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

Weekly Compilation of Presidential Documents, August 9, 1993

And finally, we saw the end of Reaganomics in the last 3 or 4 years, where we had 4 years with only a million new jobs coming into the economy. And the record came in on the eighties, where 60 percent of the economic growth went to the top one percent of the people. And we didn't grow very many jobs compared to previous decades.

So my answer is that President Reagan's program, which was to cut taxes and increase spending and have a huge deficit and try to borrow and spend our way out of our economic problems worked pretty well in 1983 and 1984, but after that, it began to have serious problems. And for 6 or 7 years, it's now apparent that we can no longer borrow and spend our way to prosperity. We have to have some more discipline in our national life.

Taxes

Q. Good afternoon, Mr. President. You've said that your plan will create 8 million jobs, but half of the proposed deficit reduction package comes in the way of new taxes. How do you plan to reconcile those two, when history has proven that increased taxes does not create new jobs?

The President. I don't know that history has proven that. Under President Bush's administration, where he railed against taxes and finally signed a program in 1990 which was basically a middle class tax increase that had 2 1/2 times the burden on the middle class that this program does, we didn't have new jobs. There were times in American history when we had much higher tax rates than we will have under this program, much, much higher, where we were creating any number of jobs.

I think what has killed this economy is that so much of our money is going to deficit financing that that has kept interest rates high. People have not been able to afford money to borrow and to invest, and we have seen ourselves losing control of our financial future. So I don't think all taxes are by definition bad for the economy. Do I think you can overtax the economy? Sure I do. But we still are going to have, on the whole, lower taxes than our major competitors and much lower taxes than we've had at times past when we created more jobs. I think we will lose more if we do nothing now and let this deficit get out of hand and run the interest rates back up. I think that will be much worse. If I didn't, I wouldn't recommend this.

Let me just make one point here by way of just kind of trying to establish my credibility on this issue. Before I became President, I was Governor of a State for 12 years where we never had to raise taxes to balance the books, where I routinely cut spending--I ran a tight balanced budget--and where, in every year I was Governor, our State was in the bottom five in the country in the percentage of our people's income taken up by State and local taxes. The only time we ever raised any new taxes was when we had heavy majority support for dedicated support for either schools or roads. That's it.

Now, what we're facing now in this country is a situation not of my own making. I wasn't in Washington the last 12 years, in either party, voting to run the debt from $1 trillion to $4 trillion. But I have to face the fact that that's where it is. And we're either going to do something to regain control of our own destiny, or we're going to let the economy continue to spin out of control and we'll be helpless to influence it. So it's just a question of whether we're going to do this for the long run or not.