Statement by Press Secretary Fitzwater on the Federal Budget Negotiations

The President met for 1 hour and 40 minutes this afternoon with congressional budget negotiators to consider a Federal budget that would reduce the deficit substantially on a multiyear basis, allow the economy to continue to grow, strengthen the budget process, and avoid the adverse economic and programmatic effects of a stalemate that otherwise might ensue. The President and the negotiators agreed that it was important to reach an agreement as soon as possible. The President discussed the reasons for these summit meetings. He said there was no immediate crisis. "We are fortunate that the economy continues to grow," he said, "but it is important to act while the economy is still growing, for growth is not as strong or secure as it should be."

The President said interest rates are higher than forecast and receipts are lower. S&L related borrowing is up, so the estimated fiscal 1991 deficit is also going up. The President concluded his opening remarks by saying, "The American people are tired of seeing the budget process seem to fail year after year. They would welcome our doing the job right and our fixing the process at the same time."

The congressional leadership gave opening remarks concerning their interest in achieving a successful agreement, and all indicated a shared responsibility by both branches of the Government to reach agreement.

Budget director Dick Darman outlined the current budget status. Several Members discussed the extent of this problem and the difficulty of the task faced by negotiators. The group concurred that they must tackle this problem in good faith and would not publicly discuss specific recommendations or proposals.

Congressman Richard Gephardt will chair the next meeting Thursday, May 17, on Capitol Hill.