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Office of the Press Secretary

For Immediate Release December 16, 1997


                        Dean Acheson Auditorium
                          Department of State
                            Washington, D.C.         

2:00 P.M. EST

THE PRESIDENT: Good afternoon. It is only fitting that we gather today in the Dean Acheson Auditorium, for as Acheson was in his time, we truly are present at the creation -- the creation of an era after the Cold War that might be unrecognizable for the wise men of Acheson's time; a new era of promise and peril, being defined by men and women, determined that the 21st century be known as the New American Century.

I briefly want to review the progress we've made in the last year and our mission to prepare America for that new century. Even as we reap the hard-earned profits of the strongest economy in a generation, our nation refused to be complacent. We confronted big issues in 1997. We passed a plan to balance the budget. We made college affordable and community college virtually free to every American. We cut taxes for middle class families with children. We saved Medicare for another decade. We extended health insurance to 5 million children in lower-income working families. We cut crime, reduced welfare, strengthened our schools.

We made the world safer by ratifying the Chemical Weapons Convention, and at Kyoto, with the Vice President's leadership, we took an important step toward protecting the environment even as we promote global economy growth.

We renewed the consensus for honest engagement with China. We stood strong against a rogue regime in Iraq. We made real progress toward lasting peace in Bosnia. Next week I will personally thank our troops there and talk to the Bosnian people about their responsibilities for the future.

Of course, even as we reflect on how far we've come in our mandate to carry our enduring American values into a new century, we realize we have far to go. Nineteen ninety-eight will be a year of vigorous action on vital issues that will shape the century to come. From education to the environment, from health care to child care, from expanding trade to improving skills, from fighting new security threats to promoting peace, we have much to do both here at home and abroad.

Earlier today, with the simple stroke of a pen, we helped to make European history. Secretary Albright and her NATO counterparts signed protocols of accession for Poland, Hungary, and the Czech Republic, formalizing our intent to welcome these nations as NATO's newest members, and a grand effort to defend our shared values and advance our common destiny.

This is a milestone in the enterprise I launched four years ago to adapt our Alliance to the challenges of a new era and to open NATO to Europe's new democracies. The entry of Poland, Hungary and the Czech Republic into the Alliance will make America safer, NATO stronger and Europe more stable and united.

The decision to add new members to NATO must be ratified by all 16 allies. I'm gratified that Congress has already taken an active, positive role in a bipartisan manner through the Senate NATO Observer Group that joined us at the Madrid Summit, and the extensive hearings and resolutions this fall. I will promptly seek the Senate's advice and consent on NATO expansion when Congress returns in January.

The United States has led the way in transforming our Alliance. Now, we should be among the first to vote yes for NATO's historic engagement. We are well on the way to the goal I set last year of welcoming the first new members to NATO by NATO's 50th anniversary. Today, I am pleased to announce the that NATO Alliance has accepted my invitation to come to Washington for that special summit in the spring of 1999. Together, we will strengthen NATO for the next 50 years, and I hope we will be welcoming its newest members.

Now, before I take your questions, in this room where President Kennedy held so many memorable press conferences, let me remind you that he once praised these exercises with tongue only somewhat in cheek, saying -- and I quote -- "It is highly beneficial to have 20 million Americans regularly observe the incisive, the intelligent, and the courteous qualities displayed by their Washington correspondents." (Laughter.) Precedence has its place.


Q Mr. President, three weeks ago in Vancouver you said that the economic chaos in Asia was just a glitch in the road. But the currency turmoil continues and South Korea says that it needs a faster IMF bailout. What -- how serious is this crisis for Americans, and will you go along with the additional funds that the IMF says it needs?

THE PRESIDENT: Well, first of all, the American economy is strong and the new numbers on low inflation, coupled with the very high rate of business investments, show that we have a significant capacity to continue to grow from within. Now, having said that, as I have repeatedly pointed out to our people, a significant part of our growth comes from our ability to sell to others around the world, including in Asia. And so it is very much in our interest to do what we can to support the Asian economies as they work to weather this crisis.

I remain convinced that the best way to do that is to follow the plan that we outlined at Manila. One, we need strong economic policies on the part of these countries. When you have a problem at home you have to address it at home. That's what we did in 1993 in addressing our deficit. Two, the IMF has -- and the other international institutions should play the leading role, and there is a framework within which they can do that and we know they can do it successfully when you look at what happened with Mexico. Third, we should be there, along with Japan and other countries, in a supporting capacity when necessary. That is the policy that will work.

I am very encouraged -- you mentioned South Korea -- I am very encouraged by the steps that they are taking to try to implement the IMF plan to take actions at home that are important, and I think it is terribly important that President Kim met with the three candidates for President in South Korea -- because they have an election coming up very soon, you know -- and they all agreed to support this plan to rebuild South Korean confidence of the markets and to work through this problem.

Now, do I think we may need to do more? I think we may need to do more within the framework that has been established, but that needs to be a judgment made on a case-by-case basis. The important thing is that the United States must be in a position to do more to fulfill its responsibilities. And that means, among other things, that it's very important when Congress comes back here that we take up again the bill to provide for paying the dues that we owe to the United Nations and for giving us the ability to participate in the so-called new authority to borrow provision of the IMF. That bill should be taken up and judged on its own merits, and I would urge Congress to do it right away.

But the most important thing is that we have a system in place; that system has to be followed: Strong domestic policies by these countries, the IMF framework with the other multinational institutions, then the U.S. and Japan and others there in a back-up role when necessary.

Q Mr. President, this may fall into the category of "with friends like that," but two of your former aides, advisors have written you off already, at the start of your second term. George Stephanopoulos says your a lame duck. Dick Morris says you've gone to sleep. What is your rebuttal, and what's the dog's name? (Laughter.)

THE PRESIDENT: Maybe that should be my rebuttal. (Laughter.) You know, President Truman said, if you want a friend in Washington you need to get a dog. (Laughter.)

Let me back up and let me just say, I don't know -- first of all, I'm not sure that Mr. Stephanopoulos is being properly quoted there. But if you look at what happened in 1995, I think it is very difficult to make that case.

I mean, if you compare year by year in each year of this administration, we have had significant accomplishments. But I think the -- 1997 we had the balanced budget, we had the biggest increase in aid to children's health since 1965, the biggest increase in aid to higher education to help Americans go to college since the G.I. Bill passed. We voted to expand NATO. We passed the Chemical Weapons Convention. We had a historic agreement in Kyoto. And along the way, we passed sweeping reform of America's adoption laws. We passed sweeping reforms of the federal Food and Drug Administration to put more medical devices and life-saving drugs out there in a hurry, and a score of other things, plus the beginning of the first serious conversation Americans have ever had about their racial differences not in a crisis. I think it was a banner year for America.

We have the lowest unemployment and crime rates in 24 years. Now we know we've got the lowest combined rates of unemployment and inflation in 30 years. We had a good year because we're all working hard. And all I can tell you is, in '98 it will be a more vigorous year. And perhaps you'll have questions about that, but we intend to have a very, very active time. So I can't comment on what others say. I just say that all you have to do is look at the evidence, look at the record, look at our plans for the future, and I think that it's almost worthy of a dismissal.

Now, back to the dog. (Laughter.) Let me begin by thanking all the children and others, including members of the press corps at the Christmas parties last night for their voluminous suggestions of a dog's name. We got great groups of suggestions -- people who suggested categories related to the coloring of the dog, people who suggested names related to my interest in music, naming all kinds of jazz musicians that I would love to have named our dog after. Then there was a whole set of Arkansas-related suggestions -- Barkansas, Arkinpaws. (Laughter.) Then there were suggestions that related to all of our family names, somehow putting them together, or saying since the Secret Service know me as POTUS and Hillary as FLOTUS, that we should call the dog DOTUS. (Laughter.) Then there was the parallels to our cat, Socks, saying we should call it Boots, or Shoes or something else like that.

