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Office of the Press Secretary

For Immediate Release June 17, 1993


The East Room

8:02 P.M. EDT

THE PRESIDENT: Good evening. Ladies and gentlemen, first I want to speak with you about a situation that all of us have followed very closely in the last week, and that is the United Nations' action in Somalia.

General Powell reported to me this afternoon that this operation is over and that it was a success. The United Nations, acting with the United States and other nations, has crippled the forces in Mogadishu of warlord Aideed, and remains on guard against further provocation. Aideed's forces were responsible for the worst attack on U.N. peacekeepers in three decades. We could not let it go unpunished.

Our objectives were clear: The U.N. sought to preserve the credibility of peacekeeping in Somalia and around the world, to get the food moving again, and to restore security. I want to congratulate the American and the United Nations' forces who took part in this operation. In this battle, heroism knew no flag. And in this era, our nation must and will continue to exert global leadership as we have done this week in Somalia.

Here at home, America is on the move. These past few days have been an impressive and important series of victories for the American people. Congress has taken major steps to limit the influence of special interest and their money in our lawmaking and in our campaigns. Congressional committees have also approved my plan for more college loans for the American people and to enable tens of thousands of them to pay their loans off by community service through their states and nation.

But the most important thing I want to discuss is the progress that is being made, the remarkable progress, on the economic plan. Last month the House of Representatives passed the plan to reduce the deficit, the first step toward creating jobs and increasing incomes. Yesterday, the Senate Finance Committee cleared the way for action by the full Senate.

Make no mistake about it, this means that we are putting our economic house in order. Getting the economy back on track depends upon Congress passing this economic plan. It's necessary; it's fair; and it will work.

I propose, indeed, I have insisted upon $500 billion in deficit reduction to be locked away in a deficit reduction trust fund. We will be making historic cuts in the deficit by making historic cuts first in government spending, then by making highincome Americans pay their fair share so middle-class Americans will be treated fairly in the tax burden, for a change.

Seventy-five percent of the new taxes proposed fall on the top six percent of the American people -- those with incomes above $100,000. Now, some of the critics of this plan in Congress prefer instead to cut Social Security or health care or tax benefits for elderly people just above the poverty line, or working people just above the poverty line so that the wealthy won't pay so much. I'm here tonight to say to you and to the American people that I will draw the line here. We have to reduce the deficit by reducing the unfairness of the tax patterns of the 1980s and, once again, asking all Americans to do what is right and fair. We can't simply balance the budget on the backs of the old, the sick, the veterans and those who work hard, but are just barely making ends meet. It's not right.

Let's look at what's at stake here. First of all, this chart shows that if we do nothing, the inherited deficit, what we found when I came into office, will go up by 1998 to about $400 billion a year. If this deficit reduction plan is passed, we will cut $500 billion out of the deficit. That's the difference in this line and that.

As all of you know, and as you've pointed out in various ways in the last few weeks, I just got here. And I may have a lot to learn, but I didn't create the red line. What I'm trying to do is to change the red line and bring the yellow line in. And let me say, to get the yellow line down here, we have to bring about an affordable health care plan for every American. And that's the next big step.

But look what this deficit reduction plan alone will do. I want to emphasize once again, because there's been so much talk about taxes, that this is the most progressive tax plan this country has seen in decades. Two-thirds of the money will be paid by people with incomes above $200,000. Seventy percent of the economic gains of the last decade went to the top one percent of the American people. They are in a position now to pay more to help make this economy move again, and they will.

This is the monthly payment, if my full economic plan is passed, by people with incomes above $200,000. And you can see what happens here to the plan with an actual modest break for people at the bottom end of the income scale. This is a very progressive and fair plan.

Now, finally, let me say there's been a lot of talk about spending cuts here. If you look at this plan, for every $10 in deficit reduction, $5, half of it, comes in spending cuts; $3.75 of the $10 comes in tax increases on the highest income Americans, the upper six percent; and $1.25 comes in taxes from the middle class, people with incomes below $100,000 but roughly above $30,000. Families with incomes below $30,000 are held harmless in this program.

Now, that's the way this program works. Five dollars in spending cuts, $3.75 in taxes from the wealthiest Americans, $1.25 in taxes from the middle class. It's fair and it's balanced. And I hope that the Congress will adopt it.

