Remarks on the Asia-Pacific Economic Cooperation Summit and an Exchange With Reporters

The President. Good afternoon. Before I leave on my trip for New Zealand, I wanted to say a few words about the trip and a couple of other issues. These APEC summits started in 1993 when I first invited the leaders of the Asia-Pacific region to meet in Seattle, Washington. They bring together the leaders of more than half the world's people and half of its economic activity.

What we do there will help to decide whether the global economy continues to move in the direction of greater openness and integration, equity, and growth in the next century. This year one of my most important goals is to get a commitment on the part of all our Asian-Pacific partners to rapid, wide-ranging market opening so that we can launch a new trade round at the WTO meeting in Seattle in December. We must stand together against protectionism and for a common future of prosperity.

During the global financial crisis over the last 2 years, the fact that the United States kept its markets open bolstered Asia and the world. It helped to keep the crisis from becoming even worse, and it certainly helped to turn it around. All of this was good for American workers, as you can see by the continued low unemployment rate in our country.

I will meet with Prime Minister Obuchi and President Kim in Auckland to have the opportunity to discuss not only economic issues but also the difficult issues surrounding our relationships with North Korea. I will also meet with President Jiang and with the new Russian Prime Minister, Mr. Putin. We will be meeting following a difficult period in Asia.

There are encouraging signs of recovery from South Korea to Thailand to Japan. There are also continuing difficulties, as all of you know, caused by everything from economic distress to neglect of human rights. Nowhere are those difficulties more pressing than in Indonesia. It is the fourth-largest country in the world and the largest Islamic country. It has been undergoing an important democratic transformation. It has the capacity to lift an entire region if it succeeds, and to swamp its neighbors in a sea of disorder if it fails.

East Timor

Precisely because Indonesia's future is important, I am so deeply concerned by the failure of its military to bring a stop to gross abuses now going on in East Timor. After 24 years, the people of East Timor voted overwhelmingly for independence. Now, there are forces who want to reverse the popular will. At stake are the lives and way of life of innocent people. At issue is whether the democratically expressed will of the people can be overturned by violence and intimidation.

Also at stake is Indonesia's own transition to civilian democratic rule. For these reasons, we will continue with our allies in Asia and elsewhere to make it clear that we expect the authorities to live up to their word and to their responsibilities.

The Indonesian Government and military are responsible for the safety of the East Timorese and of the U.N. mission there. If Indonesia does not end the violence, it must invite—it must invite—the international community to assist in restoring security. It must allow international relief agencies to help people on the ground. It must move forward with the transition to independence. Having allowed the vote and gotten such a clear, unambiguous answer, we cannot have a reversal of course here.

The overwhelming weight of international opinion, from Asia to Africa to Europe to North America, strongly agrees with this position. Right now, the international financial institutions are not moving forward with substantial new lending to Indonesia. My own willingness to support future assistance will depend very strongly on the way Indonesia handles this situation.

Today I have also ordered the suspension of all programs of military cooperation with Indonesia effective immediately. Our military leaders have made crystal clear to senior military officials in Indonesia what they must do to restore our confidence. In the past few days, I have made many phone calls with our partners in the region and around the world and with Secretary-General Annan. I applaud the efforts, especially, of Australia to mobilize a multinational force to help provide security in East Timor. I thank all countries that have already agreed to participate.

The United States is prepared to provide support to this Australian-led effort. Although we've made no final decisions, we are consulting with Congress now on the best way to support this mission if it goes forward.

The will of the people of East Timor must not be thwarted. They have a right to live in peace and security, and they have earned and voted for their freedom. This issue obviously will be an important part of our discussions in New Zealand, and I look forward to having the opportunity to meet with all of the leaders on this and the other matters we will discuss. Thank you.

Tax Cuts

Q. Mr. President, Republicans in Congress are saying that if you veto their tax cut package, they're not likely to send you another one. Are tax cuts dead for this year, or will you offer them a little bit more, perhaps, than the $300 billion you said you might be willing to accept?

The President. My bill is $250 billion, and it provides almost exactly as much aid to middle class Americans as theirs does. Whether there is a bill, of course, is up to them; they can control what bills come up. But if they're saying, "Well, it's our way or no way," then that is evidence that this has been pretty much about politics all along.

I'm all about progress; I want to get something done. I'd like to see us secure and modernize Medicare. I am willing to work with them on the Social Security issue. I think we ought to run the life of the Social Security Trust Fund out beyond the life expectancy of the baby boom generation, and I am willing to provide for a modest tax cut that will not undermine our ability to pay down the debt and make this country debt-free over the next 15 years. So I'm willing to work with them.