In the end, our family got together -- we came down to about seven names, many of them personally inspired; and then to three. I finally decided to name the dog after my beloved uncle who died earlier this year. I'm going to call the dog, Buddy, because of the importance of my uncle to my life, but also because my uncle raised and trained dogs for over 50 years. And when I was a child growing up we talked about it a lot. And because the dog was -- as was in the press this morning -- the dog was trained for a couple of months with another name, it is also, I can tell you, the name he responded best to of all the ones that we sort of tried out on him. (Laughter.)

And I think while it's important that I train the dog, it's been a good two-way street. But mostly it's a personal thing. And it's ironic that Hillary had thought about it, I thought about it, and then one of my uncle's daughters called me last night -- and I didn't take the call last night because it was too late when I got done -- so when I called her this morning she said, you know, our family thinks you ought to consider naming it after dad, and I said, that's what we've decided to do. So I made a few of my family members happy.

But I want to thank everybody who participated in the exercise.


Q Mr. President, to go back to NATO and your celebration of this expansion, Bosnia kind of underscores the obligations that membership brings. The foreign ministers today have said they basically reached a consensus that there will be a need to keep troops there beyond the June pullout date. Can you tell us just what conditions you've set in order to allow U.S. participation in this?

THE PRESIDENT: Well, first of all -- you know this, of course, but I think it's worth repeating -- we have been involved for the last several weeks in a whole series of intense meetings about the situation in Bosnia -- where we are, what progress has been made. And let me point out that after four years of the bloodiest war in Europe since World War II, we've had 23 months of peace. It's easy to focus on the problems, but there has been peace, there has been a restoration of significant economic activity. A lot of the facilities, the water systems, the sewer systems, the schools have been rebuilt. Housing units have been rebuilt. We've had elections and the beginning of a resurgence of democratic processes.

So with all the continuing difficulties there has been, in my view, a significant amount of progress in the last 23 months, of which the American people can be justly proud, and indeed all of our allies in NATO and beyond NATO, and Russia and the other countries that are participating, can be proud of that.

We are discussing now actively both within the administration, with our allies in NATO and our other allies and with Congress what should be done after the June date for the expiration of SFOR. And as you know, I'm going to Bosnia on the night of the 21st to be there on the 22nd with our troops and to meet with people in Bosnia. And I will have an announcement about what I expect should be done thereafter before I go. I'll be able to shed a little more light on that for you.

Yes, go ahead.

Q After all the things we've learned in the months of hearings about campaign fundraising and campaign contributions, I wonder if you can tell us whether you still consider two people, John Huang and Charlie Trie, to be your close friends, sir.

THE PRESIDENT: Well, I think what we've learned -- first of all, what we've learned is that we need campaign finance reform. If anybody intentionally violated the law, then they should be held accountable. We've already had some examples of that -- not involving my campaign, but we've had some examples of that already in the last year or so, people who apparently intentionally violated the campaign finance laws. And no one should be exempt from that. We have laws.

But what we've also learned is, as I have been saying now for six years, the laws we have are inadequate. And I am hopeful that the vote we have scheduled for the spring, the fact that we finally have a commit to have a vote on some kind of campaign finance reform in the spring, will give us the kind of campaign finance reform that the American people need and deserve. And I can tell you, I believe most of the public officials would welcome it.

It is difficult because of the advantages that the Republican majority has in Congress in raising money from all sources. I understand the challenge that's on them to get them to vote for this, but we do have all the Democrats in the Senate, 100 percent of them now, lined up in favor of the McCain-Feingold bill and I am strongly committed to it. That is ultimately the answer to this.

The fundamental problem is not those that might have deliberately violated the law; the fundamental problem is that the system no longer operates on the 1974-75 system of rules. We need to do more to deal with it. Now, I would like to see more done, whether Congress acts or not. I would like to see the FCC explore its authority and try to do something to offer free or reduced air time for candidates for federal office, especially if they in turn agree to accept voluntary spending limits. I would very much like to see the FEC try to tighten up its rules on soft money -- they opened the floodgates in the beginning. There may be some things that can be done there. But in the end we have to have a decent campaign finance reform system if we want the kind of results that I think most Americans want.

Q As to --

THE PRESIDENT: I answered that question.

Q Mr. President, how long are you willing to tolerate Saddam Hussein's continued defiance of the United States and of the United Nations?

THE PRESIDENT: Well, Saddam Hussein has been in defiance of the United Nations since the end of the Gulf War. That's why we have a system of sanctions on him. And I am willing to maintain the sanctions as long as he does not comply with the resolutions.

If you're asking me are there other options that I might consider taking under certain circumstances, I wouldn't rule out anything -- I never have and I won't. But I think it's important the that you remember, since the end of the Gulf War, the world community has known that he was interested in not only rebuilding his conventional military authority, but that he was interested in weapons of mass destruction. And a set of sanctions was imposed on him. There are those that would like to lift the sanctions. I am not among them. I am not in favor of lifting sanctions until he complies. Furthermore, if there is further obstruction from the mission -- the United Nations' mission in doing its job, we have to consider other options.

But, keep in mind, he has not come out, as some people have suggested, ahead on this last confrontation, because now that world community is much less likely to vote to lift any sanctions on him that will enable him to rebuild his military apparatus and continue to oppress his people and threaten his neighbors and others in the world.

So that's my position on that. I feel that we have to be very firm; that it's clear to me that he has still not come to terms with his obligations to the international community to open all sites to inspection. We need to wait until Mr. Butler gets back, make a full report, and see where we are and where we go. But this is something that we are following on a -- I and my administration are following on a daily basis and very closely. And the United States must remain steadfast in this. But we now have more people who are more sympathetic with being firm than we did before he provoked, needlessly, the last incident.

Q Mr. President, reports from the front lines of your Race Initiative suggest that the initiative is in chaos, it is confused. The Akron town meeting was a little more than presidential Oprah. Some people involved are beginning to --

THE PRESIDENT: That may be your editorial comment. That's not my reports. I've received scores of letters, including letters from ordinary people who said that they loved it and they thought it was important. So if that's your opinion, state your opinion. But --

Q It's an opinion, sir, that I'm hearing from others who are beginning to question whether simply talking --

THE PRESIDENT: Who are they? Name one. Just one. Give me a name. All this "other" stuff -- you know, it's confusing to the American people when they hear all these anonymous sources flying around.

Q I don't want them to get fired by you, sir, so -- (laughter) -- but they are people who are involved in the process who are beginning to question whether simply talking is enough. Some of them are saying there needs to be more policy. But just talking about an issue doesn't take it very far.

THE PRESIDENT: First of all, there has been policy. Keep in mind, we're trying to do four things here. We're trying to identify policies that we need to implement, and do them -- from as basic a thing as finally getting the Congress to adequately fund the Equal Employment Opportunity Commission, to the scholarship proposal I made to help to pay people's expenses to college if they'll agree to teach in under-served areas that are predominately minority areas in the country, to Secretary Cuomo's recent initiatives on discrimination in public housing. And I have said there will be more. So the suggestion that there have been no policies in an inaccurate one. There have been policies, and there will be more --first.

Second, many people have told me they think perhaps the most important thing we can do is to get out the practices that are working in communities that are working. That's one of the reasons we went to Akron. And we have had many, many people access -- hundreds and hundreds of people access the web site that we set up for promising practices in the communities that work.

Third, we're trying to enlist new leaders. I sent a letter to 25,000 student leaders the other day asking them to take specific personal responsibility for doing something. We're getting about 100 letters a day back in response from them, saying what they're going to do.