Let me say that as I open the floor to questions, the real issue here is whether we will reverse the pattern of the last 12 years where Presidents send budgets to Congress that are never seriously considered and everybody is afraid to talk about taxes because they're afraid, no matter what happens, that will dominate the agenda, nobody will know about spending cuts, nobody will know about deficit reduction, nobody will know about fairness. I've tried to tell the truth to the American people. And if this plan passes, you will see a continuation of what's happened already in the last five months. Low interest rates, increased housing sales, more jobs coming into the economy.

In the four first months of this economy alone we had a bigger growth in construction employment, 130,000 people, than we have had in nine years. Why? Because we're serious about bringing the deficit down. That's what this last week means. It means continued victory for the American people if we can stay on this road.

Q Since Vance-Owen is dead, will the United States approve of a partition of Bosnia if the three factions meeting in Geneva actually approve it? And also, isn't NATO really obsolescent now? I mean, hasn't it outlived -- it can't stop the slaughter in Europe, it won't be the policeman in Europe?

THE PRESIDENT: There's two separate questions. First of all, as you know, my preference was for a multi-ethnic state in Bosnia. But if the parties themselves, including the Bosnian government, agree -- genuinely and honestly agree to a different solution -- then the United States would have to look at it very seriously.

Secondly, I do not agree that NATO is dead. NATO was limited in what it could do in this instance because there was no agreement among the NATO partners, first of all, and because any organization of states was limited by the rules that the United Nations imposed in the former Yugoslavia -- on the arms embargo, for example.

The clearest example I know to give you that NATO is not dead was provided by the leaders of all the Eastern European countries that used to be communist that aren't anymore. When they came here a few weeks ago for the Holocaust dedication, every one of those Presidents said that their number one priority was to get into NATO. They know it will provide a security umbrella for the people who are members. And I think we need to continue to be involved in it.

Q Who's the enemy?

THE PRESIDENT: Well, there will be different enemies. The enemy will be anybody that threatens the security and the peace of the member nations, the values that we hold important. There are all kinds of possible problems in the years ahead, from terrorism, from the proliferation of weapons of mass destruction, from yet unforeseen developments in countries around NATO. So I don't think it's time to dismantle NATO. I think it's very, very important.

Q Mr. President, doesn't this plan for carving up Bosnia send a dangerous message to separatists around the world, particularly in the former Soviet Union, that military aggression pays?

THE PRESIDENT: I think that this plan shows that a civil war which has roots going back centuries -- literally centuries -- based on ethnic and religious differences has not been resolved in the way that I certainly would have hoped. I think Serbian aggression has been rewarded to the extent that the United Nations resolution permitted the Serbs to send arms to the Bosnian Serbs and permitted the Croats that were next door to Croatia to have access to more weapons than the Bosnian government, predominantly Muslim, had. And I think that was a mistake. But I don't think that anybody should overlearn that lesson. Everyone who looks at this concedes that this is perhaps our most difficult foreign policy problem.

Q Mr. President, getting back to your pie chart, you said that a $1.25 from the tax increase will hurt the middle class. During the campaign --

THE PRESIDENT: I don't think it will hurt the middle class. I think that it will help the middle class because it will be a way of bringing the deficit down.

Q A dollar and a quarter out of that tax bite will hit the middle class. In the PBS debate during the campaign, you said the only thing Paul Tsongas has recommended that I haven't is a three- to five-cent-a-year gas tax increase, and I'll be darned if I understand why we should do that without giving some offsetting tax relief. Then, in Putting People First, which was your campaign manifesto, you said you opposed a federal excise gas tax -- I quote -- "instead of a back-breaking federal gas tax, we should try conservation."

Why are you now willing to go along with the Senate plan to keep it moving through the Senate for a gasoline tax? Do you think you can defeat it in conference, and if you do, will you try to restore the Btu tax, as your Budget Director suggested today? And if so, won't you then lose Senators Boren and Breaux and all the other opponents when it gets back to the Senate? Isn't it a no-win situation?