There is always some flexibility in this budget. We can have an agreement, but it is up to them. They know good and well I'm not going to sign this bill. It's wrong for America; it's bad for the economy; it will lead to an increase in interest rates and a cut in education spending and a lot of other things that won't be good; and it won't add a day to Social Security or Medicare, and it will undermine our ability to pay down the debt. So they know that. The question is whether we're going to meet and work together. My door is open, and I hope we will.

Go ahead, Ann [Ann Compton, ABC News]. Did you have a question?

Clemency for Members of the FALN

Q. I did, about the FALN. Do you think now that the clemency has been accepted, but these—the prisoners say they are political prisoners; they challenge the restrictions on them. And your disagreement with the First Lady, can you describe to us how you discussed it with her on the issue of clemency?

The President. Well, first of all, let me discuss this issue on the merits so you'll know what happened. It came in what I would call the ordinary course of business from the Counsel's Office, and I received a very detailed statement of the facts and the claims. I was requested by hundreds of people, including President Carter, Bishop Tutu, and many other religious leaders and Members of Congress, to look at this and act favorably on it. And then, obviously, there were those who disagreed.

My judgment was that these people should be offered a conditional clemency for two reasons: One, none of them, even though they belong to an organization which has espoused violent means, none of them were convicted of doing any bodily harm to anyone; and two, they had all served sentences that were considerably longer than they would serve under the sentencing guidelines which control Federal sentencing now. Most of them had been in for somewhere around 19 years; they had served very long sentences for offenses that did not involve bodily harm to other people.

Because I did not believe they should be held in incarceration, in effect, by guilt by association, I agreed to offer them clemency if they would abide by the conditions of parole and specifically renounce violence.

What that means is, if they get out and they violate the conditions of parole, and particularly if they are engaged in any way with people who are espousing violence, that their parole will be revoked and they'll have to go back to prison. So under those circumstances, I felt then and I still feel that that was the just decision.

She didn't know anything about it, as far as I know, until someone from her office called and asked her for a comment, because I did not discuss it with her. I haven't discussed other clemency issues with her, and I didn't think I should discuss this one. So it was up to her and entirely appropriate for her to say whatever she wanted to about it. But I did what I thought was right, and that's what I'll continue to do.

Gene [Gene Gibbons, Reuters].

Q. As a very skilled politician, using that perspective, if your wife decides on a run for office, does she figure to be hurt by what many people perceive as a flip-flop on the issue of clemency for the Puerto Rican nationalists?

The President. Well, you know, they'll have to evaluate that as they please. You know what she said in her statement; I don't know that that's a flip-flop. I had a different position. I thought they should be given another week. If, in the course of this week, if we had come to tomorrow and they hadn't taken it and I had revoked the offer, would that have been a flip-flop by me? I don't think so.

The reason I felt they should be given to this week is, I knew that their lawyer was actually physically going around to see all of them and would not finish until, I think, yesterday. So I thought they ought to be given that amount of time, and it's a judgment I made.

East Timor

Q. Mr. President, what level of military support are you prepared to provide to any peacekeeping mission, and what recourse do you have if Indonesia continues to refuse an international mission for East Timor?

The President. The answer to the first question is, we're still—we're consulting with the Australians and with others, and we're also talking to interested Members of Congress about this, and no decision has been made. I want the American people to know two things: Number one, the Australians have made it clear that they, being the nearest military authority, intend to play the largest role and provide the lion's share of the effort, and that many other countries have already agreed to contribute.

But, secondly, the United States has been, certainly since the Second World War, and indeed, going back before, heavily involved in the Asia-Pacific region. The Australians and many of these other countries have been our allies in every difficulty that we have faced, and I believe that we should support them in an appropriate way. But that is something that would still have to be worked out.

Now, the second question you asked is the most difficult one. There are any number of countries that are willing to support this endeavor; there are any number of countries on the Security Council who are willing to support it if Indonesia will ask. The problem is, we're in this interim period where the East Timorese have voted for independence, but East Timor is still a part of Indonesia, and we're going through this transition period.

The frustrating thing to me—and I don't know how many phone calls I've made the last 3 or 4 days about this, but the thing that's frustrating people all over the world is, they either can't or won't stop the violence, which is leading people to leave. But they don't want to admit they can't, so they don't want to ask anybody else to come in. That is why I have made the statements I've made today about economic aid and the military cooperation.

