Remarks in a teleconference with Democratic governors from Little Rock, Arkansas

Weekly Compilation of Presidential Documents, June 26, 1995

So we've got to balance the budget. But I'm hoping what you can do is to help me reach responsible Republican State legislators, State office-holders, Governors, and thoughtful independents to say let's do it, but let's do it in the right way.

Let me make just one other comment. Roy Romer pointed out one of the possible indirect impacts of the Republican budget, which was to--if we cut health care too much here and you have to take up the slack at the State level, you'll invest less in education. So we'll be cutting education at the Federal and the State level because of this budget.

You have pointed out two other indirect impacts, which we have already seen over the last 10 years. On health care, if we don't cover the full cost of health care for those who are insured by the Government, then hospitals and doctors will simply shift that cost on to private citizens and on to their health insurance bills, which will put more and more pressure on more and more employers to either drop health insurance coverage altogether or to dramatically increase the cost of it. And if we cut taxes too much here in Washington and put you in a bind at the State level or people at the local level, there will be offsetting increases at the State and local level.

Now, we know what happened in the 1980's, the tax cuts in Washington mostly benefitted upper income people. The tax increases at the State and local level, because they were concentrated on sales taxes and property taxes, mostly taxed middle income people. So again, I think we ought to think about protecting the middle class. Most American wage earners are working harder for the same or lower wages than they were making 10 years ago. We don't need to lower their incomes by these budget decisions.

So I would say anything you can do to tell the Democrats and others who aren't for a balanced budget they ought to be for a balanced budget--I appreciate what you said, Evan, about the Beltway, as opposed to the heartland, I think most Democrats out there in the country are with us; that's positive. But anything you can do, to go back to Governor Romer's point and your point, to try to help the American people and the press, who communicates to the American people, understand the indirect consequences of this budget, for education, for health care, and for taxes, I think will be very, very helpful, because there will be significant indirect consequences that ought to be taken into account.

[Gov. Tom Carper of Delaware endorsed the President's plan. GOD. Bob Miller of Nevada pointed out that the congressional plan failed to consider the impact on States which faced rapid growth and asked if the President's plan addressed that concern.]

The President. Yes. We maintain the present approach, for example, toward helping States fund welfare. And if you had a huge increase in the number of poor children, under our plan, there would be provisions for funneling more funds there in ways that would enable you to match them and go forward. Under their plan, they're going to cut it so much there's no way they can take account of growth. They try to on welfare for poor kids, but they just can't get there. There's no way, just because the size of the cut.