Fourthly, I believe talking is better than fighting. And I believe when people don't talk and communicate and understand, their fears, their ignorance, and their problems are more likely to fester. I think that's one of the reasons that what you do is often just as important in our society as what decision-makers do, because people have to have information, they have to have understanding.

Keep in mind, this is the first time -- as I said in my opening statement, this is the first time ever that our country has tried to deal with its racial divergence in the absence of a crisis. We don't have a civil war. We don't have the aftermath of civil war. We don't have big fights over Jim Crow. We don't have riots in the streets. We have a country that is emerging as an ever-more divergent, diverse democracy.

In the next couple of days, the Racial Advisory Board is going out to Fairfax County, Virginia, with people of different views, including Secretary Bill Bennett, former Secretary of Education, to sit down in Fairfax County, see what they're doing in their schools, how they're dealing with this, and whether there are any lessons there that we can learn for the rest of the country.

So I believe we are on track. I believe that the kinds of criticisms that this board has received were inevitable once we decided to undertake this endeavor in the absence of a crisis, in the absence of building support for some single bill, like an open housing bill, a voting rights act, an omnibus civil rights act. But I think it is working, and I think it is taking shape, and I believe it's got clear direction, and I think you will see better results as we go forward.

So that's the only reason I ask you the specifics. I think it's very hard for me to shadow box with people if I don't know specifically what they're saying. You can always make these sort of general statements -- but I'm very upbeat about this commission. I felt great about the Akron town hall meeting.

And one of the things that I think we ought to do more of, however, following up on the Akron meeting, is to get people who have different views about real issues that are before the country and to try to see them talk together. I'm going to have a meeting with people who have been labeled and perhaps self-styled conservatives on a lot of the issues surrounding the civil rights debates in America today in the next few days. I'm very much looking forward to that. But what we really need to do is to get people talking across the lines that divide them. And I hope we can do more of that. But I believe that there is an intrinsic value to this kind of discussion.


Q Mr. President, speaking of what will happen in 1998, some lawmakers are talking about giving Americans a tax cut next year, but there is a separate issue of fundamental tax reform -- that is, changing the tax code to a flat tax or national sales tax or a greatly simplified progressive tax. Do you believe that the time has come to seriously consider fundamental tax reform?

THE PRESIDENT: You actually mentioned two things, so let me try to respond to both of them. First of all, on the whole tax cut front, there has been some talk about that by some lawmakers who say that now we have a surplus and, therefore, we should spend it, in part, at least, with a tax cut. And by that they mean one of two things. They mean we have a projected surplus at the end of this budget period, or they mean that the deficit is lower now than it was projected to be last August when I signed the balanced budget bill.

But it's important that the American people understand we don't have a surplus yet. We have a deficit that's over 90 percent smaller than it was when I took office. It was at $290 billion, and now it's at $23 billion. That is not a surplus. This economy is the strongest it's been in a generation because of the discipline that we've been able to bring to the task of bringing the deficit down and getting our house in order. We should not lightly abandon that discipline. The most important thing the American people need is a strong economy with good jobs and now rising incomes for all income groups. We've worked very hard to reverse 20 years on that and we need to stay at that task.

Now, the second question, should the tax code be simplified and should the system work better for ordinary Americans? On an elemental level, of course, it should. Let me remind you that we have a bill which passed the House with overwhelming support -- I think there were only three or four votes against it -- that is now in the Senate, that will further unshackle, if you will, the American people from any potential abuses by the IRS and make the system more accessible and fair for them. So I would urge the Senate to pass that bill.

Now, let's go to some of the more ambitious schemes. I would not rule out a further substantial action to simplify the tax code. But I will evaluate any proposal, including any one that our people might be working on, by the following critieria: First of all, is it fiscally responsible. Secondly, is it fair to all Americans. That is, we don't want to shift the burden to middle class taxpayers, to lower income taxes on upper-income people. We did that for 12 years and it didn't work out very well. And we have reversed that and we don't want to start that all over again. Thirdly, will it be good for the economy. And, fourthly, will it actually lead to a simpler tax system.

Now, within those parameters, any proposals that meet those criteria I think I am duty bound to consider supporting and I would consider supporting them.


Q Mr. President, a few weeks ago the Prime Minister of Israel, Benjamin Netanyahu, was in the United States and you and he were in Los Angeles at exactly the same time; in fact, your planes were both on the tarmac at LAX as you were getting ready to leave. But you refused to meet with him. He later said in an interview that you, in effect, were not only snubbing him, but you were humiliating or embarrassing the state of Israel, the people of Israel. I wonder if you'd care to respond to that, and why didn't you meet with Prime Minister Netanyahu? This is the first time in my memory that an Israeli Prime Minister was in the United States and did not get a meeting with the President of the United States.

THE PRESIDENT: Well, first of all, let's put the record straight here. Mr. Netanyahu has been in office only a year and a half, and we have had five meetings. I don't believe I have ever met with any other world leader five times within an 18-month period. So there can be no serious suggestion that the United States is not interested in the peace process or respectful of the people and government of Israel. We have had five meetings.

Secondly, I expect that we will have a meeting early next year, a sixth meeting, to discuss where we are and where we're going. Secretary Albright was slated to meet with and did meet with Mr. Netanyahu to talk about what the next steps were. I think it is important when the President meets on the peace process that it be a real meeting and that there be some understanding of where we are and where we're going and what we're doing together. And I have always taken that position.

So there was no -- you never heard, I don't believe, me say anything about some sort of calculated decision to snub the people of Israel or the government of Israel. I simply wouldn't do that.

Q Mr. President, would you support the resegregation of the sexes in the military? And wouldn't that send a message to women that they cannot benefit from equal opportunity in the Armed Forces?

THE PRESIDENT: Well, I think you must be referring to the report issued by Senator Kassebaum and her -- Senator Kassebaum-Baker and her committee today. I have not had a chance to review the report. I did read the press reports on it this morning. I'm not sure exactly what their recommendations are. I can say this. It's a group of eminent Americans; I think they looked at a difficult question. I'm not sure they recommended a total resegregation of the military.

What I would be very reluctant to do is to embrace anything that denied women the opportunity to serve in positions for which they are qualified, and to progress up the ladder of promotion in the way that so many have worked so hard to permit them to do in the last few years.

Now, within those parameters, if there is something that they feel strongly ought to be done in the training regime or in the housing regime because of the problems that we have seen in the military in the last couple of years, I think we ought to entertain it. And I think within those limits, that ought to be largely a decision left to our military commanders upon serious review of the report.

But I don't think -- I doubt that the committee wants to do anything to deny women the opportunity to serve or to gain appropriate promotions, and so I'm not accusing them of that. I'm just saying that we would be my framework within which to evaluate this.

Mara, and then Peter. Go ahead.

Q Mr. President, a question about Iran. You said this week you were looking forward to an honest dialogue with Iran. Can you tell us how and when that dialogue might begin? And also, given that the United States has not been able to enlist a single other country to help us in our effort to isolate Iran economically in joining the embargo, do you still that policy is effective, or are you willing to rethink it?

THE PRESIDENT: Let me answer the questions in order, but in reverse order. On our embargo, I think it is right thing to do. And it will have varying degrees of effectiveness depending upon how much other people are willing to work with us, but I think that the voters in Iran, when they made the selection of the current president seemed to be sending a signal that they wanted a more open society. And I was quite encouraged by his remarks. So that I'm not sure you can say that our policy has been in error. I certainly think it is right, whether it is supported or not.

Now, going to your first question. We are, all of us, discussing about how to proceed now. No decision has been made. But I have always said from the beginning that I thought it was tragic that the United States was separated from the people of Iran. It's a country with a great history that at various times has been quite close to the United States. We have had the privilege of educating a number of people from Iran over several decades; indeed, some people in the present government were able to get some of their education in the United States. And Americans have been greatly enriched by Iranian, by Persian culture, from the beginning of our country.

