Remarks on the Federal Budget Agreement and an Exchange With Reporters in Honolulu, Hawaii

The President. Let me start with a statement, and then be glad to take some questions. But I've just been informed that the United States Senate has just passed the House-Senate conference report on the budget. This completes congressional action on an agreement to reduce the Federal deficit by over $490 billion over the next 5 years.

This budget blueprint represents corrective action on a pattern of Federal spending gone out of control. We have put on the brakes, and the process has sometimes been painful. But I will sign this legislation because, for the first time, it makes significant and long-term cuts in Federal spending that should have a positive impact on America's economic future. All political points of view have sacrificed to bring this agreement about. And, needless to say, I don't like raising taxes and never will, but there is a price to divided government, and that means that I have had to compromise on items that I feel strongly about in order to do what I think is best for the country, and that is to reach an agreement.

At the same time, we've cut Federal spending programs and applied some self-discipline, steps that also may not be popular. But the essential ingredient which has produced bipartisan agreement is that we must get the deficit down, get interest rates down, and keep America moving. And I might add, I'm told that the final enforcement provisions are very, very strong, so that we're guarding against more spending -- out-of-control spending next year and into the future, covered by this agreement.

In addition, I am pleased that many of my proposals on child care are incorporated in this budget reconciliation bill. The legislation provides tax credits, grants, and vouchers that put choice in the hands of parents rather than in the hands of bureaucrats. So, I'm very pleased about the childcare provision, something I've been fighting for.

I intend to sign the agreement. And I will also review closely the various appropriations bills to make sure that they conform to this new spending agreement. We've made the tough decisions, and now it's time to move on.

And I am pleased that the Congress also has passed historic Clean Air Act amendments which will reduce acid rain, urban smog, and toxic air pollutions. We proposed this far-reaching environmental cleanup legislation some 15 months ago with the hope that this initiative by the administration would break the logjam that had prevented a clean air bill from being passed previously. This is an important milestone in preserving and protecting America's natural resources, and I look forward to signing the bill.

I want to conclude by thanking everyone involved, including the bipartisan leadership in Congress for their tireless efforts in forging and passing the new budget agreement. The Speaker [Thomas S. Foley], Minority Leader Bob Michel, the Majority Leader Dick Gephardt, Senator Mitchell, and Senator Dole have all had to compromise some. And they've stayed with it long, long hours, trying to hammer out this agreement, so I want to take this opportunity to thank them.

I'll be glad to take a few questions, and then we've got to head on.

Budget Agreement

Q. Mr. President, you signed on to this budget agreement and your negotiators negotiated it with Congress, including the tax increases that you vowed you wouldn't do when you ran for office. Are you prepared now to give it a sound endorsement and urge Republican candidates to go out and sell it to the voters as well -- --

The President. No -- --

Q. -- -- or are you going to turn your back on it and blame the Democrats for the tax increases that you agreed with?

The President. I'm going to say, look, I've reluctantly signed this. There are things in it that, if I controlled both Houses of Congress, wouldn't be in it; and I think the Democrats will be saying the same thing. I noticed some of them saying yesterday that they felt we ought to have higher income tax rates. One of the things I'm glad about is that we've held the line on income tax rates.

A handful of the wealthiest went up, and 10 times that many of the upper middle income came down. Some went from 28 to 31; others came down from 33 to 31. There are certain things in it that I can strongly advocate. There are some things in it that I had to gag and digest. And so, that's the approach I'm going to be taking, and expect everyone else will, too.

Q. Mr. President, you said it's time to move on. Do you have any fear or do you think -- expectation that the whole fiasco over the last couple of weeks is going to haunt you in the election?

The President. No, I don't think so at all. Sometimes the President has to make a tough call; this is one of them. I'll be right out on the campaign trail advocating the election of more Republicans to the Congress. And we wouldn't have been in this mess if we had that.

Q. Mr. President, how can you go out now and blame Democrats, criticize Democrats, when in fact they, more than Republicans, helped you get this budget package -- which you supported -- passed?

The President. Hey, listen, that shows that I don't like everything in the package. I mean, if I were all that enthusiastic about it you'd have seen more Republicans voting for it. So, nobody got it exactly the way he or she wanted, but now it's behind us. As soon as I sign it, that's behind us. And I hope it will have the effect of bringing interest rates down. But the philosophy of holding the line on spending and holding the line on taxes is my philosophy. And I will be clearly advocating that.

