Chapter CXCI: Conclusion (7)

Let me say to all the people watching us tonight who will ask me these questions beginning tomorrow as I go around the country and who’ve asked it in the past: We’re not cutting the deficit just because experts say it’s the thing to do or because it has some intrinsic merit. We have to cut the deficit because the more we spend paying off the debt, the less tax dollars we have to invest in jobs and education and the future of this country. And the more money we take out of the pool of available savings, the harder it is for people in the private sector to borrow money at affordable interest rates for a college loan for their children, for a home mortgage, or to start a new business.

That’s why we’ve got to reduce the debt, because it is crowding out other activities that we ought to be engaged in and that the American people ought to be engaged in. We cut the deficit so that our children will be able to buy a home, so that our companies can invest in the future and in retraining their workers, so that our Government can make the kinds of investments we need to be a stronger and smarter and safer nation.

If we don’t act now, you and I might not even recognize this Government 10 years from now. If we just stay with the same trends of the last 4 years, by the end of the decade the deficit will be $635 billion a year, almost 80 percent of our gross domestic product. And paying interest on that debt will be the costliest Government program of all. We’ll still be the world’s largest debtor. And when Members of Congress come here, they’ll be devoting over 20 cents on the dollar to interest payments, more than half of the budget to health care and to other entitlements. And you’ll come here and deliberate and argue over 6 or 7 cents on the dollar, no matter what America’s problems are. We will not be able to have the independence we need to chart the future that we must. And we’ll be terribly dependent on foreign funds for a large portion of our investment.

This budget plan, by contrast, will by 1997 cut $140 billion in that year alone from the deficit, a real spending cut, a real revenue increase, a real deficit reduction, using the independent numbers of the Congressional Budget Office. [Laughter] Well, you can laugh, my fellow Republicans, but I’ll point out that the Congressional Budget Office was normally more conservative in what was going to happen and closer to right than previous Presidents have been.

I did this so that we could argue about priorities with the same set of numbers. I did this so that no one could say I was estimating my way out of this difficulty. I did this because if we can agree together on the most prudent revenues we’re likely to get if the recovery stays and we do right things economically, then it will turn out better for the American people than we say. In the last 12 years, because there were differences over the revenue estimates, you and I know that both parties were given greater elbow room for irresponsibility. This is tightening the rein on the Democrats as well as the Republicans. Let’s at least argue about the same set of numbers so the American people will think we’re shooting straight with them.

As I said earlier, my recommendation makes more than 150 difficult reductions to cut the Federal spending by a total of $246 billion. We are eliminating programs that are no longer needed, such as nuclear power research and development. We’re slashing subsidies and canceling wasteful projects. But many of these programs were justified in their time, and a lot of them are difficult for me to recommend reductions in, some really tough ones for me personally. I recommend that we reduce interest subsidies to the Rural Electric Administration. That’s a difficult thing for me to recommend. But I think that I cannot exempt the things that exist in my State or in my experience, if I ask you to deal with things that are difficult for you to deal with. We’re going to have to have no sacred cows except the fundamental abiding interest of the American people.

I have to say that we all know our Government has been just great at building programs. The time has come to show the American people that we can limit them too; that we can not only start things, that we can actually stop things.

About the defense budget, I raise a hope and a caution. As we restructure our military forces to meet the new threats of the post-cold-war world, it is true that we can responsibly reduce our defense budget. And we may all doubt what that range of reductions is, but let me say that as long as I am President, I will do everything I can to make sure that the men and women who serve under the American flag will remain the best trained, the best prepared, the best equipped fighting force in the world. And every one of you should make that solemn pledge. We still have responsibilities around the world. We are the world’s only superpower. This is still a dangerous and uncertain time, and we owe it to the people in uniform to make sure that we adequately provide for the national defense and for their interests and needs. Backed by an effective national defense and a stronger economy, our Nation will be prepared to lead a world challenged as it is everywhere by ethnic conflict, by the proliferation of weapons of mass destruction, by the global democratic revolution, and by challenges to the health of our global environment.

I know this economic plan is ambitious, but I honestly believe it is necessary for the continued greatness of the United States. And I think it is paid for fairly, first by cutting Government, then by asking the most of those who benefited the most in the past, and by asking more Americans to contribute today so that all of us can prosper tomorrow.

For the wealthiest, those earning more than $180,000 per year, I ask you all who are listening tonight to support a raise in the top rate for Federal income taxes from 31 to 36 percent. We recommend a 10 percent surtax on incomes over $250,000 a year, and we recommend closing some loopholes that let some people get away without paying any tax at all.