We have three issues that we think have to be discussed in the context of any comprehensive discussion. The first relates to Iranian support of terrorist activities, with which we strongly disagree. The second relates to Iranian opposition to the peace process in the Middle East, with which we disagree. And the third relates to polices involving the development of weapons of mass destruction. I think we have to be able to discuss those things in order to have an honest dialogue, just like we have an honest dialogue with China now. We don't have to agree on everything, but people have to be able to have an honest discussion, even when they disagree.

And in terms of terrorism, I think the United States must maintain an uncompromising stand there. We would not expect any Islamic state, in effect, to say it had no opinions on issues involving what it would take to have a just and lasting peace settlement in the Middle East. We would never ask any country to give up its opinions on that. But we would ask every country to give up the support, the training, the arming, the financing of terrorism.

If you look at the world that we're living in and the one toward which we are going, if the look at the torments that many Americans underwent in the 1980s because of terrorist activities, our uncompromising position on that I think is clearly the right one, and we shouldn't abandon that, and we must not, and we won't.

But do I hope that there will be some conditions under which this dialogue can resume? I certainly do.


Q Mr. President, I'd like to go back to the earlier question on Bosnia. You're obviously laying the groundwork for an extended stay for U.S. troops there. What kind of a mandate do you envision for the that mission? And what type of military and financial responsibility do you hope that the European allies will agree to in this follow-on effort?

THE PRESIDENT: Well, of course, that is all part of our discussions now both with our allies and with the members of Congress, and I don't want to truncate the discussions. What I want to do is to see that the peace process continues. I think one of the things that all of our military people agree on is that we must do more to beef up the civilian police there; and that there must be a distinction between what we expect our military leaders to do and what we expect the civilian police to do; and that the mission must be, if there is to be a mission after the SFOR mission expires, it also must have clear, objective components with some way of knowing whether the mission has been achieved or not.

In other words, I still don't believe that there should be anybody interested in some kind of a permanent stationing of global military presence all over Bosnia. But I do think that these are all elements that have to be discussed. And, as I said, I hope to be able to tell you more about this before I leave on my trip in a few days.


Q Mr. President, as the national dialogue on race gains momentum, the one-year anniversary seems to near, and how are you going to pull apart the issue of race reconciliation and affirmative action that seems to be crossed-tied? And will you extend the Race Initiative beyond this year, to the end of your term?

THE PRESIDENT: Well, in some sense, this whole initiative has been a part of my administration from the beginning, because it permeates so much else of what we try to do and what we're trying to do.

With regard to affirmative action, I think that's an ongoing process. My reading of the Supreme Court's decision not to hear the Court of Appeals ruling the that California vote abolishing affirmative action was, in fact, not unconstitutional, that it was permissible for the voters to vote in the way that they did under the Constitution -- my reading of the Supreme Court's decision there is that they were saying that we're going to allow this matter to be resolved in the political process -- that is, that affirmative acts of discrimination are illegal; what should be done to root out the vestiges of discrimination or to create a society in which people have more or less the same chance to succeed without regard to their racial background must be resolved in the political arena.

As you know, there was a different decision made by the voters of Houston recently, in a vote on affirmative action.

So what I would like to see done is to move beyond the I'm-for-it and you're-against-it stage to a more sophisticated and, ultimately, more meaningful debate to the American people, which is, if you don't like the way California used to admit people to its colleges and universities, what would you do to make sure that you didn't exclude whole groups who happen to be predominantly of racial minorities, but also happen to be predominantly poor, predominantly from difficult neighborhoods, predominantly born into families without the kinds of advantages as many other children have. What are we going to do? And that debate is, I would suggest to you, in its infancy. But there are a lot of people who are trying to contribute to that debate.

I noticed there was an interesting set of Op-Ed pieces in one of our papers recently, one by Chris Edley, who used to work for us, essentially defending affirmative action, but pointing out some of the problems within it; and another one by Glenn Laury, who's normally viewed as a conservative intellectual, who said that he thought in some cases there was still some room for it, but there were a lot of other things which ought to be done which might make an even bigger difference.

Let me give you a problem, this is one that I think about all the time. Most people believe that our affirmative action program in the United States Army has worked quite well. It's clearly not a quota and clearly no one is given a position for which they are not qualified, but there is an intensive effort to qualify people so that in each promotion pool, the pool of applicants for the next rank roughly reflects the racial composition of the people in the next lowest rank.

Now, if you try to draw a parallel from that to where we are in our colleges and universities, what is the breakdown? The breakdown, it would almost be as if -- people are in kindergarten through 12th grade over here in this system, and then they go to college or graduate school over in this system, over here. It's almost as if the Army were divided so that one group of people was responsible for training everybody from private through captain and everybody else, and a whole different group were responsible for training and picking everybody from major through four-star general.

Is there something we can learn from the way the military does that? Should the universities be more involved, for example, in a more systematic way in identifying candidates who may not have the academic background that will give them a high score on a SAT test, but whose probability of success in college is very, very high indeed early on, in doing more for them so that they can get there. Is this the sort of affirmative action that would be widely supported by the American people.

I really believe that these debates really turn more on how the -- in these initiatives -- turn more on how the initiative is described as opposed to what the problem is and whether we can reach agreement on how to solve it. So we may not get this done by next June. And if that's not done, that's something that has to continue. We have to continue to work on that until we reach a reasoned resolution of it.

Q Mr. President, you said earlier, getting back to the Middle East peace process, you said that if you met with the Prime Minister it should be with an understanding of the direction that the peace process is going -- forgive me if those aren't your exact words. Did you mean to suggest that there is no understanding of the direction that the peace process is taking?

THE PRESIDENT: No, I didn't mean that at all. But what I mean is I think the next time we meet we are likely to have a productive meeting because we'll have a lot to talk about because a lot of work has been done. Secretary Albright has been out there to the region; she's been meeting with Prime Minister Netanyahu in Europe. The Netanyahu Cabinet has taken a decision on redeployment, which they're attempting to flesh out and define at this moment. And, as you know, there's a lot of controversy within the government in Israel about what next steps ought to be taken in the peace process.

The only point I made is I think the next time we meet we'll have quite a meaty agenda, we'll have something to talk about and something to do. I'm not suggesting that there is some standard that the government or the Prime Minister has to meet in order to have a meeting, but I think that it will be a useful meeting and it's an appropriate thing to do.

Sarah, go ahead.

Q This is about Vice President Albert Gore. He apparently is your heir apparent and he's been very loyal to you. But he seems to be the target of a nationally, well-organized campaign on the part of Democrats and Republicans to knock him out and fix it so that he will be so scandalized that he can't even run for president after you're gone. Now, what do you think about the way these people are acting, especially the Democrats? (Laughter.)

THE PRESIDENT: Well, I think anybody that wants to run for president has a perfect right to do so. And if anybody wants to run and believes they have a unique contribution to make and has the passion and the pain threshold to do it, I'd be the last one to tell them not to.

What I would say among all the Democrats is that there's plenty of time for presidential politics -- I would say that to the Republicans as well -- and that the most important thing now is that we show the people we can make progress on the problems of the country and on the promise of the country.

As for the Vice President, himself, he needs no defense from me. I have simply said, and I will say again what every knows. He's had the most full partnership with the President of any Vice President in history and he has performed superbly. Whether it was on the environment, or on energy initiatives, or on helping us downsize the government by 300,000 and increase the government's output, or on the foreign policy issues like Russia and South Africa, he has done a superb job. And I'm proud of that and I appreciate it. And I think that we've accomplished more for the American people because of it.