I tried to do this with telephone calls, working with others. I have seen the frustration and the anxiety in the voice of the Portuguese Prime Minister and any other number of leaders who are passionately concerned about this area, and obviously Prime Minister Howard in Australia, Prime Minister Shipley in New Zealand, and others. We are doing our best. Kofi Annan is doing his best. He sent a U.N. delegation there. They arrived there yesterday. So this may be a question that you'll have to ask me again tomorrow and the next day and the next day, because I don't have a clear answer for you yet.

Q. What are they telling you? What are the Indonesians telling you, and have you thought of economic sanctions?

Q. [Inaudible]—force change in Indonesia right now would suspend temporarily IMF and World Bank, who are set to go there. Do you think that's the right approach?

The President. First of all, I think today the right thing to do is to make it clear what our intentions are. And our intentions are: one, to stop military and military cooperation right now until this matter gets resolved; and two, we have sent a clear signal about what we will do on economic cooperation if it is not resolved.

It would be a pity if the Indonesian recovery were crashed by this, but one way or the other, it will be crashed by this if they don't fix it, because there will be overwhelming public sentiment to stop the international economic cooperation, but quite to the side of that, nobody is going to want to continue to invest there if they are allowing this sort of travesty to go on.

So I think one way or the other, the economic consequences to them are going to be very dire, but I think—my statement clearly signals where I'm prepared to go on the economic issue.

Yes.

Q. If you got asked this, I didn't hear the question and I apologize. But what about in terms of support troops for any international mission or infantry-level troops? Would it be mostly just support the United States is considering at this point?

The President. There are any number of ways that we can support this mission and participate in it. But I normally make a practice, and you will know now after several years of our doing this from, I guess we started with Haiti and then Bosnia, I like to consult with the leaders of Congress. They've been gone; they're coming back.

What I want the American people to know is that the Australians are clearly prepared to lead this. Prime Minister Howard's been very strong, very unambiguous, and very impressive, I think, in his determination to try to help. Several other countries have said they will go along if the Indonesians ask and the United Nations approves. And I think the United States should support this mission.

Whatever we do, the lion's share of the people involved will be from the region. But a lot of those people, starting with the Australians, have been with us every step of the way for decades now, and I think we have to be involved with them in whatever way we can; and our military people will have to work that out, and we'll have to work that out—some consultation with Congress as well.

Yes, in the back.

Medicare

Q. Yesterday the Senate was nearing to have some form of prescription drug coverage. Would you be willing to compromise with the Republicans on this issue to include a means testing on Medicaid coverage in order to jump start negotiations?

The President. In order to jump start what? I think the question is, would I be willing to work with the Republicans and take a smaller drug benefit in order to get one started? Is that what you said? Is that—what did you say? I don't want to misstate you.

Q. If you would accept means testing.

The President. Well, what I don't want to do is to accept something that's so meager it doesn't mean anything. The real problem with the medical benefits, the prescription drug benefits available to seniors today in so many of these programs is that they are so expensive, they're unaffordable, or they're so meager, they don't mean anything.

Any proposal the President sends to Congress has got to be, by definition, subject to negotiation and modification. I mean, that's just any proposal, and you know that. There are things we could do apart from the prescription drugs proposal to come closer together on Medicare. They have acknowledged, as Senator Lott said, which, as I said at the time, for him was probably high praise, when I proposed my Medicare program and I called him about it, he said, "Well, it's not as bad as I thought it would be," which is another way of saying that I adopted a lot of the competitive mechanisms and structural reforms in Medicare that were embraced by the Medicare Commission.

I'm willing to work with them, but I don't want to undermine the universal character of the program, the clear benefits of the program. I don't want to force people into managed care by some pricing gimmick, and I don't want the drug benefit to be so small as to be meaningless or so expensive as to be unaffordable. And I think that—I frankly think the areas we have for compromise and where I think they want to go may be more in other areas. But I am willing—I just want to sit down and talk to them about it.

Now, we are going to have a chance to do that because Senator Roth has committed to mark up a Medicare bill. And so what I would urge you to do is to watch the progress of the Medicare bill in the Senate, in the Finance Committee, and see what we have to say about it. And you'll see whether we're working together or at cross purposes.

East Timor

Q. You've left a big blank on what kind of response you're getting from the Indonesian Government. You keep saying what we're willing to do and what the Australians—what are they——

The President. The reason I left a big blank there is that, so far, both the political and military authorities have been unwilling—they have been very clear; they do not want to ask for international assistance.