For businesses with taxable incomes in excess of $10 million, we recommend a raise in the corporate tax rate, also to 36 percent, as well as a cut in the deduction for business entertainment expenses. Our plan seeks to attack tax subsidies that actually reward companies more for shutting their operations down here and moving them overseas than for staying here and reinvesting in America. I say that as someone who believes that American companies should be free to invest around the world and as a former Governor who actively sought investment of foreign companies in my State. But the Tax Code should not express a preference to American companies for moving somewhere else, and it does in particular cases today.

We will seek to ensure that, through effective tax enforcement, foreign corporations who do make money in America simply pay the same taxes that American companies make on the same income.

To middle class Americans who have paid a great deal for the last 12 years and from whom I ask a contribution tonight, I will say again as I did on Monday night: You’re not going alone any more, you’re certainly not going first, and you’re not going to pay more for less as you have too often in the past. I want to emphasize the facts about this plan: 98.8 percent of America’s families will have no increase in their income tax rates, only 1.2 percent at the top.

Let me be clear: There will also be no new cuts in benefits for Medicare. As we move toward the 4th year, with the explosion in health care costs, as I said, projected to account for 50 percent of the growth of the deficit between now and the year 2000, there must be planned cuts in payments to providers, to doctors, to hospitals, to labs, as a way of controlling health care costs. But I see these only as a stopgap until we can reform the entire health care system. If you’ll help me do that, we can be fair to the providers and to the consumers of health care. Let me repeat this, because I know it matters to a lot of you on both sides of the aisle. This plan does not make a recommendation for new cuts in Medicare benefits for any beneficiary.

Secondly, the only change we are making in Social Security is one that has already been publicized. The plan does ask older Americans with higher incomes, who do not rely solely on Social Security to get by, to contribute more. This plan will not affect the 80 percent of Social Security recipients who do not pay taxes on Social Security now. Those who do not pay tax on Social Security now will not be affected by this plan.

Our plan does include a broad-based tax on energy, and I want to tell you why I selected this and why I think it’s a good idea. I recommend that we adopt a Btu tax on the heat content of energy as the best way to provide us with revenue to lower the deficit because it also combats pollution, promotes energy efficiency, promotes the independence, economically, of this country as well as helping to reduce the debt, and because it does not discriminate against any area. Unlike a carbon tax, that’s not too hard on the coal States; unlike a gas tax, that’s not too tough on people who drive a long way to work; unlike an ad valorem tax, it doesn’t increase just when the price of an energy source goes up. And it is environmentally responsible. It will help us in the future as well as in the present with the deficit.

Taken together, these measures will cost an American family with an income of about $40,000 a year less than $17 a month. It will cost American families with incomes under $30,000 nothing because of other programs we propose, principally those raising the earned-income tax credit.

Because of our publicly stated determination to reduce the deficit, if we do these things, we will see the continuation of what’s happened just since the election. Just since the election, since the Secretary of the Treasury, the Director of the Office of Management and Budget, and others who have begun to speak out publicly in favor of a tough deficit reduction plan, interest rates have continued to fall long-term. That means that for the middle class who will pay something more each month, if they had any credit needs or demands, their increased energy costs will be more than offset by lower interest costs for mortgages, consumer loans, credit cards. This can be a wise investment for them and their country now.

I would also point out what the American people already know, and that is, because we’re a big, vast country where we drive long distances, we have maintained far lower burdens on energy than any other advanced country. We will still have far lower burdens on energy than any other advanced country. And these will be spread fairly, with real attempts to make sure that no cost is imposed on families with incomes under $30,000 and that the costs are very modest until you get into the higher income groups where the income taxes trigger in.

Now, I ask all of you to consider this: Whatever you think of the tax program, whatever you think of the spending cuts, consider the cost of not changing. Remember the numbers that you all know. If we just keep on doing what we’re doing, by the end of the decade we’ll have a $650-billion-a-year deficit. If we just keep on doing what we’re doing, by the end of the decade 20 percent of our national income will go to health care every year, twice as much as any other country on the face of the globe. If we just keep on doing what we’re doing, over 20 cents on the dollar will have to go to service the debt.

Unless we have the courage now to start building our future and stop borrowing from it, we’re condemning ourselves to years of stagnation interrupted by occasional recessions, to slow growth in jobs, to no more growth in income, to more debt, to more disappointment. Worse, unless we change, unless we increase investment and reduce the debt to raise productivity so that we can generate both jobs and incomes, we will be condemning our children and our children’s children to a lesser life than we enjoyed. Once Americans looked forward to doubling their living standards every 25 years. At present productivity rates, it will take 100 years to double living standards, until our grandchildren’s grandchildren are born. I say that is too long to wait.