Taxes

Q. What message will you use now, then, to replace your "no new taxes" pledge? Everybody is very accustomed to that, all the Republicans. And I just want to know what slogan or -- --

The President. Let me be clear: I'm not in favor of new taxes. I'll repeat that over and over and over again. And this one compromise where we begrudgingly had to accept revenue increases is the exception that proves the rule. That's the way I'll handle it.

Q. The exception that proves what rule?

The President. The rule that I'm strongly opposed to raising taxes on the American people and that we ought to do a better job of controlling spending. And I think we can. So, that's the message, loud and clear.

Q. Will you reinstate today your "no new taxes" pledge, perhaps "no new new taxes"? Do you think -- remember after '86 that the Congress passed a resolution saying they wouldn't tamper with it for 5 years. Do you think now the line should be drawn again and, having made this compromise, you should now hold the line on taxes again?

The President. Absolutely going to hold the line on taxes. And hopefully -- the big thing is to hold the line on spending so nobody will come up and try to propose new taxes. But I noticed one of the Democratic leaders said yesterday, well, he wants to raise income tax rates. And he's going to have a whale of a fight on it. This was a one-time compromise.

Budget Agreement

Q. You really don't seem very enthusiastic about this budget deal. You don't seem euphoric after all you and the others have been through -- --

The President. That's right. You got it.

Q. -- -- and I might note that it doesn't appear to meet your own objectives. You've been insisting on a $500-billion deficit reduction target -- now only $490 billion. Plus I understand the deal is based on rosy economic assumptions over which there is much disagreement. How do you feel?

The President. I feel that it's been a long, arduous battle. And I feel that every once in a while the President has to do something he doesn't like, and that is to compromise. And I did that here. So, I'm glad it's over, and I have to say that the hours that the Democratic leaders and the Republican leaders spent working this problem has just been exhausting for everybody, including me, although they did much more of the work. So, I'm glad it's behind us, and I feel good that it's behind us, but I can't be euphoric about every provision in this bill.

I am very encouraged about the enforcement provisions because they are strong. And no guy can go out and put in a new program without the offset. The guarantees of enforcement are strong, and I'm going to do my level best to see that they stay strong.

So, you're trying to describe mood. I am pleased it's behind us, and I will be out vigorously campaigning on the campaign trail for more Republicans who feel as I do about holding the line on taxes and about spending. And we have a difference of opinion. You have more people that wanted to increase, on the Democratic side, these permissive spending programs. So, the philosophy, the fundamental philosophical underpinning -- yes, I haven't changed my view on that, and I'm sure the liberal Democrats haven't either. But we'll take that case to the American people.

Q. Can you really show the American people with all your heart that this is a good deal?

The President. Parts of it are good. No, I can't say this is the best thing that's happened to us since sliced bread or the elimination of broccoli. It has got some good things in it, but if we were doing it my way, or the Republican leader in the Senate's way, or the Republican leader in the House's way, it would be very, very different.

But I think it is good that we have a $490 billion -- I'd like to have seen $500 billion, but this is a lot of money -- $490 billion, enforceable deficit reduction program. And that part, that overall part, I am enthusiastic about. But how we got it -- I reserve the right to be as critical as the next person on that.

Republican Campaign Strategy

Q. Mr. President, do you think it was proper for the Republican Congressional Campaign Committee to recommend that the party's candidates distance themselves from the President on this?

The President. No, I want everybody to be right with me on everything I do.

Q. Is the architect of that strategy, Ed Rollins [cochairman of the committee], history as far as you're concerned?

The President. That is inside the beltway -- I know how people love that. They thrive on it. I don't. And you know, ever since I got out around the country, not one person has sidled up to me and asked me about that particular incident. And I'm going to keep my sights set on the big picture and not accommodate you when you want me to go back into that. I understand it; I understand it because people thrive -- what was that, Lori [Lori Santos, United Press International]?

Q. Does he know?

Q. Is he out?

Q. Is he out?

The President. I'm not discussing it because it would divert me from the major goal, which is to elect more Republicans to agree, as I do -- hold the line on taxes and spending, get people back to work in this country by getting interest rates down, and empowering people, not programs and bureaucrats. So, I get diverted if you try to get me into some little staff matter.