Q Mr. President, many analysts suggest that the Attorney General finding legitimizes making telephone calls for soft money from the White House. Given that, and given the troubles that the Democratic Party faces, the financial troubles, do you have any plans to make more such telephone calls and, if not, why not?

THE PRESIDENT: I believe that I spoke to this earlier, but let me try to restate it. I think the most effective thing for me to do when raising money is to meet with people in small groups and tell them what I think should be done, and I prefer that to just making phone calls. I also think it gives people who contribute to the Democratic Party the sense that they are part of an administration and part of a process that stands for some ideas -- so you're not just calling people for money, you're also listening to what they think should be done. And I think that's more fruitful and more productive.

But I do expect to continue to try to help our party, our candidates for Senate, our candidates for the House and our candidates for governor, to raise funds in the 1998 elections. I hope before I leave office, however, that my successor of whatever party, and all others, will be living under a different campaign finance reform system which will be better for the American people and much better for the people in public life.

Go ahead.

Q Mr. President, the Attorney General has rendered her judgment, and the FBI Director has dissented from that judgment as to the appointment of a special counsel. On several occasions your spokesman has declined to express full confidence in the FBI director. Have you lost confidence in Director Freeh? Is it because of his dissent, and is that fair, sir?

THE PRESIDENT: First of all, his decision to dissent in that case has no effect on whatever opinion I have of him. I think he should be -- I think that -- the Attorney General runs the Justice Department the way I try to run the White House, which is, I want to hear what people's opinions are.

But on this confidence business, I think there has been too much back-and-forth on that, and I don't want to get into it. What I have confidence in is that if we all work on trying to make the American people safer and continue to try to drive the crime rate down and solve crime problems, the American people will feel that they're getting out of all of us what they paid for and what they expect from us. And that's what I think we should be doing. I don't think we should -- I don't think it's a very fruitful thing to try to keep spinning that around.

Yes, George.

Q Mr. President, just to follow up a little bit on what you said about the Democratic Party -- since you became President, the Democrats have lost both Houses of Congress, more than a dozen governorships, and has gone broke. Now you have Congressman Gephardt saying he wants to steer the party in a more liberal direction. First off, do you feel at all personally responsible for the state of the party today? And secondly, is there anything you plan to do take the challenge of Congressman Gephardt to keep the party on a more centrist course after you leave office?

THE PRESIDENT: Well, I don't know what I'm going to do when I leave office, and I don't think I should spend much time thinking about it. I think I should spend my time thinking about what I can do in the next three years and two months to leave America in the best possible shape for a new century, so I'm not going to think about it very much.

Secondly, I think the Democratic Party's financial problems are due almost entirely to the legal bills it incurred with a lot of very vigorous help from the Republican congressional committee. So it is obviously part of the strategy and it's worked to some extent. And I've worked very hard this year to try to keep it from bankrupting the party.

Now, we did well in the elections of '92, the congressional elections, and we did pretty well in the elections of '96. The governorships I think tend not to be so identified with national party trends as the Senate and House. I feel badly about what happened in '94. I think only partly it was due to the fact -- several things -- there were three big factors, I think.

One is, the Republicans successfully argued that we had a tax increase in the '93 budget for ordinary Americans, and that simply wasn't so. The income tax went up on 1.5 percent of the people. Secondly, they scared a lot of people in districts where you had a lot of rural gun owners into believing we were taking their guns away when we weren't, with the Brady Bill and the assault weapons ban. And thirdly, they were able to, with the help of a massive campaign by private industry, to convince people we wanted the government to take over the health care system, which we didn't.

I would just remind you to look at history there -- the last time that happened was when Harry Truman went from 80 percent approval on the day after he dropped the bomb ending World War II, in effect, down to about 38 percent approval because he tried to provide health insurance coverage to all Americans, with the same consequence in the midterm election. So I feel -- I'm sorry that happened, and I hope that will have more skills and more ability coming up in this midterm election. If we have a clear position, I think we'll be fine.

Now, in terms of the debate with Congressman Gephardt, let me just say, I think that it's easy to overstate that -- which is not to say that I trivialize it -- but let's look at the issue here. First of all, we were together when we passed that economic plan in 1993 without a single vote from anybody in the other party, and it reduced the deficit by 90 percent before the balanced budget bill passed. So we were together and I think we were both right. We were together on the crime bill, and we were together on trying to do something about the health care needs of all Americans.

And I think the left-right issue is a little bit misstated. We have a difference of opinion on trade, but I think it's important to articulate what the difference is. I believe strongly that selling more products around the world is a precondition to maintaining are standard of living and growing jobs, for the simple reason, as I have said repeatedly, we have 4 percent of the world's population and 20 percent of the world's wealth; and the developing countries will grow three times as rapidly as the developed countries in the next 10 years. Therefore, if you want to keep your income, you've got to sell more to the other 96 percent, especially those that are growing fast.

However, I agree with him, and it was our administration and our campaign in '92, that explicitly made a national priority of trying to do, in addition to expanding trade, in the process of expanding trade, at least not to diminish environmental standards, to raise them were possible, and to try to lift the labor standards of people around the world.

Our difference about fast track was a difference about how much that could be mandated in the process of giving the President the authority to negotiate trade. And I would argue that that is no different than a lot of the differences that exist within the Republican Party today over issues that are potentially far more explosive.

The second thing I'd like to say is, I consider the real obligation here, over and above that, in the trade area is to do what is necessary to make more winners, which is to trade more, but to develop a public response from our government where we can do more and do it more quickly to help the people that are displaced from the global economy, or from technology or from anything else.

We have doubled funds invested for displaced workers since I've been President, while we were reducing the deficit. We have doubled funds. But we need to do more, and I am now in the process of working with the Secretary of Labor and others to set up a model which will enable us to help communities that are hurt by trade dislocation or plant closings for other reasons to basically operate the way we did with communities that lost military bases because they had a big hit.

So I don't believe any advanced country can say with a straight face and a clear conscience that it has done everything possible to help those that are losing in the modern economy, that are rendered more insecure in the modern economy because of the industries they work in or because they have low levels of skills. And until we have a comprehensive lifetime system of education and training and an investment strategy that works in those communities, we have to keep working on it.

So to that extent, if that's the debate we're having in the Democratic Party about how to get that done, that is a good thing to do. Because our party cares about the people who lose, as well as trying to make more winners. That's always been our burden, our obligation, our responsibility. It's a part of our conscience about who we are. And I think that's a healthy debate. But it's not a debate that's going to split this party in 1998, because basically both factions, if you will, of our party, agree that we should do both -- we should trade more and we should do more to help people around the world with environmental and labor problems, and to help people here at home that are being left behind.

All I want to do is keep it in a policy-oriented, positive context, and I'm going to do what I can to get that done.

Yes, in the back. Go ahead.

Q Mr. President, about a year ago you first voiced your vision and your thoughts about the District of Columbia and where we ought to be going. And since then, frankly, you've been very active. You worked with the Congress to get a legislative plan passed that calls for financial recovery and restructuring. And yet the city leaders are criticizing you. They say you haven't done enough. They apparently expected something at your church service, even though ahead of time you said, in effect, not to expect that much. My question to you is, how do you respond to this kind of criticism, and what kind of thoughts might you have on the future, from taxes, commuter taxes -- anything like that that you might be thinking about in response?

THE PRESIDENT: Well, first, if you go back to Mr. Donvan's question or any other, it's almost a citizen responsibility to criticize the President. Why be an American if you can't criticize the President? (Laughter.)

But, secondly, the District of Columbia I think has a lot of accumulated frustration. The people who live here, who have put their roots down here love this city deeply. They see folks like me come and go, have our roots elsewhere. But there really is, with all the problems in the District of Columbia, there is a passionate love for it among the people who have lived here. And I want to see that love redeemed, and I want this city to be something, a place that every single American can be truly proud of. But I can't do everything that everybody in the city wants me to do as soon as they want me to do it.

