have told us
repeatedly that the alternative minimum tax treatment in the present
tax code actually discourages people from making investments.  We
have provided some relief from the passive loss provisions of the
income tax code for people who are in the real estate business,
because I think that has aggravated the condition not only of real
estate, but of some of our banks, and contributed to the credit
crunch.  So I think there will be both direct benefits to real estate
and indirect benefits to people who had to get bank financing by
changing this passive loss provision.

And there are lots of other things in this bill which I
think are important to the creation of jobs.  So I ask you to look at
it as a whole package and to recognize that we have to, again, move
away from a tax system that is based too much on fixed rate taxes,
like excise and payroll  taxes, more toward income taxes that have
also offsetting incentives to invest.  I believe that that is the
proper direction to go.

I know there is also some controversy over the energy
tax.  And I'd like to talk about that for just a moment.  If we are
to find more revenue, I would rather not tax work and effort of
working people.  I would instead rather have some tax that operates
on consumption and promotes energy efficiency in the development of
alternative energy technologies.  We have the lowest energy taxes in
the world by far.  And there were -- there was an enormous consensus
among the deficit-reducing folks all over the country that there
ought to be an energy tax, but a big difference about what kind it
ought to be.

There were those, principally in the east, who said we
needed a huge gas tax.  I can hear the groan from my folks up there
in the gallery.  It's tough on people who live in the west or who
have to drive long distances to work where there's no public
transport, where there's no practical carpooling.  It really could
have an adverse impact on sectors of our transportation economy.

Then there were those who if you want only to clean up
the environment, you should have a carbon tax.  The problem is,
that's pretty rough if you're from Pennsylvania or Ohio or West
Virginia or someplace where coal is important to the economy and
where you're already bearing the enormous burden of the enforcement
of the Clean Air Act.

So this BTU tax, taxing the heat content of energy,
seemed to be a fair way of spreading the burden in a limited way
across all energy sources, in a way that would still do what I think
needs to be done, which is to promote conservation and not undermine
something else that I strongly support, which is the increased
production of natural gas in America.  It's our fuel, it's clean and
it will create enormous economic opportunities in the future.
(Applause.)

I want to say again, I don't want to raise one penny of
this money unless we have the spending cuts.  Not a penny.
(Applause.)  And I am sure, after now almost five weeks in office,
that there are more cuts coming.  I can tell you I will find more.
And I think we have gotten everybody in the national government
interested in finding more.  And I encourage you to give us more.
Nothing is off the table, except those things that reflect the
fundamental interest of the American people.

But remember, we don't want to do anything that will
further erode our investment in our children and their future in
programs that are working.  Indeed, we need to do more there.  And we
cannot afford to break the fragile bond of responsibility we have
with elderly people who live on Social Security for all their income
and who need Medicare for their health care.  We can reduce further
health care expenditures of the government, but only in the context
of an overall resolution of the health care crisis.

The plan I have presented will reduce the deficit
substantially and fairly.  And if we do, it will mean lower interest
rates.  You can see that already by this historic low in long-term
interest rates coming out today.

I also want to say, however, that in my judgment, there
are some things we should invest in -- not just the things I've
mentioned for business:  the permanent investment tax credit for
small business, the targeted capital gains tax, the technology
extension center, the manufacturing changes in the alternative
minimum tax, the incremental investment tax credit that will be
available to every business in America over the next couple of years.
But there are also some things that we need to invest in our people.
And I'd like just to mention one or two of them.

Another change in this tax system is one that I will
hope you will all support, and it is the one that enables us to hold
harmless to 40-plus percent of the taxpayers with incomes of $30,000
or less.  This is a dramatic increase in the refundable earned income
tax credit for working people.

This mechanism in this plan will enable us to say for
the first time in the history of the country, if you are a full-time
worker with a child in your house, you will not live in poverty.
(Applause.)  Let me say why I think that is so important.

One of the things we have to deal with in America to
make ourselves more productive is how we can reduce the volume of the
large underclass we have; the people who are permanently trapped in
poverty; the children living in the big cities.  And we have to think
of strategies to deal with that.  Some of those things are things
that I think you can do.  I have proposed, for example, urban
enterprise zones which give huge incentives for private sector
investment in depressed areas.

But we have to break the psychology of poverty and
dependence on the government.  I will come forward later this year
with a welfare reform proposal that will literally end welfare as we
know it -- will say we'll have education and training and child care
and health care -- after two years you've either got to go to work or
do public service work to draw an income tax from the government.
(Applause.)

But consider this:  We also need to build in incentives.
You know as well as I do from the people you work that an incentive
system is better most of the time than a rule-making system.
(Applause.)  So we can have a welfare rule-making system, but you've
got to change the incentives.  How many working women are there in
America today who barely make ends meet because of the cost of child
care?  I mean, an enormous number.  (Applause.)

So what this refundable earned income tax credit will do
is to change the economic system.  It will say, we are going to
reward work.  You put in your 40 hours, you've got a kid in the house
-- if we need to, we will refund money through the tax system, but
we're going to lift you above the poverty line so no one will ever
have that as an excuse not to be a productive citizen.  If everybody
in this country were working, we wouldn't have half the problems that
the government wrestles with here all day, every day.  (Applause.)
And I hope you can support that.  (Applause.)

