THE WHITE HOUSE

                    Office of the Press Secretary
______________________________________________________________
For Immediate Release                            October 7, 1994


                  PRESS CONFERENCE BY THE PRESIDENT


                            The East Room



2:00 P.M. EDT


             THE PRESIDENT:  Good afternoon.  Ladies and gentlemen,
20 months ago I came here to make a start and to make America work
for ordinary citizens again; to take on some tough issues too long
ignored and to get our economic house in order.  There have been some
tough fights along the way, but I believe they were the right fights
for our future.

             We came here with an economic strategy that was
comprehensive and direct -- reduce the deficit, expand trade,
increase investment in people and technology, and reinvent the
government to do more with less.  We pursued this strategy with
discipline.  Now we have fresh evidence that the national economic
program we put into place last year is beginning to work for America.

             The Department of Labor reported today that the
unemployment rate fell to 5.9 percent, a four-year low.  And the
economy has created about 4.6 million jobs since I took office.  More
jobs in high-wage industries were created this year alone than in the
previous five years combined.  It's not enough, of course.  As the
Census report makes clear, there are still too many Americans working
for low wages, living in poverty.  There are places in rural and
urban America where the recovery has not yet reached.

             But if you look at the changes since just a few short
years ago, when we were exporting jobs and exploding the deficit,
there's a great difference.  We're getting our economic house in
order.  Jobs are being created at home.  We're moving in the right
direction.

             This Congress, as it concludes a difficult session,
showed that it could make a difference for ordinary people when it
put people and progress ahead of narrow interests and partisan
obstruction.  It didn't always happen, so let's begin with a look at
the record:  What's been done, what hasn't been done, where do we go
from here.  Let's begin with what was accomplished.

             The economic plan passed, putting our house in order.
It was historic deficit reduction led by cutting over $255 billion in
spending; cuts in 300 separate government programs; raising taxes --
or tax rates -- on only the top 1.2 percent; cutting taxes for 15
million working families with 50 million Americans in them -- people
who work full-time, but still hover just at the poverty line -- so
that people will always be encouraged to choose work over welfare and
won't have to raise their children in poverty if they do.

             We've broken down trade barriers; eliminated barriers to
exports; passed NAFTA.  Exports to Mexico are up 19 percent; exports
of cars and truck up 600 percent in the last year.

             They talked for more than a decade around here about
making government smaller, but it never seemed to happen.  Well, now
it is.  Under our legislation we are shrinking federal positions and
cutting the federal work force by 272,000, to its smallest size since
the Kennedy administration.  And now, again I say, private sector
jobs are going up, the deficit is going down.

             For the first time in a generation we have taken a
serious assault on crime, passing the Brady Bill and the crime bill
with its 100,000 prison cells, its 20-percent increase in police on
the beat, its ban on assault weapons, its three strikes and you're
out and other penalty laws.

             The government is beginning to work for ordinary
citizens in important ways.  That's what the Family Leave law was
about.  That's what the law which will provide immunizations for all
children under two by 1996 is about.  That's what Head Start for
200,000 more kids is about.  That's what the national standards of
educational excellence with more local control; apprenticeships for
kids who don't go to college; national service, so people can earn
money for college and serve their communities; and making college
loans more affordable for 20 million people who can now have lower
interest rates, lower fees, longer repayment schedule.  It's what the
empowerment zones in the community developments banks to bring free
enterprise to poor communities are about.

             All of this was real progress.  It's only a beginning,
and more could have been done.  But too many times, an idea for
creating jobs, reforming government, educating students or expanding
income, fighting crime or cleaning up the environment or reforming
the political system was met by someone trying to stop it, slow it,
kill it, or just talk it to death.

             A lot of the same people just recently signed that so-
called "Contract with America" -- a commitment to taking us back to
the Reagan-Bush years when we exploded the deficit, cut Medicare, cut
taxes for the wealthiest in America, divided our citizens and sent
our jobs overseas.  My contract with the American people is for the
future -- grow the economy, fight crime, take on the tough problems,
make government work for ordinary people.