Representative Gingrich

Q. Conspicuously missing from that list of leaders that you recited, Mr. President, was the name of Newt Gingrich. Some people have suggested that you could have gotten a better deal if he had not led the Republican revolt a couple of weeks ago. Do you think that he should remain in his leadership position because of his actions?

The President. Remember -- what was the give-and-take in the debate when Ronald Reagan said, there you go again trying to get me caught up in something divisive. Newt Gingrich stood out there in the White House -- I'm not sure you were there that day -- and strongly endorsed Republican unity, and that's exactly what should happen. So, please don't ask me to relive the agony of a budget agreement that I am glad is signed and is now behind us.

Mr. Fitzwater. One final question.

Budget Agreement

Q. Do you feel that the Republican Party has been badly hurt by this -- --

The President. No.

Q. -- -- and aren't you sorry that you couldn't have gotten more Republican votes?

The President. Not particularly sorry that not gotten votes because a lot of the Members feel as I do: They were gagging on certain provisions, but glad that it's passed. And I think if this compromise had been perfect from the Republican side, you'd have seen -- obviously have many, many more votes. So, I think those that didn't vote against it, on both sides, had problems with it. Some on the Democratic side were saying, we want to raise income tax rates on the American people more. That's literally what they wanted to do. They called it soak the rich, but what they meant was -- when that bill that they passed in the Congress, with that indexing -- went after every working man and woman in this country. And that's the old tax-and-spend view, and some of them didn't feel it went far enough. Some on our side didn't like anything to do with revenues; that's more along my line of thinking.

So, I think that's history now, but I have no rancor about it. I'm just glad it's passed. I wish it had been passed when we had the summit agreement, and we'd have been much further along.

But I don't -- back to the first part of your question -- no, I sense strong enthusiasm for Republican candidates. And I think we've been caught up in a bit of an inside smokescreen here. But let's see now how we do. I'm going to be out there, working my heart out for Republican candidates who feel as I do that we ought to hold the line on taxes and that we ought to curtail spending.

The Economy

Q. Are we headed for another recession?

The President. The economy is sluggish, and there's no question about that. And I am convinced, whether I like every paragraph of this or not, that this is good medicine for the economy, particularly if the Federal Reserve Board now follows up with lowering interest rates. You know, that is what's needed, and I'm not here to do anything other than to state that principle. But I listened carefully to [Federal Reserve Board Chairman] Alan Greenspan's testimony, and I was encouraged that interest rates might come down. Better than any program is getting these rates down so economic growth gets stimulated.

Appropriation Bills

Q. You said that you're going to review the appropriations. Has that process begun? And are you certain that the appropriations bills that have been passed are not raising spending levels at the same time that you're claiming to have cut some for deficit reduction?

The President. No, I'm not sure of that, Jessica [Jessica Lee, USA Today]. The process is underway, of course, but I'm not certain that there's no breaches of the spending goals.

Q. Sir, if I could just switch to the -- --

The President. A couple of more, and then I've got to go. We've got a very interesting meeting with the Pacific chiefs of state. It's a fascinating and long-overdue meeting. And I'm learning from them, and I am giving them the best I can, right from the shoulder, the American view of the importance of the Pacific. I know that, given the budget summit at home and the interest that that has stimulated, that attention hasn't been focused elsewhere. But this is a very important meeting, and I'd say historic, with these small countries -- but all friendly to the United States and all very important to the United States.

I've got to get back down there in just a minute. Did I cut you off?

Q. No, sir.

The President. You've got a followup.

Persian Gulf Crisis

Q. Just to switch to the Gulf crisis for a moment. Secretary Cheney indicates we may send as many as 100,000 new troops in and a lot more tanks. What's the purpose, sir, if it's not to take offensive action and get engaged in combat with Iraq?

The President. Just a minute. Power outage here.

We have not announced what we are going to do in terms of additional troops. We have been still, as everybody around the world knows, still moving forces. The purpose is to make clear to Saddam Hussein [President of Iraq] that his aggression will not stand. What I do in the future will be determined after I have a discussion with Dick Cheney and the Chairman of the Joint Chiefs [Colin L. Powell], General Scowcroft [Brent Scowcroft, Assistant to the President for National Security Affairs], and Secretary Baker, which I expect we'll be doing -- looking for help with Brent -- when we get back. Maybe we'll have more to say about that then.