Now, let me just make another couple of comments that
relate to this.  In the next few days we will be announcing some
initiatives that we're going to take from a regulatory point of view
to try to deal with the credit crunch, to try to make it possible for
banks to loan money to businesses again, to try to release the
energies for the old-fashioned character of small business loans to
try to reduce the fear that a lot of banks have that if they make
sensible loans the government will come down on them.

I think that the improvement in the books that will come
from changing the passive loss provision, plus the regulatory changes
we make will really make a dent in this credit crunch problem,
especially in the areas of our country where it has been so profound.
And if it isn't, you let me know about it in a few months and we'll
do something else.  We have got to deal with this problem for small
business to grow again.  (Applause.)

Now, let me talk just very briefly about what I think
will become very quickly a controversial part of this program.  There
will be those who want to cut spending and wish we didn't have to
raise any taxes, who will say you wouldn't have to raise so many
taxes if you didn't spend any new money on anything.  And that is
absolutely true.  I admit, that is absolutely true.  I want you to
know what I propose to spend new money on and why, in addition to the
tax incentives I've already discussed.

First of all, I want to increase research and
development in new technologies that will create new jobs and new
economic opportunities -- dramatically.  (Applause.)  Not only by
making the research and experimentation tax credit permanent, but by
increasing commercial R&D by more than we reduce defense R&D, and by
emphasizing dual-use technologies in defense research and
development.

It is killing me to look at the numbers when you compare
the percentage of our income we're spending on research and
development in America compared to our competitors.  Five years, ten
years, twenty years from now, that means more high-wage jobs
somewhere else and fewer high-wage jobs here.  And we cannot tolerate
it.  We must again achieve competitive levels of R&D, and that is a
worthy expenditure of your tax money.  We have good people who will
do that right and spend it efficiently and I would hope you would
support it.

There is no way the private sector can equal the
aggregate efforts in Germany, Japan, or any other rich country,
provided there by enormous public sector investment to support the
private sector.  So I hope you'll be for that.  (Applause.)

Secondly, I think we have to invest more in our
infrastructure -- in our roads, our bridges, our airports, in high-
speed rail, in water projects, in sewer projects, in environmental
cleanup.  We are again spending a much lower percentage of our income
on that than all of our major competitors.  And that bears a direct
relationship to productivity, to wealth generation, and to the cost
of doing business in the private sector.  So we propose to fully fund
the Surface Transportation Act and to do a lot of things in this
area.  (Applause.)

Third, we propose to really invest some money in
targeted people investments that will increase productivity.  Let me
just mention three or four.  Number one, we want to spend some new
money to set up a network that will permit us to immunize every child
in America by the age of two for preventable childhood diseases.
(Applause.)  For every dollar we spend on that today we will save
$10.00 in the future in preventable diseases.  We are dangerously at
risk of new outbreaks of diseases because our immunization levels
have fallen so low.

Most of the controversy you've seen in the press is
aout the price of vaccines and that's a legitimate issue.  But it is
also true that we don't have the delivery network in this country we
need.  And as a result, we have the appalling statistic that in
America, which produces vaccines for the world, we have the third
lowest immunization rate in this hemisphere.  Only Bolivia and Haiti
are lower.  It is unconscionable.  We can't justify it.  For a little
bit of money today we can save big bucks tomorrow.

Secondly, we ought to fully fund the Head Start program,
because it is a proven success that will save us $3.00 tomorrow for
every dollar we spend today.  (Applause.)

Those are among the things that I think we should do.
Let me just mention two others.  We ought to have an apprenticeship
program in America that guarantees every high school graduate access
to two years of further quality education in the workplace, in a
community college, in a vocational institution.  The federal
government's responsibility here is basically to help states in the
private sector create networks and to fill the funding gap.  For next
to no money we could bring our two-year education program up to where
it is universally accessible to all Americans and it is at a level of
quality comparable to our competitors.  We are not there today.  For
not very much money we can do that.

The next thing I think we really ought to do --
(applause) -- the next thing I think we have to do is to open the
doors to college education to all Americans.  Not just open them, but
keep them open.  (Applause.)  The college drop-out rate today is two
and a half times the high school drop-out rate.  And one reason is
that a college education is about the only thing that increased more
rapidly than health care costs in the 1980's.

Now, all of you need to think about this as this is
something you can do that I can't since all these college, none of
them are federal institutions.  Something needs to be done to contain
the rising costs of those colleges.  But in the meantime, we need to
make sure that young American are not dropping out just because they
can't afford to go.

The student loan program today is wildly expensive.  It
costs $4 billion a year, $3 billion in defaulted loans alone.  And
what we need to do is to set up an income contingent repayment plan
so everybody can pay back as a percentage of their income, which will
reduce the incentive to default; really stiffen the collection
measures, including involving the IRS in it.  I'm tired of people
making money and defaulting on their loans; that's not right.
(Applause.)  But we also should make available the opportunity for
many young Americans to pay back their student loans by serving their
country -- by going home and working as teachers or police officers,
or doing things that need to be done in the community.  (Applause.)