Now, that is subject to one of two or three interpretations. Interpretation number one is, they believe they can stop this madness in East Timor and they want to do it, and they don't want to have to admit that they have to have help to do it. Two is, nobody's got the authority to make a decision because it's chaotic there; they've already had a Presidential election and parliamentary elections, but they haven't, because of the complex system for picking a new leader, they haven't done that. Three is that at least some elements in the country support what is happening in East Timor for whatever reasons.

In other words, they didn't like the results of the referendum, and they're trying to undo it by running people out of the country or into the grave. There may be other explanations. But, no, we've gotten very clear answers, which is at this time they are not prepared to ask for international help, and we have continued to press them in our military-to-military contacts, which have been quite extensive over the last several years. General Shelton, in particular, has worked very, very hard to push the Indonesians to send people in there that can stop this killing and stop these people from being run out of their country.

We want to get the humanitarian agencies in there as well. So that's what we're doing. But we've gotten a clear answer. The answer to date has been no, and that's what we're frustrated about, because if the answer were no and they were fixing the problem, that would be the best of all worlds.

Japanese Economy

Q. Mr. President, are you confident that Japan is on the path to economic recovery? Today they reported a second straight quarter of economic growth.

The President. They're doing better, and I'm real pleased about it. I think the world should be pleased about it. I know some in America are worried. They're afraid that a resurgent Japan means more competition for money and more pressure on the dollar. But on the whole, a Japan that could buy more American products and buy more products in Asia from other Asian countries would be very much good for the global economy and therefore good for America's working people.

So you're asking me, do I know for sure that their recovery is underway? I think they're doing better, and I think Mr. Obuchi has shown real ability, real talent in getting people together.

We—as you know, our Treasury officials have continued to recommend things in conversations with the Japanese that we think will help to speed up the recovery, but we're working with them well, and I'm pleased that they seem to be turning around. It's a good thing for the word.

China-U.S. Relations

Q. Are our relations with China on the mend now? And what are the prospects for signing a WTO deal with President Jiang?

The President. Well, we've done our best to do what I think is the honorable and decent thing in the wake of the terrible accident involving the Embassy in Belgrade. And we have made it clear in the recent tensions between Taiwan and China that we still strongly support the "one China" policy and the so-called Three Noes. But we also believe that any differences between them should be resolved in a peaceful manner, and we feel very strongly about it.

I hope that those things and the passage of time will permit us to resume constructive conversations with the Chinese, beginning with my meeting with President Jiang, and I would very much like to resume the WTO negotiations. I think it would be good for China, good for the United States, and good for the world economic system. So I hope we'll be able to resume our talks, and if we resume them, obviously, I hope we'll be able to bring them to a successful conclusion.

Religious Persecution in China

Q. Sir, have you seen the new State Department report on religious persecution out today, and do you plan on talking about China's actions when you meet——

The President. On what?

Q. ——the State Department report on religious persecution. Have you seen that today, and do you plan on talking about China's actions, the allegations, when you see President Jiang on the weekend?

The President. I have not seen it, but I will see it, and if I think it's appropriate, I'll certainly bring it up. I brought it up before, and as you remember, I actually sent a delegation of religious leaders to China to tour around the country and to talk to religious leaders in China and also talk to high representatives of the Chinese Government about that. That's a big issue for the United States. We have legislation on it, and it's a very large issue for me, personally.

I've been working on that issue ever since I got here and in many countries, so I look forward to having a chance to review the contents of the report and to taking appropriate action. Thank you.

Attorney General and FBI Director

Q. There's a lot of pressure on Reno to resign. Do you think Freeh should resign?

The President. I think Janet—first of all, in terms of the merits of this and the FBI, I don't have anything to add to what I said last week. I think that she did the right thing in asking an outside person to review it. I think that Mr. Freeh did the right thing in supporting that. I've known Senator Danforth for—well, I met him when President Carter was in office, sometime during that period, so somewhere around 20 years. And I have always thought him an honorable man and an intelligent and straightforward man.

The only thing that I would ask is that he conduct a thorough and honest inquiry and do it as promptly as he can so that we can get the facts, take appropriate action, and go forward. But based on what I know of him and what I have observed, I think that's a good move by the Attorney General, and I certainly don't think there's any reason for her to resign.

Thank you.

Clemency for Members of the FALN

Q. Mr. President, can you say that New York senatorial politics played no role in the Puerto Rican decision?

The President. Absolutely. Absolutely. I got the memo from Mr. Ruff. I didn't know it was coming; it came with all the other papers I get every day and every week, and I dealt with it the way I deal with everything.

Q. The First Lady says you didn't tell her about your deadline when she——

The President. That's also true.