Interview with the Nevada media - interview with President Bill Clinton - Interview

Weekly Compilation of Presidential Documents, August 9, 1993

August 3, 1993

The President. Thank you, Gary, and thank you, Paula. First of all, let me thank all of you for giving me a few moments of your time today in order that we might together communicate directly with the citizens of Nevada about a whole range of issues, but especially about the economic program that the United States Congress will be voting on in the next few days.

I've worked hard to put together a program that would achieve the very important principles I outlined when I became President. We want to reduce the deficit by $500 billion. We want to do it in a way that focuses on specific spending cuts, over 200 of them, and has at least as many cuts as new taxes. We want the new tax burden to be fair. And in this program, now over 80 percent of the burden will be borne by people with incomes above $200,000. The average cost for a middle class family with an income of about $60,000 a year will be $33 a year in the 4.3 percent fuel tax. Working families with incomes of under $30,000 will be held harmless. The fourth thing we want to do is to make sure that this program promotes jobs and growth. After all, that's the objective. If we pass the program, we'll keep interest rates down and that will make it possible for people to refinance their homes and businesses and invest at low interest rates for high growth.

We also have incentives in this program that I think are very important. Number one, over 90 percent of the small businesses in America will be eligible for tax reductions if they invest in their businesses and in new jobs and growth and opportunity. Number two, we support research and development. Number three, we support new firms, especially new high-tech firms, and their attempts to get new capital by giving a capital gains break of 50 percent for people who invest in these new and small firms for 5 years or more. And finally, this program lifts up work and family, supporting most importantly the working poor. For the first time ever if this program passes, through the tax system, people who work hard, have children in their homes, and are still below the poverty line will be lifted above poverty, not by a Government program but by reductions in the tax system. This is a program that will get America on the move.

Finally, I want to say that if we do what others ask and just delay, we might run the risk of what happened in 1990, fooling around for 3 months, wasting valuable time when we ought to be dealing with the health care crisis, with welfare reform, with a new crime bill, with urgent matters that will bring more jobs into this economy, and winding up with a program as in the 1990's that doesn't work. This is a good, fair bill. It will make a good difference to America. And I hope that the Senators and the Congressman from Nevada will support it. I hope, most importantly, that the people of Nevada will support it.

I'll be glad to answer your questions.

Q. Mr. President?

The President. Yes.

Q. Hi, Mr. President. Greetings from Nevada.

The President. Thank yon.

Economic Program

Q. First of all, many Nevadans appear to be losing some trust in Washington. At the same time, too, Nevada has been a State that has created quite a few jobs over the past few years. But now you offer a budget package that seems to hurt our big business, in other words, tourism, with the gas hike. Why should Nevadans buy into this gas hike?

The President. Well, for several reasons. First of all, it is a modest one, and gasoline is at its lowest real price in 30 years. In other words, if you adjust for inflation, gas is cheaper now than it has been for 30 years. This fuel tax increase is quite modest and, for example, will be a much lower burden on fuel than the Btu tax which the House of Representative originally passed.

Secondly, there are offsetting benefits to the job-generating engine that Nevada has become. As I said, over 90 percent of the small businesses are eligible for an actual tax reduction. Bigger businesses will be able to get incentives to invest in new plant and equipment. There are all kinds of other things that really help the business community. That's why the Home Builders, the Realtor Association, the American Electronics Association, any number of business groups have endorsed this program, because it will create jobs. And keeping interest rates down while there's so much building going on in Nevada is very important because you have to borrow money to finance construction. So that also will have a big boon to the Nevada economy. You will get a lot more out of it than the 4.3 cent gas tax will cost.

Spending Cuts

Q. Mr. President, we've been taking phone calls from our viewers for the past 24 hours, and the overwhelming percentage have been asking, why not cut spending more first before raising these taxes?

The President. First of all, we do cut spending at the same time. There are $255 billion in spending cuts over a 5-year period and about $241 billion in taxes over a 5-year period. They are going into a trust fund so the money can't be spent on anything else. And if we miss the reduction targets, every year I will be bound by the system we're now following to come in and correct this. Secondly, there will be more spending cuts. We are going to have a report in September from the Vice President's Commission on Reinventing Government, which will recommend some substantial increases in spending cuts. And finally, as we deal with health care, we'll be able to deal with the exploding costs of entitlement spending on health care to our Federal budget. But the only fair way to do that is to provide health security and to reform the health care system. So I assure you, there will be more spending cuts coming up.