THE PRESIDENT: First of all, I think it is a win-win situation if the Senate passes a budget that has $500 billion in deficit reduction, locks the spending cuts away in a trust fund, and asks the highest-income Americans to pay their fair share. I think that's a win-win situation because I think we'll go to conference and we'll get a plan that will meet those criteria and will also be fairer to middle-class people and to the working poor. There's also a lot of important provisions in there that I care about that will help to encourage people to move from welfare to work.

The Senate bill is very different. It does have a 4.3 percent fuel tax in it. That is very different from $.03 a year which is $.15 over five years; or $.05 cents a year, which is $.25 over five years. A 4.3 percent tax flat is not nearly as onerous as that. I wish we didn't have to do that. But I would remind you that after the election and before I took office the aggregate deficit over the next five years was written up by $165 billion. I'm doing the best I can to use very conservative, hard-headed revenue estimates to get the deficit down, keep interest rates down, so that people in the middle class can save more money than they'll pay if they refinance a car loan or a home loan or take out a business loan with lower interest rates.

And tonight, there will be millions of people who will either watch us or hear about this tomorrow who have refinanced their homes just since November -- with interest rates dropping, they'll save more money in one year than they'll pay in five years under this program. So I still think, on balance, it is the right thing to do.

Q You say this Somalia operation has been a success. Does that mean that the United States and U.N. forces have captured the Somalia warlord, General Mohamed Farah Aideed, and his associates including Colonel Omar Jess? And if you haven't captured them, what are you planning on doing with them if you do capture them? Are they going to be put on war crimes tribunal or anything like that?

THE PRESIDENT: No, they have not been arrested. The purpose of the operation was to undermine the capacity of Aideed to wreak military havoc in Mogadishu. He murdered 23 U.N. peacekeepers. And I would remind you that before the United States and the United Nations showed up, he was responsible for the deaths of countless Somalis -- from starvation, from disease, and from killing.

The back -- the military back of Aideed has been broken. A warrant has been issued for his arrest. If he is, in fact, arrested, then the United Nations will have to determine what appropriate action to take. That is the decision the United States is leaving to the United Nations, and one I believe we should.

Q Mr. President, the original deadline for the unveiling of your --

THE PRESIDENT: I'm sorry, that's a great tie. I just lost it for a moment there. (Laughter.) I wish the American people could see this tie. (Laughter.) Go ahead. I'm sorry.

Q Some people believe that that's what the White House press corps is all about, Mr. President, Mickey Mouse. (Laughter.)

The original deadline for your -- the unveiling of your health care reform plan has come and gone. When will the plan be unveiled? What are the prospects for congressional passage this year? And if you don't get it done this year, won't it be very difficult to do so next year because of the congressional elections?

THE PRESIDENT: Let me answer the first question. The task force has made its report to me. They have given me a number of options from which I must choose before I can finalize a bill. The White House is continuing to consult with people who know a lot about this issue. My wife, as you know, went to speak to the American Medical Association just a few days ago.

Is he trying to give me some water? (Laughter.) Let me answer the question first. Thank you, John. He always wanted to be on television. I hope his mother -- (laughter.)

The American -- my wife talked to the American Medical Association recently. We are consulting regularly with both the Democratic and Republican members of Congress. She also had a long meeting with several Republican House members just a couple of days ago.

We have determined that -- first -- and I, personally, am getting quite close to making the final choices from among the options there. I do not believe we can make any serious attempt to go forward with this until the economic plan and the budget is in place; then we will go forward with it.

I think because of all the consultation which has been done and all the work that's been done, there's a real shot we can act on it this year. I do not share the view that there's no chance Congress will act next year, although I believe we can do it this year, because I expect a lot of Republican as well as Democratic support for this.

And I think that this issue affects the American people so deeply -- there are millions of families out there who are terrified they're going to lose their health insurance, who are terrified they can't afford it, who are terrified because somebody's been sick in their family, if they have to change jobs they'll be without it; as well as all those who are working for a living without health insurance; as well as all the businesses that are afraid they're going to go for broke, that the impetus behind doing something will be very great. I think it will be good, not bad, for the American political system to act on this.

So I think whenever the debate really begins in earnest, you will see the prospects of passage intensify, not diminish.

Q If that does go over until next year, sir, will that become the issue in congressional elections?

THE PRESIDENT: I think that and the condition of the economy will be the big issues. And whether we are actually facing up to our responsibilities in this new global economy. But that wouldn't be the worse thing in the world, except I hope and believe that the plan will pass before all that political season starts.