Tonight the American people know we have to change. But they’re also likely to ask me tomorrow and all of you for the weeks and months ahead whether we have the fortitude to make the changes happen in the right way. They know that as soon as I leave this Chamber and you go home, various interest groups will be out in force lobbying against this or that piece of this plan, and that the forces of conventional wisdom will offer a thousand reasons why we well ought to do this but we just can’t do it.

Our people will be watching and wondering, not to see whether you disagree with me on a particular issue but just to see whether this is going to be business as usual or a real new day, whether we’re all going to conduct ourselves as if we know we’re working for them. We must scale the walls of the people’s scepticisms, not with our words but with our deeds. After so many years of gridlock and indecision, after so many hopeful beginnings and so few promising results, the American people are going to be harsh in their judgments of all of us if we fail to seize this moment.

This economic plan can’t please everybody. If the package is picked apart, there will be something that will anger each of us, won’t please anybody. But if it is taken as a whole, it will help all of us. So I ask you all to begin by resisting the temptation to focus only on a particular spending cut you don’t like or some particular investment that wasn’t made. And nobody likes the tax increases, but let’s just face facts. For 20 years, through administrations of both parties, incomes have stalled and debt has exploded and productivity has not grown as it should. We cannot deny the reality of our condition. We have got to play the hand we were dealt and play it as best we can.

My fellow Americans, the test of this plan cannot be “what is in it for me.” It has got to be “what is in it for us.” If we work hard and if we work together, if we rededicate ourselves to creating jobs, to rewarding work, to strengthening our families, to reinventing our Government, we can lift our country’s fortunes again.

Tonight I ask everyone in this Chamber and every American to look simply into your heart, to spark your own hopes, to fire your own imagination. There is so much good, so much possibility, so much excitement in this country now that if we act boldly and honestly, as leaders should, our legacy will be one of prosperity and progress. This must be America’s new direction. Let us summon the courage to seize it.

Thank you. God bless America.

***

State of the Union Address William J. Clinton January 25, 1994

Mr. Speaker, Mr. President, members of the 103rd Congress, my fellow Americans:

I am not sure what speech is in the TelePrompTer tonight, but I hope we can talk about the State of the Union.

I ask you to begin by recalling the memory of the giant who presided over this chamber with such force and grace. Tip O’Neill liked to call himself “A Man of the House” and he surely was that. But even more, he was a man of the people, a bricklayer’s son who helped to build the great American middle class. Tip O’Neill never forgot who he was, where he came from, or who sent him here. Tonight he’s smiling down on us for the first time from the Lord’s gallery. But in his honor, may we too also remember who we are, where we come from, and who sent us here.

If we do that we will return over and over again to the principle that if we simply give ordinary people equal opportunity, quality education, and a fair shot at the American dream, they will do extraordinary things.

We gather tonight in a world of changes so profound and rapid that all nations are tested. Our American heritage has always been to master such change, to use it to expand opportunity at home, and our leadership abroad. But for too long and in too many ways, that heritage was abandoned, and our country drifted.

For 30 years family life in America has been breaking down. For 20 years the wages of working people have been stagnant or declining. For the 12 years of trickle down economics we built a false prosperity on a hollow base as our national debt quadrupled. From 1989 to 1992 we experienced the slowest growth in a half century. For too many families, even when both parents were working, the American dream has been slipping away.

In 1992 the American people demanded that we change. I year ago I asked all of you to join me in accepting responsibility for the future of our country.

Well, we did. We replaced drift and deadlock with renewal and reform. And I want to thank every one of you here who heard the American people, who broke gridlock, who gave them the most successful teamwork between a president and a Congress in 30 years.

Accomplishments

This Congress produced a budget that cut the deficit by half a trillion dollars, cut spending and raised income taxes on only the wealthiest Americans. This Congress produced tax relief for millions of low-income workers to reward work over welfare. It produced NAFTA. It produced the Brady bill, now the Brady law.

And thank you, Jim Brady, for being here, and God bless you, Sarah. This Congress produced tax cuts to reduce the taxes of nine out of 10 small businesses who use the money to invest more and create more jobs. It produced more research and treatment for AIDS, more childhood immunizations, more support for women’s health research, more affordable college loans for the middle class, a new national service program for those who want to give something back to their country and their communities for higher education, a dramatic increase in high-tech investments to move us from a defense to a domestic high-tech economy. This Congress produced a new law--the motor voter bill--to help millions of people register to vote. It produced family and medical leave--all passed, all signed into law, with not one single veto.

These accomplishments were all commitments I made when I sought this office, and in fairness, they all had to be passed by you in this Congress. But I am persuaded that the real credit belongs to the people who sent us here, who pay our salaries, who hold our feet to the fire. But what we do here is really beginning to change lives. Let me just give you one example.

