Remarks Prior to a Meeting With Congressional Leaders and an Exchange With Reporters

The President. First of all, I want to welcome the congressional leadership here. I am glad to be back home. Last week was a truly historic week not only for NATO and Europe but for the United States. And the meeting we had in Madrid, I'm convinced, 50 years from now will be looked back on as a very wise decision to admit new members and take on new missions and establish new partnerships for NATO.

I want to say a special word of thanks to all who were responsible for the bipartisan delegation from both the Senate and House that went to the NATO meeting. And in particular, I'd like to thank Senator Roth, who is here, who was the chair of the delegation and who actually spoke to the North Atlantic Council and did a terrific job. So it was a very, very good thing.

Now that we're back here, I think that clearly the first order of business is to go on with the work of balancing the budget in a way that is consistent with the agreement we made and consistent with our strategy, since 1993,¹ of cut ting what can be cut, investing in our people, and trying to grow this economy.

There are some I have heard since I've been gone who have argued that since the deficit has dropped dramatically, it will somehow disappear just if we leave the '93 plan in place and don't do anything else. I have to say that I emphatically disagree with that. It is true that the deficit has dropped more than we predicted it would in '93, and we're proud of that. But I think it is plainly wrong that, number one— Frank Raines told me just this morning that if we did nothing, it wouldn't—the budget would not balance.

Number two, let me be quite specific about the kind of agreement that we have reached here. This agreement has $900 billion in spending reduction over 10 years. It has entitlement reforms that have to be made, and even after that, there will be more to be done to try to save Medicare and the other entitlements over the long run. It pays for the biggest increase in education and children's health in over 30 years, which would not occur, I'm convinced, in the ordinary appropriations process. It pays for tax cuts, and we still have some disagreement about that, but I think we'll reach agreement on tax cuts that fund the education portion of the budget agreement. And I believe it should also give the children's tax credit to hardpressed working families.

I think that we should be careful not to let the deficit explode. I think that we should— I hope that I can persuade the Congress to embrace the specific provisions relating to redevelopment of our urban areas and our poorest rural areas, because I think we have to change from the social service model for the poor inner cities to an economic development, growth, and private business model. So I hope we can do that. But the idea that we don't have to do anything, I think, is dead wrong.

The last thing I'd like to say is confidence in this economy keeps it growing and keeps people investing in it, and if we pass another budget agreement and it has credibility, we'll have more confidence, more investment, and we'll keep it going.

So I'm looking forward to this opportunity to work with the Members of Congress. And perhaps they would like to say a word or two, and then we'll answer a question or two.

Mr. Speaker, would you like to go first?

[At this point, House Speaker Newt Gingrich made brief remarks.]

The President. Senator?

[Senate Majority Leader Trent Lott made brief remarks.]

Q. Mr. President, why do you think—

The President. Just a minute.

Mr. Daschle?

[Senate Minority Leader Thomas A. Daschle made brief remarks.]

The President. Mr. Gephardt?

[House Minority Leader Richard A. Gephardt made brief remarks.]

Budget Agreement

Q. Mr. President, what do you think of the Republicans saying that your tax cuts fall short of the budget agreement, $20 billion or so?

The President. Well, as I understand, it has something to do with the calculation of whether someone who's getting the earned-income tax credit, if they got the child credit, would be getting a spending or a tax cut. But we'll work through all that.

I don't want to get into a big negotiation here; I can just say this. I think we ought to give a tax cut to the people making $22,000, $24,000, $25,000 a year who have children. They're still paying taxes quite—all these people—a majority of American taxpayers pay more in payroll taxes than they do in income taxes anyway these days. And I think we've just got to work together in good faith and try to find a way to work through it. I think we will.

Q. Mr. President, do you hope to leave the room today having convinced the Speaker and Leader Gephardt to embrace the Medicare changes that are in the Senate proposal, the age increase and the means testing?

The President. Well, as you know, on principle I support means testing. The House has spoken overwhelmingly on the age increase. The problem I have with the age increase is that one of the biggest difficulties we have today with Americans without health insurance are people who retire early at 55 and lose their employerbased health insurance and then, because they've had—they've been somewhat ill or had problems, can't get other health insurance until they qualify for Medicare. So if we're going to raise the age limit, we need to have some idea of how those people would be insured. And I don't know that we do now. That's been my problem with that.

But I would hope we can agree to some sort of a premium that's enforceable and that's fair and that doesn't drive people out of the Medicare system.

Q. Mr. President, will you explicitly tell the leadership here what might make you veto a tax cut bill, and do you want to tell us? [Laughter]

The President. Probably not. [Laughter] Look, I think—wait a minute—let me just say, we have lots of negotiating sessions. I have been very ably represented. I don't think I've ever had any better representation in any negotiations than our team has provided this time. And we're going to work through this.

But it does not serve the American people well if we explicitly and publicly turn this into the gunfight at the O.K. Corral. Now what we're trying to do is to find a way to work through our differences so we get a bill that they can all vote for and I can sign and we can celebrate for the country. And that's what we're trying to do. We all have our bottom lines. They have their bottom lines; I have mine. And we're going to see if we can't reconcile them all and go forward. We're doing the best we can.

Bosnia

Q. Mr. President, are you worried about a possible Bosnian Serb backlash to the arrests of accused war criminals there, sir?

The President. Well, I'm concerned about it, of course I am. But the representatives of the Serbs signed the Dayton agreement as well. They signed the Dayton agreement, and the Dayton agreement says that if someone is charged with a war crime, they should be turned over and subject to trial. Now, they plainly— it also says that if the SFOR troops come in regular contact with those people that they can be arrested.

Now, they have clearly not complied with that provision of the Dayton agreement in terms they've made no effort to help us get any of these people. And so—but they have no call to take any retaliatory action, and it would be a grave mistake to do so.