Q Mr. President, Mrs. Clinton recently said that she hopes to tackle welfare reform as her next priority. Will she head the administration's welfare reform effort? And do you expect to get that done this year, too, or is that something that will have to wait until 1994?

THE PRESIDENT: Well, that, again, is a subject that I expect we'll have broad bipartisan support on. And I would expect that all of us will be involved in it. My wife is very interested in this because it affects children.

But let me say that the first big block of the welfare reform package is now being considered by Congress, and that is the earned income tax credit. Most Americans don't know what that is, but basically it is a change in the tax code that will permit us to say to working families if you work 40 hours a week and have a child in your house, you can be lifted out of poverty. That will remove all the financial incentive to prefer welfare to work if we can then pass in the health care reform health coverage for all children, like every other country does, so we remove that incentive.

But we expect to have a welfare reform package that will literally end welfare as we know it -- that will put a time limit on welfare and, after that, people who have been through the education and training programs will have to work. And I, again, would like that if it could be done this year. That will depend on how warmly embraced it is by Congress.

Let me just make one other point. The national service bill, which will provide more college loans and the opportunity to work them off with service, is moving through Congress more quickly than most people thought because we were able to get good bipartisan support and work out a lot of the details. If we can do that on welfare reform, I think we can do it this year.

Q Mr. President, going back to the budget for a moment, if you manage to get the budget passed, as it seems to be heading, you will have achieved two major objectives: deficit reduction and getting the wealthy to pay a larger share of the cost of government. But there was a third major objective that you talked about in the campaign and early on in your administration as crucial for the health of the economy, which was your investment package, your new spending that you proposed, which does not seem to be faring well in Congress at all. So you seem to be in a position where you've managed to overturn Reaganomics, but not enact Clintonomics.

So let me ask you two things about that. One is why? What's your analysis of why your spending programs have not been successful? And, second, what do you propose to do about it?

THE PRESIDENT: If you look at the budgets, if you look at where we're going with the budgets, we had to cut back all spending in the first two years of this five-year budget period to deal with the fact that the deficit was higher than we thought it would be. And I had to do that as well. But this is a five-year budget for long-term growth of the American economy.

Over the long run, we do have to increase investment. Let me also say that just because we are freezing all domestic discretionary spending for five years doesn't mean there aren't changes within those categories. We're cutting a lot of stuff so that we can increase investment in things like Head Start for children and job training for workers and new technologies to help convert from a defense to a domestic economy. A lot of that new investment is in there.

Secondly, I expect this bill to treat the other part of my investment budget, that is, the private sector part, quite well. I think there will be an increase in the expensing allowance for small business, which will really help small businesspeople to hire more workers. I think there will be an empowerment zone proposal in the final bill which will finally test whether free enterprise can to into depressed cities and rural areas and put people to work and invest and start businesses. I believe it can.

I think those are the kinds of things that you will see there. I think the earned income tax credit again will pass so that we can lift the working poor out of poverty. So I expect a big portion of the investment program to pass and I'll be surprised if it doesn't.

Q Mr. President, I'm surprised that for the first four months you came into office you were saying how bad the economy was and how important it was for your program to be enacted to grow the economy. Now, we hear you in the last week or so talking up the economy, saying how well things are going, and yet, your program hasn't passed. What are we to make of this? Why have you changed your mind about the economy?

THE PRESIDENT: First of all, I think the economy is still bad for most Americans. But the trends are good and the trends are plainly tied to the determination of this administration to bring the deficit down. We began to see a substantial drop in long-term interest rates after the election when Secretary of the Treasury Bentsen announced that we were going to have a serious deficit reduction plan that would include entitlement cuts, other budget cuts, tax increases on the wealthy, and an energy tax. We saw that. And every student of this, starting with the Chairman of the Federal Reserve, who's testified before Congress to this effect, has said that if we continue and pass this, we will get interest rates down. So those things have been coming down.