Family And Medical Leave

I will never forget what the family and medical leave law meant to just one father I met early one Sunday morning in the White House. It was unusual to see a family there touring early Sunday morning, but he had his wife and his three children there, one of them in a wheelchair. And I came up, and after we had our picture taken and had a little visit, I was walking off, and that man grabbed me by the arm and he said, “Mr. President, let me tell you something. My little girl here is desperately ill. She’s probably not going to make it. But because of the family leave law, I was able to take time off to spend with her, the most important I ever spent in my life, without losing my job and hurting the rest of my family. It means more to me than I will ever be able to say. Don’t you people up here ever think what you do doesn’t make a difference. It does.”

Though we are making a difference, our work has just begun. Many Americans still haven’t felt the impact of what we’ve done. The recovery still hasn’t touched every community or created enough jobs. Incomes are still stagnant. There’s still too much violence and not enough hope in too many places.

Abroad, the young democracies we are strongly supporting still face very difficult times and look to us for leadership.

And so tonight, let us resolve to continue the journey of renewal, to create more and better jobs, to guarantee health security for all, to reward welfare--work over welfare, to promote democracy abroad and to begin to reclaim our streets from violent crime and drugs and gangs to renew our own American community.

Deficit Reduction

Last year, we began to put our house in order by tackling the budget deficit that was driving us toward bankruptcy. We cut $255 billion in spending, including entitlements, in over 340 separate budget items. We froze domestic spending and used honest budget numbers.

Led by the vice president, we’ve launched a campaign to reinvent government. We’ve cut staff, cut perks, even trimmed the fleet of federal limousines. After years of leaders whose rhetoric attacked bureaucracy but whose actions expanded it, we will actually reduce it by 252,000 people over the next five years. By the time we have finished, the federal bureaucracy will be at its lowest point in 30 years.

Because the deficit was so large and because they benefited from tax cuts in the 1980s, we did ask the wealthiest Americans to pay more to reduce the deficit. So on April the 15th, the American people will discover the truth about what we did last year on taxes. Only the top one--the top 1.2 percent of Americans, as I said all along, will face higher income tax rates--let me repeat, only the wealthiest 1.2 percent of Americans will face higher income tax rates and no one else will, and that is the truth. Of course, there were, as there always are in politics, naysayers who said this plan wouldn’t work, but they were wrong. When I became president, the experts predicted that next year’s deficit would be $300 billion, but because we acted, those same people now say the deficit’s going to be under $180 billion, 40 percent lower than was previously predicted.

The Economy

Our economic program has helped to produce the lowest core inflation rate and the lowest interest rates in 20 years, and because those interest rates are down, business investment and equipment is growing at seven times the rate of the previous four years. Auto sales are way up, home sales at a record high. Millions of Americans have refinanced their homes and our economy has produced 1.6 million private-sector jobs in 1993, more than were created in the previous four years combined.

The people who supported this economic plan should be proud of its early results--proud. But everyone in this chamber should know and acknowledge that there is more to do. Next month I will send you one of the toughest budgets ever presented to Congress. It will cut spending in more than 300 programs, eliminate 100 domestic programs, and reforms the way in which governments buy goods and services.

This year we must again make the hard choices to live within the hard spending ceilings we have set. We must do it. We have proved we can bring the deficit down without choking off recovery, without punishing seniors or the middle class, and without putting our national security at risk. If you will stick with this plan, we will post three consecutive years of declining deficits for the first time since Harry Truman lived in the White House. And once again, the buck stops here.

Trade

Our economic plan also bolsters our strength and our credibility around the world. Once we reduced the deficit and put the steel back into our competitive edge, the world echoed with the sound of falling trade barriers. In one year, with NAFTA, with GATT, with our efforts in Asia and the national export strategy, we did more to open world markets to American products than at any time in the last two generations. That means more jobs and rising living standards for the American people, low deficits, low inflation, low interest rates, low trade barriers and high investments. These are the building blocks of our recovery. But if we want to take full advantage of the opportunities before us in the global economy, you all know we must do more.

As we reduce defense spending, I ask Congress to invest more in the technologies of tomorrow. Defense conversion will keep us strong militarily and create jobs for our people here at home.

As we protect our environment, we must invest in the environmental technologies of the future which will create jobs. This year we will fight for a revitalized Clean Water Act and a Safe Drinking Water Act and a reformed Superfund program.

And the vice president is right; we must also work with the private sector to connect every classroom, every clinic, every library, every hospital in America into a national information superhighway by the year 2000. Think of it. Instant access to information will increase productivity. It will help to educate our children. It will provide better medical care. It will create jobs. And I call on the Congress to pass legislation to establish that information superhighway this year.