             Congress is leaving town without passing GATT, the
world's largest trade agreement.  It will cut global tariffs and,
over the next decade, means a $744-billion tax cut.  It will generate
hundreds of thousands of new jobs for American workers.  It will keep
our recovery going and sustain growth all around the world.  We must
not retreat on GATT.  That's why I've asked Congress to return and
pass it after the election, and I believe they will do that.

             But Congress had a chance to do a lot of other things
which it should have done but didn't do.  It should have passed
significant environmental legislation, much of which has the support
of both American people and industry and environmental groups.  It
should have passed health care reform instead of watching another
million Americans lose their coverage, as the new data points out
happened just last year, while costs increased faster than inflation
and more citizens lose the right to chose their doctor.  And it
certainly should have passed political reform.  I think the American
people were appalled by the spectacle of lobbyists hiding who they
work for, what they get paid, and by members of Congress accepting
their gifts and then walking away from lobbying reform.

             There's something wrong when a senator can filibuster
this bill and walk off the floor of the Senate and be cheered by
lobbyists.  Well, the Congress is the people's Congress.  The
lobbyists may have been cheering in the filibuster last night, but
the American people were not.

             So Congress has done well on the economy, on crime, on
tax fairness, on education and training, on trade, on loans for the
middle class, on family leave, on reinventing government.  Congress
has not done well on political reform, on environmental legislation,
on health care, and on an unprecedented record of using the
filibuster and other delaying tactics to try to keep anything from
being done.

             We have to now resolve to give the American people a
choice as Congress leaves town and we move into the next few weeks
before this election.  Do they really want this contract which is a
trillion dollars of unfunded promises; a contract which certainly
will lead to higher deficits, cuts in Medicare and throwing us back
to the years of the '80s when we lost jobs and weakened our country?
Or do we want to face up to the challenges which were not met in this
Congress, and use the next Congress to keep the economic growth
going, to pass health care reform, to pass welfare reform, to pass
political reform, to deal with these environmental issues?

             You know, countries all over the world want America to
succeed and want to follow our lead.  We saw it just in the last few
days when the elected democratic Presidents of South Africa and
Russia were here working with us on their common futures and their
aspirations.  We see it in the help we've been asked to give to the
peace process in Northern Ireland.  We see it in the help we've been
asked to give to the peace process in the Middle East.  We see it in
the enthusiastic reception our young men and women in uniform have
been given by the people of Haiti who want their democracy back.

             I am proud of the work America has done around the world
in the cause of democracy.  I am proud of what our troops have done
in the last three weeks in Haiti.  As I said -- and I caution you
again -- there job is still difficult and dangerous, and we still
have a lot of work to do.  But the violence is down, the Parliament
is back, the refugees are returning, the electricity is burning
again, and democracy is coming back.  This is the direction we ought
to be taking at home as well as abroad -- fighting for the future,
not going back to the past.

             Helen.

             Q    Mr. President, while acknowledging your
accomplishments, the Republicans are savoring a big-time victory in
November.  You also have had some major setbacks in legislation.  And
some of the pundits are counting you out in '96.  How do you account
for this very dark picture, political picture, and what are you going
to do about it?

             THE PRESIDENT:  Well, what I'm going to do is go out and
make sure the American people understand what the choice is.  If the
American people had been told 20 months ago that we would have had a
historic first year with the Congress, that we'd have 4.6 million new
jobs, the lowest unemployment rate in four years, an unusual number
of high-wage jobs coming back into the economy, a serious assault on
crime, that I would have presented major reform legislation in all
the areas I've mentioned, plus the welfare reform bill I sent to
Congress that I expect to pass next year to end welfare as we know
it, I think they would have been well pleased.  And I think when they
see what has been done and that we are going in the right direction,
and then they see the alternative, the clear alternative -- partisan
gridlock by the Republican congressional leadership -- I know you may
say, well, some Democrats didn't vote with you, Mr. President, on
campaign finance reform and lobby reform, and you would be right.
But look at the record.  Most Democrats, on these filibuster votes,
voted for campaign finance reform; most Republicans voted against it.
Most Democrats voted for political reform; most Republicans voted
against lobby reform.