That's why the Home Builders Association of America -- not a Democratic group, presumably largely a Republican group -- came from all over the country to Maryland a few days ago to endorse the economic program, because it is already beginning to bring interest rates down

So are most people affected by the economic recovery? No. But is it a good thing that you have 755,000 private sector jobs in the first five months; that you have 130,000 jobs in the construction industry, the biggest gain in a four-month period in nine years? Yes it is. So the point I'm trying to make is we're taking the right direction, but we've still got a lot of changes to make.

Q Mr. President, you said a few minutes ago that you've broken the back of the Somali warlords in Somalia. However, Mohamed Aideed is still at large. This brings to mind the same problem that happened with the previous administration with Saddam Hussein. How can you assure the American people that you're not going to get sucked into an ever-growing vortex of war in Somalia?

THE PRESIDENT: Well, there's a big difference there. Aideed is not in control of the government of Somalia. The United Nations force is there, they're still promoting peace. They're now going to be able to deliver food, medicine, do their work and try to help engage in the long-term process of nation building. And we never, ever, the United Nations and the United States never listed getting rid of Aideed as one of our objectives. In fact, as long as he was willing to cooperate with the United Nations, he was able to live and work in peace right there in Mogadishu.

So what happens from now on in will be a function of, number one, what the United Nations thinks is appropriate for his conduct to date, and, number two, what he does in the future.

Q Mr. President, I have an easy problem for you, and it's domestic, too.

THE PRESIDENT: There are none. (Laughter.)

Q This one's very easy. A lot of Americans are not wildly pronuclear and thought the U.S. may have overreacted in past years in its very heavy-handed treatment of New Zealand. Would you consider meeting now with a New Zealand leader and discussing the situation? Isn't there some way that a compromise can be reached so you can agree to disagree, but still restore the political and security relationship?

THE PRESIDENT: I've given absolutely no thought to that question. (Laughter.) And I'm afraid if I give an answer to it, I'll be in more trouble tomorrow than I can figure out. (Laughter.)

Q Mr. President, as you point out, your economic plan would reduce the budget deficit by $500 billion over five years, which is a significant improvement over what we've seen in the past. But your critics would point out that the budget deficit would continue to mount by hundreds of billions of dollars a year; and that your attack on the deficit is limited to lowering projected spending increases, rather than taking the much harder tack of making real cutbacks in the budget. Can't you do more to deal with the problem of this deficit and runaway spending?

THE PRESIDENT: Let me have the chart again. The answer to that question -- first of all, let me answer it. You asked two questions, not one. It is absolutely true that if this whole thing is adopted or any other deficit reduction plan that has been presented to date is adopted, by the fifth year the deficit starts to inch up again and you don't get down to zero.

Now, that is true, but why is that? That is because primarily of the projected exploding costs in medical care through Medicare and Medicaid. And because we have programs like Social Security and other retirement programs where people are given cost of living increases year-in and year-out, something that most Americans support. But the prime culprit here is Social Security -- I mean, is medical costs, not Social Security. The prime culprit is medical costs. They've been going up way faster than inflation.

Now, I want to make two points. Why do we reduce the deficit only $500 billion over five years, even though that's a huge amount? Because it was the considered judgment of the economic team -- Secretary Bentsen, Mr. Panetta, Mr. Rubin -- that in a recession there was a limit to how fast you could contract the deficit, and that this would be a very rapid reduction of the deficit in a time where there's very slow economic growth around the globe. We think it will actually lead to some expansion of the economic activity. Why? Because there's so much debt built into our system at high interest rates that if people just go refinance all their homes and their business loans, it will give them a lot of cash in their pocket and that will stimulate the economy to grow.

Secondly, it is our considered judgment that we cannot get the deficit down to zero, which is where it ought to be, until we do something about health care costs, which is why the next big piece of this administration's work is to provide a comprehensive health care plan that will bring health costs in line with inflation.

If you do that, then this yellow line here, instead of going up, will keep going down. And since there is no historic precedent in America, let me ask you to go back and look what happened in Japan in the mid-'70s to mid-'80s. They had about the same size deficit we do in the mid-'70s. They decided they were going to wipe it out. They took 10 years to wipe it out, not five. But they did it. And today, in spite of all their economic problems, they are the only major nation in a surplus position.

We can do it, too, if we do this, then tackle the deficit. And let me remind you of one other thing, in September, the Vice President's task force will make it's report on reinventing government and reorganizing the whole way the government operates. That will give us another whole shot to deal with this issue.