As we expand opportunity and create jobs, no one can be left out. We must continue to enforce fair lending and fair housing and all civil rights laws, because America will never be complete in its renewal until everyone shares in its bounty. But we all know, too, we can do all these things-- put our economic house in order, expand world trade, target the jobs of the future, guarantee equal opportunity.

But if we’re honest, we’ll all admit that this strategy still cannot work unless we also give our people the education, training and skills they need to seize the opportunities of tomorrow. We must set tough, world-class academic and occupational standards for all our children and give our teachers and students the tools they need to meet them.

Education

Our Goals 2000 proposal will empower individual school districts to experiment with ideas like chartering their schools to be run by private corporations or having more public school choice, to do whatever they wish to do as long as we measure every school by one high standard: Are our children learning what they need to know to compete and win in the global economy?

Goals 2000 links world-class standards to grassroots reforms and I hope Congress will pass it without delay. Our school to work initiative will for the first time link school to the world of work, providing at least one year of apprenticeship beyond high school. After all, most of the people we’re counting on to build our economic future won’t graduate from college. It’s time to stop ignoring them and start empowering them. We must literally transform our outdated unemployment system into a new reemployment system. The old unemployment system just sort of kept you going while you waited for your old job to come back. We’ve got to have a new system to move people into new and better jobs because most of those old jobs just don’t come back. And we know that the only way to have real job security in the future, to get a good job with a growing income, is to have real skills and the ability to learn new ones. So we’ve got to streamline today’s patchwork of training programs and make them a source of new skill for our people who lose their jobs. Reemployment, not unemployment, must become the centerpiece of our economic renewal. I urge you to pass it in this session of Congress.

Welfare

And just as we must transform our unemployment system, so must we also revolutionize our welfare system. It doesn’t work; it defies our values as a nation. If we value work, we can’t justify a system that makes welfare more attractive than work if people are worried about losing their health care.

If we value responsibility, we can’t ignore the $34 billion in child support absent parents out to be paying to millions of parents who are taking care of their children--. If we value strong families, we can’t perpetuate a system that actually penalizes those who stay together. Can you believe that a child who has a child gets more money from the government for leaving home than for staying home with a parent or a grandparent? That’s not just bad policy, it’s wrong and we ought to change it.

I worked on this problem for years before I became president, with other governors and with members of Congress in both parties and with the previous administration of another party. I worked on it with people who were on welfare, lots of them. And I want to say something to everybody here who cares about this issue. The people who most want to change this system are the people who are dependent on it. They want to get off welfare; they want to go back to work; they want to do right by their kids.

I once had a hearing when I was a governor and I brought in people on welfare from all over America who had found their way to work and a woman from my state who testified was asked this question. What’s the best thing about being off welfare and in a job. And without blinking an eye, she looked at 40 governors and she said, when my boy goes to school and they say “What does your mother do for a living?” he can give an answer. These people want a better system and we ought to give it to them.

Last year, we began this. We gave the states more power to innovate because we know that a lot of great ideas come from outside Washington and many states are already using it. Then this Congress took a dramatic step. Instead of taxing people with modest incomes into poverty, we helped them to work their way out of poverty by dramatically increasing the earned income tax credit. It will lift 15 million working families out of poverty, rewarding work over welfare, making it possible for people to be successful workers and successful parents. Now that’s real welfare reform.

But there is more to be done. This spring I will send you a comprehensive welfare reform bill that builds on the Family Support Act of 1988 and restores the basic values of work and responsibility. We will say to teenagers if you have a child out of wedlock, we’ll no longer give you a check to set up a separate household, we want families to stay together; say to absent parents who aren’t paying their child support if you’re not providing for your children we’ll garnish your wages, suspend your license, track you across state lines, and if necessary make some of you work off what you owe.

People who bring children into this world cannot and must not walk away from them.

But to all those who depend on welfare, we should offer ultimately a simple compact. We will provide the support, the job training, the child care you need for up to two years, but after that anyone who can work, must, in the private sector wherever possible, in community service if necessary. That’s the only way we’ll ever make welfare what it ought to be, a second chance, not a way of life.

I know it will be difficult to tackle welfare reform in 1994 at the same time we tackle health care. But let me point out, I think it is inevitable and imperative. It is estimated that one million people are on welfare today because it’s the only way they can get health care coverage for their children. Those who choose to leave welfare for jobs without health benefits, and many entry level jobs don’t have health benefits, find themselves in the incredible position of paying taxes that help to pay for health care coverage for those who made the other choice, to stay on welfare. No wonder people leave work and go back to welfare, to get health care coverage. We’ve got to solve the health care problem to have real welfare reform.

