Interview with J.P. McCarthy of WJR radio, Detroit, Michigan - President Bill Clinton - Transcript

Weekly Compilation of Presidential Documents, June 28, 1993

Mr. McCarthy. Good afternoon, Mr. President. How are you?

The President. I'm great. It's nice to talk to you again.

Mr. McCarthy. I can't hear.

The President. Can you hear me now? I can hear you. Can you hear me?

Mr. McCarthy. Mr. President, I can now. How are you? We haven't talked since very late in the campaign. You were in an automobile someplace, and you were running out of voice. But you were in high spirits, and now we know why. Congratulations.

The President. Thank you very much. It's nice to hear your voice again.

Mr. McCarthy. Nice to hear you.

The President. I got to hear a little bit of your last conversation. That was fascinating.

Mr. McCarthy. With Bob Talbert?

The President. Yes.

Economic Program

Mr. McCarthy. Mr. President, are you going to get your tax bill and your budget bill through the Senate? Carl Levin is on this program a little bit later. We've already taped that segment. He says, yes, it will be done. What do you think?

The President. I think it will be done. It's not easy ever to make these kinds of tough decisions. There are $250 billion in budget cuts in that bill that affect everything from agriculture to veterans, to Medicare, to virtually all the specific programs in the Government. And there are some tax increases, as is well-known, two-thirds of them on people with incomes above $200,000, three-quarters of them on people with incomes above $100,000. I think it's fair and balanced. And this will bring the deficit down by $500 billion, and it will keep these long-term interest rates coming down, which is what is so necessary if we're going to have reinvestment in our country and rebuild the manufacturing sector and get this economy going again.

I think it will pass because, frankly, there isn't another alternative. And those who have tried to fashion other alternatives have come up with programs that hurt the vulnerable in our country and the middle class more and hurt the business economy more. And I think that's why we've had people from companies representing the automakers to high-tech companies in California supporting the program. It's a little-known thing that over half the 100 biggest companies in the country have supported the program, that the labor organizations have supported it, that the home builders organization, a largely Republican group, have supported it because it will bring interest rates down and create jobs and incomes for the American people.

Mr. McCarthy. But if it does pass the Senate, and apparently Senator Levin feels you have enough votes, 50 or more votes, it has to go back to the House. It's been changed significantly from the bill approved by the House. We hear the Black Caucus may be falling out of step. Can it pass the entire Congress?

The President. i think it can. i think what you will see is, when the bill passes the Senate, if we can pass it in the next few days, then there will be a conference of the Senators and the House Members. And they will try to take the best parts of both bills and come up with a bill which has more budget cuts than taxes, fair taxes, but still has some of the incentives we need for small business job creation, for the high-tech job creation, for empowerment zones to get private sector investment into the urban areas and to the poor rural areas, and also some of the money for Head Start education and training and for joint projects with the private sector for new technologies to help to deal with the defense cuts. I think you will see that budget coming out of there. And I expect it to pass both Houses.

Like I said, these are difficult times, because for 12 years the American people have been told one thing and had another thing happen where the debt just kept getting bigger and bigger, and it's eating us alive. And interest rates were high, and we couldn't get investment, we couldn't get jobs. We're going to turn it around, but it's not easy.

Mr. McCarthy. A couple of things started to leak out this weekend on those weekend Washington shows. One item was that entertainers and sports people, people who make big salaries for usually a relatively short period of time, would be exempt from the new higher rate of income tax. Is that true?

The President. Not to my knowledge.

Mr. McCarthy. Apparently it was on "Face the Nation" or one of those shows yesterday. Not so?

The President. No. There aren't any exemptions. I think what you're going to find is that people who make a lot of money for just a couple of years may wind up doing something that many of them already do, by the way, which is structuring their contracts so they get paid over a longer period of years than they play. That's something that's happening now and that may happen. But I know of no exemptions for any high income people.

Mr. McCarthy. And the surtax on the capital gains tax, everyone was figuring maybe there will be a capital gains cut. Maybe that will be a tradeoff, higher income tax rates, lower capital gains. Will there be a surtax on capital gains?

The President. It's hard to say. That's in the Senate bill. But I'm not sure how it will come out in the end. I think one thing you can look forward to is a so-called venture capital gains on new business capital gains tax, where people who put their money into new businesses will be given big incentives to do so. That is, if you take a risk on somebody and you start a new venture and you hire some new people to create new jobs in the economy and you hold that investment for 5 years or more, you'll be able to reduce your tax liability if, in fact, it turns out to be successful. We have to have more people trying to start new businesses. And that's a more hazardous undertaking. So I think you will see that.