Q Mr. President, John F. Kennedy once said that the coverage he'd been getting as President, that he'd been reading it more and enjoying it less. And many other Presidents have expressed similar sentiments. Lately, sir, there have been some indications, at least, that you may be experiencing those feelings as well. Can you give us your analysis of that?

THE PRESIDENT: I don't think I could say it any better than President Kennedy did. (Laughter.) But let me say this: You have to do your job as you see it. And I'm going to do mine the best I can. Everybody in America knows, as I said, that I did not live and work in this city until I became President. I knew when I came here that there would be things that I would need to learn about the processes and the way things worked. I believe then and I believe now that if I do the big things right and deal with the big issues, that eventually the other things will also work themselves out.

In the meantime, I think the most important thing that we attempt, you and I, to create an atmosphere of trust and respect, and that you at least know that I'm going to do my best to be honest with you. And I think you're going to be honest with me, and I expect you to criticize me when you think I'm wrong. The only thing I ever ask is, if I have a response and I have a side, let that get out and we'll watch this conflict unfold. I mean, this is nothing new. President Jefferson got a rough press, too.

Q Sir, on Haiti, the Security Council of the U.N. has stated that they're giving Haiti until the 23rd of this month before they put real tough petroleum and economic sanctions. Do you think that will solve the problem, or will we see a multinational force in Haiti as we do in Somalia?

THE PRESIDENT: As you know, since you asked the question about Haiti, the United States is pushing for the U.N. resolution to strengthen the sanctions to include not simply a freeze on assets and lifting visas, but also to include oil. I think it will make a difference. And the members of Congress who are expert in Haitian affairs and who talk to people in Haiti believe that it will make a difference.

Secondly, I have always assumed that to really facilitate the restoration of democracy in Haiti, there would have to be some sort of multinational force there. But I would remind you that, recently, when that was proposed with the support of the United States, both sides rejected it. President Aristide rejected it and the de facto government rejected it, which was a disappointment to us. So we decided to go back to the drawing board, look for tougher sanctions.

In the end, since both sides distrust each other to treat each other civilly, even to keep from shooting each other, there, in my judgment, will never be a resolution of that, as long as the main players are who they are, unless we have a multinational peacekeeping force.

Q Mr. President, what have you been told about the plot to assassinate George Bush in Kuwait? How definitive is the chain of evidence against Iraq and what do you plan to do about it?

THE PRESIDENT: I have not received the final report from the FBI, and until I do I don't think I should say what I will or won't do.

Q Mr. President, in Bosnia the Europeans did not want to take action because the United States did not have troops on the ground. In Somalia, although we turned over operations to U.N. peacekeepers about a month ago and it was Pakistani soldiers who were attacked, the forces that went into action were largely American; most of the firepower was American. You were just talking about a multinational peacekeeping force in Haiti. Is the United States now being put in the role of enforcer for the United Nations? And what principles or thoughts do you bring to the table when you consider committing U.S. troops to enforce not something that may be strictly a U.S. interest, but something that is the will of the international community?

THE PRESIDENT: I think we have to ask ourselves, first of all: What are the interests of the American people? Secondly: What are the values and humanitarian concerns at stake? And, thirdly: What is the price of doing what we might be asked to do?

I think -- let me just say on Bosnia, it's not so simple as that. We didn't have an agreement -- ever -- about what troops would do. I pledge to the American people in the campaign last year -- and I reaffirmed repeatedly -- that I did not think we had any business sending troops into combat in Bosnia. I also said if there were a cease-fire and a genuine peace agreement and the United Nations had to guarantee the peace agreement that the United States would participate. I don't think we should minimize the importance of leading the way, but also setting an example.

Let me tell you, a lot of other countries -- the President of Namibia was here, a fairly small country. They sent people to Somalia. There are people from all over the world who sent people to Cambodia in very dangerous circumstances. The Pakistanis are the people who were murdered in Somalia. So I think this is a very good thing.

Yes, America can lead the way. But it is very moving to me to see all these other countries -- Ireland sending people, putting themselves on the line. Not just government employees, but people working through other organizations to try to help solve these problems. There is a remarkable confluence of people trying to promote democracy and human rights and freedom and market economics. And I think that if we can leave that an acceptable price, that is in our narrow interest and it is certainly in our broader human interest.