Furthermore, there are some things that will have to be done by people here themselves. Folks here want more home rule. There were people in our meeting, our leaders meeting who want more home rule. They would like to see an elected official represented on the Control Board, for example. But with more freedom comes more responsibility. And actions must be taken to restore the confidence of the people of the District of Columbia in the school systems -- not just in some schools, not just in teachers; in the school system. Action must be taken to restore the confidence of the people of the District of Columbia in law enforcement generally -- not just in some precincts or some police officers; but in law enforcement generally.

We know now -- we know now from schools I could show you in the District of Columbia, that urban schools with poor children in difficult neighborhoods can perform at high levels. Every school has to be able to perform that way. We know now that in urban environments with very difficult circumstances, children can be made safe and crime can be made low, and that ought to be done here in the District of Columbia.

I will do everything I can to help. There is more that the federal government can do. But we have to do it in partnership. So I would say to the people who are frustrated with me, keep on pushing. Push me, push the Congress, push the federal government. There is more to do. But in the end a city is formed and made by the people who live in it and shape its life day in and day out. I want to be a good partner. I don't mind the fact that some people with greater ambitions are still disappointed even though we've done very sweeping things, but there still hast to be a lot more done here as well.

Q Mr. President, if I could follow up on the question about Iran. You mentioned in your answer to Mara concerns about terrorism, and one of the specific concerns with respect to Iran and terrorism is that they might be involved with Khobar Towers. Is your hope for improved dialogue -- is there any prospect for that if it's shown that Iran was involved with that bombing? And also, could you give us your understanding of the status of that investigation? Many family members, understandably, frustrated by the progress, or the seeming lack of public progress so far.

THE PRESIDENT: I think it better to answer the question without answering the first because I don't think it's worth having a hypothetical question -- if I give an answer to that hypothetical question, it will imply that I think I know what the answer is, and I don't.

I share the frustration of the families. Here is a case where I believe that Mr. Freeh and the FBI have worked hard to try to get an answer. We have tried to work in cooperation with the Saudis, as we had to since the crime occurred, the murder occurred in their country. And we are not in a position at this time -- all I can tell you is the investigation is ongoing and we are not in a position at this time to answer definitively your question, which is, who was behind this, who did it all, who contemplated it, who funded it, who trained, who facilitated it. I wish I could answer that question.

When we know the answer to that question, then there will be a range of things that are appropriate to do when we know the answer. And for the family members, it grieves me that we don't. But we don't know the answer yet.

Q Mr. President, -- 1997 a year -- you're doing a great job. And also you have done a great service to America by appointing Mr. Lee to the Civil Rights Division post. The last time at the White House press conference you renewed your call that you are going to India and Pakistan. But since things have changed in those two countries. The Pakistan President was forced to resign and the Prime Minister of India was also forced to resign. Now, despite all these political changes in India and Pakistan, are you still renewing your call going to the region?

THE PRESIDENT: Absolutely. First of all, let me say the United States has an enormous national interest in having greater positive involvement with all of South Asia -- with India, with Pakistan, with Bangladesh, the other countries in the region. India already has the world's biggest middle class. Pakistan has had historic alliances with the United States. There are difficulties in each country which make it difficult for us to resolve everything and to have every kind of relationship we'd like to have.

But I still intend to go there next year. I have not set a time for when I will go, and I think I have to be sensitive, among other things, to the India election schedule. But both countries are now celebrating their 50th anniversary of independence, and I think that it's quite appropriate for the President of the United States to be there.

Q To follow up -- I'm sorry -- also India is the world's largest democracy and U.S. is the world's richest democracy, and also China is the world's largest communist country. And this triangle you are also visiting India and also to China. So where do you fit all these largest democracies and communist countries?

THE PRESIDENT: Well, in the Cold War our relationship with India was sometimes complicated because the tensions between India and China led to relations between India and the Soviet Union, which made difficult relations between India and the United States. The last thing I want to do is to replay that in a different context with regard to China and India. What I'm trying to do is to develop constructive relationships with both of them and hope that they will have constructive relationships with each other, so the world will move together toward more peace, more prosperity, and ultimately, in countries which don't have it, more personal freedom.


MR. MCCURRY: Penultimate question. (Laughter.)

THE PRESIDENT: We're having a good time.

MR. MCCURRY: All right. (Laughter.)

Q Mr. President, the polls show that people support affirmative action, but not when it's known as racial preference. How do you get around this clash of language? And what do you think about the term "racial preference"? Is it a proper one?

THE PRESIDENT: I think people support affirmative action when you describe it, and then if you call it "racial preference" they don't support it because the words themselves seem to inevitably mean that someone will get something because of his or her race for which he or she is not really qualified.

Now, the problem, if you back off from that is, that we Americans believe in three things. We believe that the best qualified people ought to get what they're best qualified for. We believe everybody ought to have a chance. And we believe people that have had a hard time ought to have a hand up. If you took a survey, I believe over 80 percent of the people would say that. We believe that merit should prevail over pull, if you will, or privilege. We believe that everyone should have a chance. And we believe that people who have had a hard time ought to have a hand up.

The problem is when you try to translate those three principles, if you have a label that can be affixed to your efforts that is consistent with those principles, people say, yes, do it. If the label seems to be contradictory to those, they say, no, don't do it. And what really matter is, what are you doing and is it working?

There are a lot of problems. For example, in college admissions -- let's just take college admissions. It's something I think I know quite a bit about. I wasn't thinking about Chelsea at the time. (Laughter.) I mean, I used to teach in a college; I used to deal with admissions policies. I've thought about this a lot. The whole premise on which affirmative action is being attacked is that there really is a totally objective, realistic way you can predict success in college and right to go to college and capacity to learn in college based on your high school grades and your SAT scores.

And yet, we know -- if you forget about race altogether, that grading systems in some high schools are very different from others, and that the work done in the courses in some schools at the same period of time are different from those in others. Furthermore, we know that performance on the SAT scores is not a perfect predictor of capacity to learn and capacity performed in college because there are some people that just won't do as well because of the experiences they've had, but they're capable if given the chance of making a huge leap in college. And you can see that in the sterling careers and performance that has been established by many people who got admitted to either college or professional schools through affirmative action programs.

That is why I say I honestly believe that it's going to be difficult to finally resolve all this at the ballot box if voters are coming in and it's a question of which label wins. I thought it was interesting in Houston that the pro-affirmative action position won I think in no small measure because it was a city where people knew each other, they probably had a greater familiarity with how the programs worked, and they understood what their elected leaders were saying perhaps better than the bigger -- the electorate is. And the further away more voters are from the actual decisions that are being made, the more vulnerable they may be to the way -- the general characterizations.

And that's what -- one of the things I think that we should be charged with in this racial dialogue is maybe something that will blend talk and action which is, how can we overcome this, how can we get beyond the labeling to how the real world works. See, I honestly believe -- let's -- I honestly believe that if every kid in this country had the right kind of preparation and a hand up where needed, enough in advance, and the right sort of support, and you had a realistic set of criteria for letting people into college, that there would not be much racial disparity in who got into which institutions.

I honestly believe, furthermore, in the economic area it's even more complex. You know, when people get into business and when they get bank loans and when they get training to do certain things, it has so much to do with the whole fabric of contacts people have and what they know and what experiences they've had -- which is why I've supported a lot of these economic affirmative action programs.

My whole idea is that we have to reach a point in this country where there is a critical mass of people in all neighborhoods from all backgrounds that have had enough business contacts, business experience, and have enough credibility with financial institutions, for example, to be able to do business and compete on equal terms. And I don't think we're there yet.