             So the American people have to make a choice first about
what direction they want.  Do they really want this Republican
"Contract on America"?  Do they really want somebody to just tell
them what they want to hear one more time, instead of someone who'll
take over the tough problems?  Do they really want someone to make a
trillion dollars in promises that means higher deficits, cuts in
Medicare, the crime bill won't be funded, the economy will be back in
the dumps?  I don't believe they do want that.  They haven't had much
of a chance to see the big picture here, they just follow the daily
march of events.  In the end, this is a decision for the people to
make in '94 and in '96.

             When I showed up here, I knew that there was always a
great deal of enthusiasm for change in the beginning.  But the
process of change is difficult, exacting; it requires discipline and
confidence, and you have to stay at it.  And there are always dark
times.  There has never been a time when the organized forces of the
status quo haven't been able to drive down the popularity of a
president who really fought for change.  I'm not worried about that.
I am not at issue here.  The real issue is what is the future the
American people wish for themselves.  And I am looking forward to
having a chance to go out and say what I think the direction should
be, and then let the people make their decision.

             Q    What can you tell us about the mobilization of
Iraqi troops on the border with Kuwait?  Do you think this is just
bluster or do you think it's a real menace?  And what's the United
States prepared to do?

             THE PRESIDENT:  Well, first let me say we are watching
it very closely, and we are watching the troop movements as well as
the threats that the Iraqis have made to the U.N. mission there  .  I
spoke with General Shalikashvili just before I came over here today.
We are taking the necessary steps as a precaution to deal with this
issue.  I don't believe I should discuss them in any greater detail,
but let me say, I think they are appropriate and necessary, and we
are fully in agreement on the course we are taking.

             Iraq should not be able to intimidate the United Nations
Security Council and the U.N. mission there.  They should not be
misled into thinking that they can repeat the mistakes of the past.
If Iraq really is trying to say in some insistent way that what they
want is relief from the U.N. sanctions, there is a clear way for them
to achieve that relief -- simply comply with the United Nations
resolutions.  If they comply with the United Nations resolutions,
they can get relief from the sanctions.  There are clear rules, clear
standards.  This is not a mystery.

             So we have taken this matter seriously.  We have
responded with necessary precautionary steps.  I cannot say more than
that now, and I don't want to read more into it than has actually
happened.  But I am confident we are doing the right thing.

             Yes, Andrea.

             Q    Over the past 20 months, Mr. President, some people
would say that you have made very strong threats against the Bosnian
aggressors; that you have warned North Korea not to build even one
nuclear bomb, yet now there's acknowledgement that they at least have
one, if not more; there have been threats against aggressors in Haiti
and compromise, leaving the option for the leaders to stay there.  To
what extent would you say that it is fair criticism that Saddam
Hussein might be testing you because this country has not been strong
enough in responding to aggression and to aggressive threats?

             THE PRESIDENT:  Well, first of all, I think that if he
were testing me based on the facts that you outlined, he would have a
very gross misapprehension of the facts.  When I ran for President
and when I became President, I never said that the United States
would take any unilateral action in Bosnia.  And I defy you to find
the time when I did say that.  I said that we would work with our
allies.

             The actions of force which have occurred in Bosnia have
been largely as a result of the initiatives of the United States --
the creation of the safe havens, the use of NATO air power out of its
area for the first time in history have largely been the results of
the constant and insistent pushing of the United States.

             Secondly, with regard to Korea, I think that our actions
in Korea and our policies to date have been appropriate.  They have
been firm, they have been deliberate.  The implication of your remark
was that they had a bomb-making operation going on during this
administration.  The evidence that has been cited in some press
reports is quite different.  It is that before I became President,
they may have accumulated enough nuclear material to make a nuclear
device or two.  That has been the press reports.  I fail to see how
that shows a lack of resolve on our part since we have been here.  I
think we have pursued this course quite firmly.  We were pushing the
sanctions option if there was not a return to serious negotiations.
There has been, and I hope those negotiations will succeed.