Health Care Reform

So this year we will make history by reforming the health care system. And I would say to you, all of you my fellow public servants, this is another issue where the people are way ahead of the politicians.

That may not be popular with either party, but it happens to be the truth.

You know, the first lady has received now almost a million letters from people all across America and from all walks of life. I’d like to share just one of them with you. Richard Anderson of Reno, Nevada, lost his job and, with it, his health insurance. Two weeks later, his wife, Judy, suffered a cerebral aneurysm. He rushed her to the hospital, where she stayed in intensive care for 21 days. The Anderson’s bills were over $120,000. Although Judy recovered and Richard went back to work at $8 an hour, the bills were too much for them and they were literally forced into bankruptcy.

“Mrs. Clinton,” he wrote to Hillary, “no one in the United States of America should have to lose everything they’ve worked for all their lives because they were unfortunate enough to become ill.” It was to help the Richard and Judy Andersons of America that the first lady and so many others have worked so hard and so long on this health care reform issue. We owe them our thanks and our action.

I know there are people here who say there’s no health care crisis. Tell it to Richard and Judy Anderson. Tell it to the 58 million Americans who have no coverage at all for some time each year. Tell it to the 81 million Americans with those preexisting conditions; those folks are paying more or they can’t get insurance at all or they can’t ever change their jobs because they or someone in their family has one of those preexisting conditions. Tell it to the small businesses burdened by skyrocketing costs of insurance. Most small businesses cover their employers, and they pay on average 35 percent more in premiums than big businesses or government. Or tell it to the 76 percent of insured Americans, three out of four whose policies have lifetime limits, and that means they can find themselves without any coverage at all just when they need it the most.

So, if any of you believe there’s no crisis, you tell it to those people, because I can’t.

There are some people who literally do not understand the impact of this problem on people’s lives, but all you have to do is go out and listen to them. Just go talk to them anywhere, in any congressional district in this country. They’re Republicans and Democrats and independents. It doesn’t have a lick to do with party. They think we don’t get it, and it’s time we show that we do get it.

From the day we began, our health care initiative has been designed to strengthen what is good about our health care system--the world’s best health care professionals, cutting edge research, and wonderful research institutions, Medicare for older Americans. None of this--none of it should be put at risk. But we’re paying more and more money for less and less care. Every year, fewer and fewer Americans even get to choose their doctors. Every year, doctors and nurses spend more time on paperwork and less time with patients because of the absolute bureaucratic nightmare the present system has become.

This system is riddled with inefficiency, with abuse, with fraud, and everybody knows it. In today’s health care system, insurance companies call the shots. They pick whom they cover and how they cover them. They can cut off your benefits when you need your coverage the most. They are in charge.

What does it mean? It means every night millions of well-insured Americans go to bed just an illness, an accident, or a pink slip away from having no coverage or financial ruin. It means every morning millions of Americans go to work without any health insurance at all--something the workers in no other advanced country in the world do. It means that every year more and more hard working people are told to pick a new doctor because their boss has had to pick a new plan. And countless others turndown better jobs because they know, if they take the better job, they’ll lose their health insurance.

If we just let the health care system continue to drift, our country will have people with less care, fewer choices, and higher bill.

Now, our approach protects the quality of care and people’s choices. It builds on what works today in the private sector, to expand employer based coverage, to guarantee private insurance for every American. And I might say, employer based private insurance for every American was proposed 20 years ago by President Richard Nixon to the United States Congress. It was a good idea then, and it’s a better idea today.

Why do we want guaranteed private insurance? Because right now, nine out of ten people who have insurance get it through their employers--and that should continue. And if your employer is providing good benefits at reasonable prices, that should continue too. And that ought to make the Congress and the president feel better. Our goal is health insurance everybody can depend on--comprehensive benefits that cover preventive care and prescription drugs, health premiums that don’t just explode when you get sick or you get older, the power--no matter how small your business is --to choose dependable insurance at the same competitive rates that governments and big business get today, one simple form for people who are sick, and most of all, the freedom to choose a plan and the right to choose your own doctor.

Our approach protects older Americans. Every plan before the Congress proposes to slow the growth of Medicare. The difference is this. We believe those savings should be used to improve health care for senior citizens. Medicare must be protected, and it should cover prescription drugs, and we should take the first steps in covering long-term care.

To those who would cut Medicare without protecting seniors, I say the solution to today’s squeeze on middle class working people’s health care is not to put the squeeze on middle class retired people’s health care. We can do better than that. When it’s all said and done, it’s pretty simple to me. Insurance ought to mean what it used to mean. You pay a fair price for security, and when you get sick, health care is always there--no matter what.