But I believe a couple of things on this. One, I think Saddam Hussein really felt that nobody was going to move against his aggression in Kuwait. I also believe that he really intended to threaten Saudi Arabia -- or else why did he move all his armor south to the Saudi border? I think as he sees the U.S. forces moving in conjunction with many Arab country forces, in conjunction with many European country forces on land and on the sea, that he's taking another look. Because we are deadly serious. I want to see these economic sanctions work.

I'm not too good at the emotional side of it, but when you talk to the parents and spouses of our kids halfway around the world, it makes a real impact on you. I remember when I got off the plane at the Marine base, and they were saying, "Take care of my husband," and yet, "We back you 100 percent." So, I don't think that's a conflict exactly, but I want to take care of every young man and woman that's serving the United States halfway around the world. But they want, and I want, to see that Saddam's aggression is unrewarded and, indeed, repudiated. So, the moving of U.S. force up to now has sent a strong signal to him. We have the finest, most highly motivated, best trained, best equipped Armed Forces in the world. And they're right there. They're right there in substantial numbers -- land, air, and sea.

Now, Mr. Saddam Hussein, get out of Kuwait with no condition. This talk of some condition -- that is unacceptable not just to the United States but to the other countries around the world. I just got off the phone talking to President Mubarak [of Egypt] -- steadfast friend to the United States. He's made that same message loud and clear. On his travels he's heard it from those who were side by side with us in the Gulf, and then he's told his visitors that. So, we're staying pretty well together on this end.

Just a couple of more, and then I really have to get going. One, two, three over here, and then I'm -- you're history, Jessica -- I've got to go.

Q. When you say you think that Saddam Hussein has gotten the message that we are deadly serious, do you think now that chances are better for a negotiated settlement of this situation than they were?

The President. I don't know about a negotiated settlement. There's nothing to negotiate, other than the acceptance of the United Nations-mandated resolutions. So, there's nothing to negotiate. But in terms of a peaceful solution, I'm told that the economic effects are taking hold -- effects of the sanctions -- and that is encouraging. I'm told that he now sees that he's up against a substantial force that clearly could prevail in any battle. So, I'm hopeful that there will be a peaceful solution to this question. But there can be no preconditions. There can be no rewarding of aggression.

Q. There are two points to my question. There are some people who are saying that the U.S. continues to send in even more troops because the U.S. has underestimated the Iraqi troop strength. That, coupled with yesterday -- apparently in Spain, President Gorbachev apparently said he notes a softening on the position of Saddam Hussein. Do you have any reason to believe there has been a softening? Has Mr. Gorbachev told you something you'd like to share with us? Has that softening manifested itself in any way?

The President. I have not noticed a softening, but I've heard more kind of little threads of talk of "negotiation" -- that's all. Maybe that's what President Gorbachev is talking about. But he has not shared with me any feeling of a softening of public opinion. But what was the first part?

Q. Has the U.S. underestimated, perhaps, the troop strength of the Iraqis? Is that why we're continuing to send in more troops?

The President. No. I think it's true that Saddam Hussein beefed up his armor and his forces in Kuwait. From the original deployment, he then has stepped that up by pouring more armor in.

I'll never forget the day when he said, well, we're taking our people out of Kuwait, and they had one forlorn-looking soldier in the back of a truck waving goodbye -- truck heading north -- and then he had all his armor moving south. So, it was a sheer fraud. And he moved a heck of a lot of armor down against the Saudis. So, I'd leave it there, but I think that when you see a lot of force there, why, the free world and those of us that are allied together are going to say: Wait a minute! We're going to do what we've got to do to protect American life or Egyptian life or, in this instance, Syrian life or Saudi life. And that's why you're seeing a substantial movement of U.S. force and forces of other countries.

I keep repeating this because it's a very important point. It is not the United States versus Saddam Hussein; it is the United States, big majorities in the Arab world, and the United Nations versus Saddam Hussein. And that point -- I keep making it because he is still trying to divide and weaken this strong coalition. And he's failing, he is failing miserably because all these countries are united against his brutal aggression.

Yes, Rita [Rita Beamish, Associated Press], and then Jessica. I'm recanting because I wasn't very kind. Go ahead.

Budget Agreement

Q. Just back on the budget for a minute. What do you think it says about your leadership and your ability to lead the party that you couldn't get more Republicans to stay with you and vote with you on this very important issue of the budget?