So I'm hoping -- I haven't given you a clear answer because it's not a clear problem. If we get down to slogans, you have no better than a 50-50 chance of seeing any kind of affirmative effort prevail. If you get down to brass tacks, I think people in both parties, of good faith, what they want is a society where everybody who needs it gets a hand up, everybody has got a fair chance, but where unfair criteria don't deprive the deserving at the expense -- to the benefit of the undeserving. We can get there if we'll move beyond the slogan to keep refining these programs and maybe even extending our efforts to help more people in their earlier years and to help more people in these disadvantaged communities. That's what our whole empowerment concept is all about.

Q As you know, the Pentagon is going to vaccinate every member of the armed services against anthrax. A two-part question on that. One, as Commander in Chief, will you be vaccinated? (Laughter.) And, second, Secretary Cohen made a quite vivid demonstration not long ago on TV that a primary threat of anthrax is a terrorist attack against a civilian population. Should civilians be vaccinated against anthrax?

THE PRESIDENT: I do not think that's called for at this time. I couldn't recommend that. But I will say this. I gave a directive to the Pentagon on forced protection because I felt that it was more likely that over the next 20 to 30 years we might be in settings with our forces in other countries where they might be exposed to chemical or biological weapons. This instruction grows out of that directive I gave to the Pentagon. I think it is appropriate and I will support it. Also, keep in mind, the anthrax vaccine is fairly well-known and widely administered to people who deal with animals which might have been infected with anthrax. So we don't believe this presents any significant risk to our men and women in uniform.

Now, having said that, at this time I know of no expert opinion that would say that those of us that are essentially in the civilian population in the United States should be vaccinated. I don't think the evidence is there that would support that kind of recommendation.

Q Mr. President, you mentioned somewhat skeptically that Republicans in Congress are talking again about new tax cuts on top of those that you and they agreed to this year. But you get the first word on next year's agenda in your State of the Union and in the budget. What tax cuts might you call for? And, in particular, what do you think of the Republicans idea of doing away with the marriage penalty?

THE PRESIDENT: Well, I do get the first word in the State of the Union and I hope you will all watch it, because there will be a lot of things in there.

I can't say at this time that I will have anything to say about tax cuts in the State of the Union. Keep in mind, we have worked so hard to make this country work again, and we need to be looking to the future and our long-term challenges now. And we cannot break the connection of progress between making the country work again and looking to the future by basically losing our discipline and our concentration and giving in to the easy answers.

So we don't have a surplus yet. And I don't know that anyone's talking about paying for tax cuts with some other sort of program cut or some other sort of tax increase. So I have reached no decision about that and I'm not entirely sure that I will.

Now, on principle, I don't like the marriage penalty -- on principle. I don't think any American could. I think that -- you know, whether it's the Family and Medical Leave Act or the $500 children's tax credit or the adoption tax credit, I have been firmly committed to supporting policies which would both strengthen families and strengthen work, and help people reconcile the balance between the two. And the so-called marriage penalty is, I think, not defensible under those circumstances.

On the other hand, it's like every other tax cut -- there are a lot of tax cuts that might be desirable, but how would you pay for them, how would you not increase the deficit, how would you keep the budget moving toward balance? Even married couples paying an otherwise unfair rate of tax because they're married are better off, first and foremost, with a strong economy. And most of those married couples will now be able to take advantage of the children's tax credit, the education tax cuts and the other changes which have been made in America to have a better life. So that's the first and sort of bottom line for me.


Q You touched on college admissions. And very early this year you said you were quite concerned that some American universities -- public universities in Texas and California, in particular -- were going to become resegregated, and you vowed to come up with some sort of plan to counter that. Have you come up with a plan and could you share it with us?

THE PRESIDENT: Well, what I said was that I wanted to look at what the alternatives were. Texas has now adopted an alternative which I think will work apparently quite well for them for undergraduate schools, which is simply to say that the top 10 percent of every high school graduating class in Texas is eligible for admission to any public institution of higher education in Texas. But I think if you look at it, while I think it is an acceptable alternative, the critics will argue it's simply affirmative action in another form. But at least that -- but it's a way of saying, look, high schools are different. But the ability of children is not unevenly distributed, so we're going to give them a chance. That may be one answer.

The other thing we're looking at is trying to support more college efforts in actually identifying young people in schools with the promise of going to college, who have a difficult situation, and trying to work with them over a period of a few years to make sure that when they come to take the college exams that they are fully prepared to do so and much more likely to succeed. You know, the military academy has a kind of a prep school like this, that enables people to apply for positions in our service academies with a greater prospect of success. So these are some of the things that I think we might do.

Let me say, are there any foreign journalists here? Since we're here, let me take a few questions from the international press corps, since we're in the State Department.

Q Thank you, Mr. President. On several occasions, sir, you mentioned that Mexico is the second most important partner and commercial partner to the United States. But it's been more than five months and there's not a U.S. Ambassador in Mexico. Are you considering any particular names right now, and by when you're going to announce with your nominee?

THE PRESIDENT: I expect to have a name quite soon, but I don't want to say the people I'm considering. I'll have a nominee and then I'll name it and I think it will be quite soon.

Q Mr. President, this is the first time in the last six years, I guess, that we don't know when you're going to go to Russia for the next meeting with President Yeltsin. Otherwise, we could say it was pretty easy before that. Is that the START II impasse in Duma, or something else?

THE PRESIDENT: Well, we have agreed, President Yeltsin and I, that we are going to meet again and that we will meet again in Russia. We think it would be better for me to go to Russia after the Duma ratifies START II because then we can work on START III. I think that's very important. And that's the sort of timetable we agreed to embrace.

I'm glad to see that the President, apparently, is getting over his little illness and I expect to see him back to work soon. And I hope and believe the Duma will ratify START II. And when they do I'd like to go there and talk about START III, because for Russia it's very important in order that they not be in an unfair either security or economic position, that there not be much gap between the time START II is ratified and we agree on the broad terms of START III. And that's my personal commitment to the President, so I expect to be there shortly after START II is ratified.

Q Mr. President, on Bosnia, you mentioned that being there you're going to talk about responsibility. Sir, would you care to share with us how will you characterize responsibilities of Belgrade, Zagreb and Sarajevo in Bosnia among Bosnians and Serbs and Croats, and responsibilities of your own international community?

THE PRESIDENT: Well, I think that all of us should support the Dayton Accords, the Dayton process. It should do nothing to undermine it and do whatever we can to support it. Now, when the Croats, for example, supported the turning over of some Bosnian Croats who were indicted for war crimes recently, I thought that was a very positive thing.

Now, they'll all have difficult moments when it comes to relocation of people and to areas where they'll be the minority, and there are a lot of difficulties ahead. But Belgrade, Sarajevo and, of course, Zagreb, all of them have the responsibility to support Dayton. They said they'd support it; they signed off on it; and that's what they ought to do. It's a good framework and it will work if we all support it.

Q Mr. President, a feisty, 77-year-old Chicago American woman is said to be the first elected President in South America. From one American to another, do you have any words of wisdom to offer her? And just in case you're wondering where it is, it's in Georgetown, Guyana.

THE PRESIDENT: Excuse me, I'm sorry, what --

Q Georgetown, Guyana.

THE PRESIDENT: Oh, yes, I know. I couldn't hear what you said before. I think anybody with enough energy to get elected President at that age probably knows what to do. (Laughter.) And I'm very impressed. But I'll try to be a good ally and I hope we can work together.