Along with the guarantee of health security, we all have to admit, too, there must be more responsibility on the part of all of us in how we use this system. People have to take their kids to get immunized. We should all take advantage of preventive care. We must all work together to stop the violence that explodes our emergency rooms. We have to practice better health habits, and we can’t abuse the system. And those who don’t have insurance under our approach will get coverage, but they will have to pay something for it, too. The minority of businesses that provide no insurance at all, and in so doing, shift the cost of the care of their employees to others, should contribute something. People who smoke should pay more for a pack of cigarettes. Everybody can contribute something if we want to solve the health care crisis. There can’t be anymore something for nothing. It will not be easy, but it can be done. Now in the coming months I hope very much to work with both Democrats and Republicans to reform a health care system by using the market to bring down costs and to achieve lasting health security. But if you look at history, we see that for 60 years this country has tried to reform health care. President Roosevelt tried, President Truman tried, President Nixon tried, President Carter tried. Every time the special interests were powerful enough to defeat them, but not this time.

Campaign Finance Reform

I know that facing up to these interests will require courage. It will raise critical questions about the way we finance our campaigns and how lobbyists yield their influence. The work of change, frankly, will never get any easier until we limit the influence of well financed interests who profit from this current system. So I also must now call on you to finish the job both houses began last year, by passing tough and meaningful campaign finance reform and lobby reform legislation this year.

You know, my fellow Americans, this is really a test for all of us. The American people provide those of us in government service with terrific health care benefits at reasonable costs. We have health care that’s always there. I think we need to give every hard working, taxpaying American the same health care security they have already given to us.

I want to make this very clear: I am open, as I have said repeatedly, to the best ideas of concerned members of both parties. I have no special brief for any specific approach, even in our own bill, except this: if you send me legislation that does not guarantee every American private health insurance that can never be taken away, you will force me to take this pen, veto the legislation, and we’ll come right back here and start all over again.

But I don’t think that’s going to happen. I think we’re ready to act now. I believe that you’re ready to act now. And if you’re ready to guarantee every American the same health care that you have, health care that can never be taken away--now, not next year or the year after, now is the time to stand with the people who sent us here. Now.

Foreign Policy

As we take these steps together to renew our strength at home, we cannot turn away from our obligations to renew our leadership abroad. This is a promising moment. Because of the agreements we have reached this year, last year, Russia’s strategic nuclear missiles soon will no longer be pointed at the United States. Nor will we point ours at them.

Instead of building weapons in space, Russian scientists will help us to build the international space station.

And of course there are still dangers in the world: rampant arms proliferation, bitter regional conflicts, ethnic and nationalist tensions in many new democracies, severe environmental degradation the world over, and fanatics who seek to cripple the world’s cities with terror. As the world’s greatest power, we must therefore maintain our defenses and our responsibilities. This year we secured indictments against terrorists and sanctions against those harbor them. We worked to promote environmentally-sustainable economic growth. We achieved agreements with Ukraine, with Belarus, with Kazakhstan, to eliminate completely their nuclear arsenals. We are working to achieve a Korean Peninsula free of nuclear weapons. We will seek early ratification of the treaty to ban chemical weapons worldwide. And earlier today we joined with over 30 nations to begin negotiations on a comprehensive ban to stop all nuclear testing.

But nothing--nothing--is more important to our security than our nation’s armed forces. We honor their contributions, including those who are carrying out the longest humanitarian airlift in history in Bosnia---- those who will complete their mission in Somalia this year and their brave comrades who gave their lives there. Our forces are the finest military our nation has ever had, and I have pledged that as long as I am president they will remain the best-equipped, the best-trained and the best-prepared fighting force on the face of the earth.

Defense

Last year, I proposed a defense plan that maintains our post-Cold War security at a lower cost. This year, many people urged me to cut our defense spending further to pay for other government programs. I said no. The budget I send to Congress draws the line against further defense cuts. It protects the readiness and quality of our forces. Ultimately, the best strategy is to do that. We must not cut defense further. I hope the Congress without regard to party will support that position.

Ultimately, the best strategy to ensure our security and to build a durable peace is to support the advance of democracy elsewhere. Democracies don’t attack each other. They make better trading partners and partners in diplomacy. That is why we have supported, you and I, the democratic reformers in Russia and in the other states of the former Soviet bloc. I applaud the bipartisan support this Congress provided last year for our initiatives to help Russia, Ukraine and the other states through their epic transformations.

Our support of reform must combine patience for the enormity of the task and vigilance for our fundamental interest and values. We will continue to urge Russia and the other states to press ahead with economic reforms, and we will seek to cooperate with Russia to solve regional problems while insisting that, if Russian troops operate in neighboring states, they do so only when those states agree to their presence and in strict accord with international standards.