The President. I learned a lot from Ronald Reagan, with whom I worked closely and watched and learned. And in 19 -- what was it -- 82, when we had that big tax bill, I think we got fewer votes than we did today, and he went right out and did beautifully what he felt in his heart he should do, and say, look, I'm against increasing taxes and the American people know this. And he went right on about his business. And that agreement brought interest rates down. And we all went forth and said, wait a minute, every once in a while when you don't control Congress you don't get to do it exactly your way.

And so, I understand Republicans defecting from a package that they don't like. But a President, to make something happen, once in a great while has to make a significant compromise. And that's what I did. And I think the American people understand that. They know that I'm trying pretty hard, and they know that I have their interest at stake when I want to see interest rates down and more jobs for the working men and women in this country. And that's the way I'd handle that one.

Now, last one, Jessica, and then I am leaving.

White House Staff

Q. Well, there is conventional wisdom and Periscope and other information from our weeklies that suggest there's a Cabinet shakeup in order: that the Budget Director's going to be going to head a financial firm, that the Chief of Staff will be going to the campaign trail, that [Secretary of Transportation] Skinner will go to the Budget -- all kinds of things. Anybody else resign or retiring since [Secretary of Labor] Elizabeth Dole?

The President. Jessica, you know something? I don't know who writes these columns -- Periscope -- I mean, you talk about sheer mischief. In the ones I've seen -- you go back and look at them. Somebody ought to go -- not you all, you all do your job, ask the questions. So, I wish I were in a case to ask all the knowledgeable people here, who writes this stuff? I mean, if all that's going on, I don't know about it.

Q. Does that mean it's true?

The President. No.

Q. No shakeup then?

The President. Not that I've ever heard of. And maybe I'd be the last to know, but I don't think so. [Laughter] I think I'd be the first to know, and I'd know it way ahead of Periscope, whoever he is, whoever she may be. It is pure unadulterated gossip that comes out of these columns. It is not serious coverage. So, I can't comment; I haven't even seen this. I guess they didn't dare show it to me because I've been a little irritable lately, trying to get this job done.

Budget Agreement

Q. Irritable? Why would you be irritable?

The President. I'm going to finish my diatribe here. What?

Q. Why would you be irritable?

The President. Things aren't going exactly the way I want them done. I wish we could have got this deficit down without touching revenue. I wish that we could have got it done without all this inside-the-beltway furor because it's diverted me from major objectives.

Q. Do you feel -- by Republicans in all of this -- --

The President. No, no, no. I feel happy about Republicans. I'm glad this is behind us, and I wish we had more of them. No matter what little philosophical wing of the party they're from, all of them would be better than what I face when I try to get stuff done from the Democrats. I mean, that's what it's all about.

President's Campaigning and Pacific Island Nations-U.S. Summit

Q. Well, you've got strategists, aides to Clayton Williams [gubernatorial candidate] in Texas, who say he's losing points because you've come to Texas and you're campaigning for him. How do you feel about that?

The President. I feel they're lying. [Laughter] Otherwise why has he invited me back? And I feel that my son, who I talked to -- who talked to somebody high up -- tells me that Williams is doing very well. So, please go to Texas and find out and take a look at whether the President can help a candidate in Texas or not. Please don't get it from some Periscope, if I might -- --

Now, wait just a minute here. I have a major national announcement here. Linda [Linda Tiara, CBS News], sorry. I'm glad to be in a place from whence you cometh. [Laughter] I might say, let me use this seriously to thank the people in Honolulu, your home, I believe, for this wonderful hospitality.

And again, I want to end on a nonpartisan note. I hope that you will record that this is a very important meeting. The United States -- we're caught up in Iraq or worries about Saddam Hussein and new developments in Eastern Europe and my desire to help lift the debt off the countries in South and Central America. But we never should neglect our friends. And we are a Pacific power. And this meeting -- some of these leaders come from very small countries, but they are properly proud of their sovereignty. They are concerned about the very problems that I fight, whether it's environmental or economic growth or revenues. And for me, it's been a wondrous day. And I think it is very important that a President demonstrate -- in this instance to the people of the Pacific -- that we are not going to neglect our friends no matter how pressing the business of the world might be from other quarters.

Thank you all.

Q. Can you -- no new taxes -- read your lips again? [Laughter]

The President. Thank you so much. Read my what? [Laughter]

Q. Yes, that's right. We can't figure out which part of your anatomy.