We can rescue a lot of these kids out of inner cities by
letting them work before they go to college and put in time in
bilding up credits so that they then turn their loans into
scholarships before they even go.  These are things that ought to be
done.  (Applause.)

You know, when President Kennedy started the Peace Corps
it shaped the imagination of a whole generation.  We need a peace
corps here at home to deal with our problems here at home, and it
needs to be much bigger than the Peace Corps ever was.  (Applause.)

Finally, let me just make this point:  If we cut
spending, increase revenues, target investments, we'll have a
government that will go in the right direction for the next four
years with real discipline.  If you want to get to the end of the
decade with a healthy American economy, we have to do something else.
We've got to reform the health care system.

In five years, projected government expenditures on
health care would go from $210 billion to $350 billion.  A two-thirds
increase.  Annualized increase of 12 percent per year.  We are
already spending as of the end of 1992, 14 percent of our gross
domestic product on health care.  No other nation in the world except
Canada is over nine, and they're just barely over nine.  And our
health indicators are not all that much better.  In fact, they're
quite worse in some areas.

Now, this is not a simple problem.  This is the most
complex issue with which I have ever tried to come to grips.  But one
thing is pretty clear:  If present spending trends continue, we'll be
bumping 20 percent of GDP by the end of the decade, and you can
forget about our being competitive in manufacturing.

At our economic conference in Little Rock, Red Polling,
the Chairman of Ford Motor Company, pointed out how Ford's health
care costs had risen by 800 percent in the last 20 percent, and now
they spend as much on health care for workers as on steel for cars.
Almost $1,100 of the price of each American car is in health care.
Our competitors in Japan have only $550 in a car -- hard to be price
competitive and make money.

Small business are hit even harder by health care costs.
And for many self-employed people and farmers, it's impossible to get
health care.  As I said earlier, 100,000 Americans a month are losing
their health insurance.  Seventy percent of the small businesses in
this country are still providing health care to their employees, but
they're hurt very badly by insurance rating practices in most states.
And workers are terrorized by the fact that if they or someone in
their family has ever been sick they have a preexisting condition
which locks them into a job.

I had dinner the other night with a high school friend
of my wife who is a wonderful small-business guy with four employees.
And one of his employees just had a child with Down's syndrome.  And
he told me, he said, you know, that guy and I, we're partners for
life now.  And he said, he really can do better.  He's a gifted
person.  I want him to be able to go on and move, and he can't.

And more and more businesses are having to give up their
health insurance every year or run the co-pay so high they might as
well be giving up on it.  And that, as I said earlier, is driving
some people back down into the federal government's and the state
government's health care system.

What I want to do is to find a way to preserve what is
best about American health care -- the right to choose your doctor,
the technology that we have -- and stop the incredible waste on
paperwork, which means that clerical workers are being hired at four
times the rate of health care providers in hospitals and doctors'
offices.  (Applause.)  On unnecessary technology, on the absence of
preventive and primary care, on all the things that we know that are
wrong.

And sometime in the next several weeks, within 100 days
after the time I took office, we'll be presenting a plan to the
Congress and the American people to deal with that.  But I want to be
up-front about this.  The plan -- the economic plan I have presented
will bring that debt down for four years.  If we don't deal with the
health care crisis, it's going to turn around and go right back up in
the next four years, just like your costs are going to.

We have got to face this.  Every other advanced country
in the world has devised some system which works better than ours
does to keep costs closer to inflation while providing a basic
pckage of benefits to all Americans.  We cannot fix this economy
over the long run unless we do that.  It is inhumane.  It is also
very bad business to let the status quo persist.  (Applause.)

Let me close just by saying that if every American looks
at my proposal in terms of what is best for him or her, at least one-
third of it will seem unattractive.  That is, if you're an upper
income person who has to pay the income taxes, you would say, give me
the budget cuts and don't increase spending.  Unless you're in a
technology-related business in which you might say, give me the
budget cuts and the new investments, but forget about the tax
increases.  Or if you're an educator, you might say fund Head Start.
A middle class person might say, tax the rich and spend the money on
new jobs; cut the budget, but forget about the energy tax.  A lower
income person might say tax the wealthy; give me the new spending,
but forget about the budget cuts.

In other words, if everybody looks at this just through
the prism of how it will immediately affect you, it's a nonstarter,
because there's no way you can bat three for three.  (Applause.)  We
can't get there.

And that's why I say to all of you what I have asked the
American people to do, to ask -- I invite your efforts to improve
this, to say what's wrong with it, to say how we can make it better.
That's fine.  But ask the question, not just what's in it for me, but
what's in it for us.  This country has got to change.  (Applause.)
We know we cannot stay on the present course.  We know we cannot stay
on the present course.

We also know if we look ahead to the future that the
next 20 years could be the best years this country every had.  But
we've got to increase productivity, we've got to increase job
generation, we've got to increase income, and we've got to increase
our ability to rely on all the American people.  We do not have a
person to waste.  I believe this program achieves those objectives,
and I ask for your support.

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

END 12:10 P.M. EST