But we must also remember as these nations chart their own futures, and they must chart their own futures, how much more secure and more prosperous our own people will be if democratic and market reform succeed all across the former communist bloc. Our policy has been to support that move and that has been the policy of the Congress. We should continue it.

Europe

That is why I went to Europe earlier this month, to work with our European partners to help to integrate all the former communist countries into a Europe that has the possibility of becoming unified for the first time in its entire history, it’s entire history, based on the simple commitments of all nations in Europe to democracy, to free markets, and to respect for existing borders.

With our allies, we have created a partnership for peace that invites states from the former Soviet bloc and other non-NATO members to work with NATO in military cooperation. When I met with Central Europe’s leaders, including Lech Walesa and Vaclav Havel, men who put their lives on the line for freedom, I told them that the security of their region is important to our country’s security.

This year, we must also do more to support democratic renewal and human rights and sustainable development all around the world. We will ask Congress to ratify the new GATT accord, we will continue standing by South Africa as it works its way through its bold and hopeful and difficult transition to democracy. We will convene a summit of the Western hemisphere’s democratic leaders from Canada to the tip of South America. And we will continue to press for the restoration of true democracy in Haiti.

And as we build a more constructive relationship with China, we must continue to insist on clear signs of improvement in that nation’s human rights record.

Middle East

We will also work for new progress toward the Middle East peace. Last year the world watched Yitzhak Rabin and Yasir Arafat at the White House when they had their historic handshake of reconciliation. But there is a long, hard road ahead. And on that road I am determined that I and our administration will do all we can to achieve a comprehensive and lasting peace for all the peoples of the region.

Now, there are some in our country who argue that with the Cold War, America should turn its back on the rest of the world. Many around the world were afraid we would do just that. But I took this office on a pledge that had no partisan tinge to keep our nation secure by remaining engaged in the rest of the world. And this year, because of our work together, enacting NAFTA, keeping our military strong and prepared, supporting democracy abroad, we have reaffirmed America’s leadership, America’s engagement, and as a result, the American people are more secure than they were before.

Crime

But while Americans are more secure from threats abroad, I think we all now that in many ways we are less secure from threats here at home. Everyday the national peace is shattered by crime.

In Petaluma, California, an innocent slumber party gives way to agonizing tragedy for the family of Polly Klaas. An ordinary train ride on Long Island ends in a hail of nine millimeter rounds. A tourist in Florida is nearly burned alive by bigots simply because he is black. Right here in our nation’s capital, a brave young man named Jason White, a policeman, the son and grandson of policemen, is ruthlessly gunned down.

Violent crime and the fear it provokes are crippling our society, limiting personal freedom, and fraying the ties that bind us.

The crime bill before Congress gives you a chance to do something about it, a chance to be tough and smart. What does that mean? Let me begin by saying I care a lot about this issue. Many years ago, when I started out in public life, I was the attorney general of my state. I served as a governor for a dozen years. I know what it’s like to sign laws increasing penalties, to build more prison cells, to carry out the death penalty. I understand this issue and it is not a simple thing.

First, we must recognize that most violent crimes are committed by a small percentage of criminals who too often break the laws even when they are on parole. Now those who commit crimes should be punished, and those who commit repeated violent crimes should be told when you commit a third violent crime, you will be put away and put away for good, three strikes and you are out.

Second, we must take serious steps to reduce violence and prevent crime, beginning with more police officers and more community policing. We know right now that police who work the streets, know the folks, have the respect of the neighborhood kids, focus on high crime areas, we know that they are more likely to prevent crime as well as catch criminals. Look at the experience of Houston, where the crime rate dropped 17 percent in one year when that approach was taken. Here tonight is one of those community policemen, a brave, young detective, Kevin Jett, whose beat is eight square blocks in one of the toughest neighborhoods in New York. Every day he restores some sanity and safety, and a sense of values and connection to the people whose lives he protects. I’d like to ask him to stand up and be recognized tonight.

You will be given a chance to give the children of this country, the law abiding working people of this country, and don’t forget, in the toughest neighborhoods in this country, in the highest crime neighborhoods in this country the vast majority of people get up every day and obey the law, pay their taxes, do their best to raise their kids. They deserve people like Kevin Jett, and you’re going to be given the chance to give the American people another 100,000 of them, well trained, and I urge you to do it.

You have before you crime legislation which also establishes a police corps to encourage young people to get an education, and pay it off by serving as police officers, which encourages retiring military personnel to move into police forces--and enormous resources for our country, one which has a safe schools provisions which will give our young people the chance to walk to school in safety and to be in school in safety instead of dodging bullets. These are important things.

The third thing we have to do is to build on the Brady Bill--the Brady Law to take further steps----to take further steps to keep guns out of the hands of criminals.