Q Mr. President, now that you've made your decision about the Space Station, are you going to appoint a new NASA administrator? And if you are, when?

THE PRESIDENT: I don't have any plans at this time to do that. Let me just make a point about the Space Station, if I might. As you know, I have always supported the Space Station; I realize that some people don't. The United States indisputably leads the world in space. It is an important area of science and technology. I think it would be a mistake, after all the work we've done, to scrap the Space Station.

There is a $4-billion budget cut in my budget for the Space Station because we're going to redesign it and redesign the management system of NASA. We've brought in all of these scientists to look at it, to tell us exactly what ought to be done and exactly how this thing ought to be run and we're going to have to make some changes. But I want to tell the American people: We need to stay first in science and technology, we need to stay first in space. We're going to be able to get more people to come in and invest with us, and we're going to have to make some very tough management decisions at NASA to get that done.

Q Mr. President, many African American leaders have expressed their anger or extreme disappointment with the way you handled the Lani Guinier nomination and with the way you handled the Haiti situation. In addition, the Congressional Black Caucus has said it is very angry with the fact that they voted for your budget package and cast some very politically difficult votes, only to have you negotiate a watered-down package in the Senate. How would you assess your relationship right now with blacks? And what are you doing to mend fences with the Congressional Black Caucus so that they will not vote against the conference report on the budget package?

THE PRESIDENT: Well, first of all, I did not negotiate that bill that the Senate passed. That is just inaccurate. I did not do that. And I think you know what I liked about the House bill and you know where I have been on the issues and you know what the principles are I've enunciated.

I think Senator Moynihan did a remarkable job to get a bill out that does have $500 billion in deficit reduction, more spending cuts and tax increases and taxes falling primarily on upperincome people. I think to that extent we ought to give him credit. But there has been no negotiations.

Secondly, and quite to the contrary, when members of the Black Caucus came to see me and asked me to pursue sanctions in the United Nations against Haiti that included oil, I examined it and I agreed to do it. They were the first people who asked me to do it. And very shortly after the meeting I agreed to go forward. But they know, the ones who follow the Haitian developments, that even before that I offered to have the United States participate in a multinational peacekeeping force to restore democracy and to restore President Aristide and that he rejected that. They know that's a fact.

Thirdly, I don't think my commitment to civil rights is very much open to question. And I think my actions as President and the appointments I've made, and the things I've stood for document that. And I believe that over the long run the Black Caucus and the Clinton administration will continue to be very close. And I've talked to any number of them personally, recently.

Q On campaign finance reform, now that most of the public financing provisions have been removed from the Senate bill, how do you convince people that this is truly meaningful campaign finance reform? And also, will you seek at some point in the future, perhaps, to put that public financing back into another measure?

THE PRESIDENT: First, let's see what the House does. Again, this is a bill you're going to have to watch come out of conference. The House will probably adopt a somewhat different bill.

But let's talk about what the Senate bill does do. The Senate bill reduces the influence of PACs and special interests; it limits the cost of campaigns; it spends public funds, if necessary, if one party violates the spending limits then the other party can get public funds in the form of communications vouchers so that the airwaves will be open to both parties and people can hear both sides.

So this is a vast advance over the present law in breaking the back of special interest domination of politics and elections. So I like it in that regard. Let's see what the House does. I think we can get a good bill out and I hope both sides will vote for it.

Q Mr. President, will you support the Senate's ten percent increase in the capital gains tax?

THE PRESIDENT: They imposed a ten percent surcharge because there's now a difference between the capital gains rate and the income rate. And, as you know, the theory of the Tax Reform Act of '86 was to level them. Let's see what comes out of the conference report. What I want is a tax system where 75 percent of the burden falls on the top six percent of the American people -- at least that progressive. And if it is that progressive, then I'm open on the details. But I want to see what the final bill is. That's the key thing: Will the wealthy pay their fair share? Will it all be in a trust fund to reduce the deficit? And will the ratio be at least as good as the one I showed -- $5 of every $10 in spending cuts; $3.75 in tax increases on upper income people; $1.25 on the middle class.

Thank you very much.

THE PRESS: Thank you.

END8:41 P.M. EDT