Q Sir, General Xiong Guang Kai, the very high-level China's military officer who warned that U.S. better care about the safety of Los Angeles other than the safety of Taiwan, was in town last week and conducted so-called first defense consultative talks with U.S. -- I think the Under Secretary of Defense. By conducting such a meeting, does your government care more about Los Angeles now, or do you care both? I mean, regarding the security of Taiwan, I guess, in your press conference with President Jiang Zemin you urged that both sides of Taiwan Strait to resume their talk as soon as possible. Now it's been about five weeks already, and during the interlude you also met with President Jiang Zemin once. Do you think they're moving toward that direction under your advice, or not? If not, do you have any other suggestion?

THE PRESIDENT: Well, I know you didn't mean it that way, but the American President, of course, has to be concerned about the security of Los Angeles. They've endured earthquakes and fires and now El Nino -- (laughter) -- and they just keep going on. They're remarkable. So we're worried about them and we'll be there for them.

But I think the important thing that you understand is that nothing, nothing has changed in our position on the security of Taiwan. The whole framework of America's relations with China embodied in three communiques is that while we recognize one China, China makes a commitment to a peaceful resolution of the issues between itself and Taiwan. And we have always said that we would view a departure from that with the gravest possible concern. So you shouldn't be worried about that.

In terms of whether too much time has elapsed before the resumption of talks, I can't comment on that because I don't believe I know enough to make a judgment. But I would urge them to get together to keep working on it as soon as possible. Both places, they're just doing too well now, economically and otherwise, to risk their prosperity and their progress on a fight that need not occur and should not happen.

Q Yes, Andrea.

MR. MCCURRY: Mr. President, let's go home. (Laughter.)

THE PRESIDENT: My answers are too short today.

Q Mr. President, as you pointed out, it seems like maybe about a half-hour or 45 minutes ago -- (laughter) -- every time Saddam Hussein seems to be closing to winning, perhaps getting the U.N. sanctions eased, he does something that might be considered less than rational. As the Commander in Chief who has to weigh options that will inevitably affect the lives of young Americans, how do you assess your opponent? How do you assess Saddam Hussein? Is he less than rational and, not to put too fine a point on it, are you persuaded that he's not simply crazy?

THE PRESIDENT: Well, if he is, he's clever crazy on occasion, and then sometimes he does something that seems maddeningly stupid. In this case I think he made a calculated decision that was wrong. That is, I don't think this was -- I think there was a calculated decision here that other countries wanted to do business with him, that he owed money to other countries from before the Gulf War that he couldn't pay and never would be able to pay unless he could do more business, that the war is fading into memory -- you know, it's not imminent now, and that the burden of maintaining the sanctions had wearied many of those with responsibility for doing so, and that there might be a way to split the alliance here. I also think he knew that the suffering of the Iraqi people is something which has touched the hearts of the whole world, and he thought it was a card he could play.

So for all those reasons, I think that he thought this decision -- finally, I think that he thought, probably, that the United States would never vote to lift the sanctions on him no matter what he did. There are some people who believe that.

Now, I think he was dead wrong on virtually every point. But I don't know that it was a decision of a crazy person. I just think he badly miscalculated.

I will say again, we supported -- the United States initiated the oil for food and medicine resolution. I am glad -- I would support broadening it. I still don't think the caloric intake of the average Iraqi is sufficient. I'm worried about those kids. I'm worried about the people who are hurt over there.

But the biggest problem they've got is him. He delayed the implementation of the oil for food embargo for a year and a half to try to play on global sympathy for the suffering of his own people. So that's not an issue for me.

Furthermore, I have done everything I could not to have the American people overly personalize our relationship with him. To me it is a question of his actions. But I do believe that he has shown, whether you think it's madness or not, that he was willing to rain Scud missiles on Israel and use chemical warfare on the Iranians and on the Kurds. So whatever his motives are, I think it best serves the United States -- our interests, our values, and our role in the world -- to judge him by his actions and to insist that we proceed in return for substantive progress on concrete actions. I think that is the practically right thing to do and the morally right thing to do.

Yes, sir, in the back.

Q You take pride, understandably, in the expansion of NATO. But one member of NATO, Greece, is constantly being threatened by another member, Turkey. Is that an example for the other three countries coming in?

THE PRESIDENT: You mean the problems between Greece and Turkey?

Q Yes. And what's your role as the leader of the superpower in the world to help two members solve their problems? The European leaders this weekend called upon Turkey to accept the countenance of the International Court of Justice. You're meeting Turkish Prime Minister Yilmaz on Friday. Are you going to talk about that?

THE PRESIDENT: Yes, we are going to talk about that. The problems between Greece and Turkey, and the decisions taken by the EU with regard to Turkey, it seems to me to point to two objectives that the American people should care very much about as we move toward a new century.

First of all, I think it is very important that we do everything reasonable to anchor Turkey to the West. They are a secular Islamic government that has been a dependable ally in NATO. They have also supported a lot of our operations in and around Iraq since the Gulf War. And they have been a good ally of ours. I think that is terribly important. If you look at the size of the country, if you look at its geostrategic significance, where it is, what it can block and what it can open the doors to, it is terribly important.

Secondly, I think it is terribly important for us to do everything we can to resolve the differences between Turkey and Greece. They are deeply-held, historic, and I'm convinced, at bottom, ultimately irrational. I mean, that to allow the potential that Greece and Turkey both have for future economic growth and cooperation, for political cooperation, for security cooperation to be broken on the rocks of their differences over Cypress and other territorial differences in the Aegean is, in my view, a grave error.

And so I will be talking to Prime Minister Yilmaz about this. I want a resolution of the Cypress issue very badly. You have evidence of that in asking -- when I asked Mr. Holbrooke to head our efforts to try to resolve it. And our long friendship, our long alliance with Greece, the role that many Greek Americans have in our national life would, if nothing else, impose on us a heavy responsibility for trying to work out the problems on Cypress.

But the truth is, this is a case where not only does the United States need to be on good terms with Greece and Cypress*, they need to be on good terms with each other. If they could sort of take off their blinders about each other and look at what they're really up against for the next 30 or 40 years in their neighborhood in terms of opportunities and threats, this world would be in considerably better shape moving into a new century.

Q Mr. President --

THE PRESIDENT: Look, it's 3:30 p.m. I've gone on for an hour and a half. Let me just say, first, some of you had trouble getting in last night. I'm really sorry about that. It shows I haven't solved all the administrative problems of the government.

Secondly, I wish you a happy holiday. We've got a lot to be happy about, a lot to be thankful for.

Thirdly, if in a sentence -- I'll leave you with one sentence -- you asked about, a lot of people are curious about the next three years. When I came here I was just trying to prove America could work again. I just wanted the country to work again. I wanted to get the economy going. I wanted to deal with social problems like crime and welfare, and I wanted to pull the country together. I want to see us spend the next three years fleshing out that agenda.

But now is the time that we should be looking at the long-term problems of the country, the long-term challenges. That's why this environmental issue of climate change is so important. Every environmental challenge we have met in the last 30 years -- we've proved we could grow the economy and preserve the environment -- we've got to deal with it here. That's why the education issues and setting up excellence and lifetime learning is so important, because we will not be able to protect all Americans from the global changes that are taking place unless we do that. That's why it's important to deal with the entitlements challenge, because we have to honor that has been done by Social Security and Medicare for retirees, and let more people do more for their own retirement, as well, and do it in a way that doesn't bankrupt their children when we baby-boomers retire.

And those are just three of the issues that we have to face that are long-term challenges. But I think you'll see in this next three years we'll still be trying to make America work, we'll still be trying to deal with the issues. But we'll spend a lot more time on the long-term challenges and on the long-term challenges of having a security framework in the world that enables us to both pursue our interests and our values.

On this occasion, at the end of this year, I think our country is in better shape than it was five years ago, and I believe three years from now, if we continue to work on that agenda, we'll be in better shape still.

Thank you very much. (Applause.)


3:34 P.M. EST