             In the case of Haiti, I think it is absolutely apparent
to everybody that it was the literal imminence of the military
invasion which is leading to a peaceful transfer of authority there.
We have, after all, 19,000-plus troops in Haiti.  We are proceeding
with the transfer of authority.  It plainly was the result largely of
the credible threat of force that a diplomatic solution permitting
that threat of force to be instituted into the country in a peaceful
rather than a war-like manner that resulted.

             So if those are the examples, I would think that Saddam
Hussein would draw exactly the reverse conclusion than the one you
have outlined.  Secondly, I would remind you that when we had clear
evidence that the Iraqis were involved in an attempt to kill former
President Bush, the United States took decisive and appropriate
action.

             Q    Mr. President, we haven't really had a chance to
hear from you since last week, Senator Mitchell declared that there
just could be no resolution of the health care issue.  I wonder if
you could give us a sense of how you're regrouping on health care, if
you are, and whether or not you now think that you made a mistake by
proposing such broad changes, and whether you're now willing to
accept something more incremental in the next Congress.

             THE PRESIDENT:  Well, I haven't had a lot of chance to
think about exactly where we should go with this except to say that
no sooner had Senator Mitchell issued his statement then the press
reports were then full of -- oh, my goodness, we have all these
problems -- 1.2 million Americans lost their health insurance last
year, 1993; the cost is still going up at twice the rate of
inflation; people are still losing their choice of doctors.  So this
problem will not go away.

             I am very proud of the fact that we did get as much
broad-based support as we did for comprehensive reform, and that the
basic elements of this reform were supported for the first time in
history, I might add, by a heavy majority of medical providers, that
-- doctors and nurses and others -- that for the first time in
history we got a bill to the floor of both Houses of congress.

             So what we will do after Congress goes out of session is
to assess where we are and how we ought to go about this next year.
But I fully intend to keep after it.

             Let me just say one other thing.  Let me try to put this
into perspective.  We worked hard on health care for a year and a
half.  It's the most complex issue facing the Congress, but one that
has to be addressed because of its human and its budgetary and
economic implications not only for the government, where it's the
primary fueler of the deficit, but for the private sector as well.
We worked on it for a year and a half.  Since I have been here we
have broken gridlock and passed family leave after seven years, motor
voter after five years, the Brady Bill after seven year, the crime
bill after six years, the banking reform bill after seven years.
Those are just five examples of how long fundamental reform took in
areas that were more limited and less comprehensive.  I think we can
do health care -- we must do health care in less time than that.  But
if it takes one more year, I'm not discouraged by that.

             Q    Can you accept incremental reforms?

             THE PRESIDENT:  I think in the end we will have to do --
we will have to address this comprehensively.  I think the principles
I outlined have to be addressed by the country or we'll never solve
the deficit or deal with the problems in the private sector.  And I
have not had any chance to think about how to approach the Congress
with that.  I will, but I -- no one came forward with a convincing
case that we could control costs, for example, which is imperative,
without having a mechanism to cover everybody.

             But there may be some other way to do it.  I'm -- I have
always been open to any kind of new idea.  I was disappointed that
there weren't more bills introduced into the Congress in this last
session that actually offered the promise of doing that.  But I still
think we can get it next year.  I hope there will be a less partisan
atmosphere.  I hope the needs of the American people will be put
first.  And I intend to come back full force trying to do that.

             Yes, Peter.

             Q    Mr. President, going back to the upcoming campaign
-- as you yourself joked, I guess, at a reception earlier today, warm
welcomes are increasingly rare.  How do you analyze your own low
approval ratings?  And what's your advice and reaction to members of
your own party who are running away from the administration's very
record?

             THE PRESIDENT:  Well, the record is a good one.  And
there is ample evidence that if people know the record, they respond
to it.  I think what a lot of them are frustrated by the fact that
the American people don't know it.  All I can tell you is, you
analyze it.  You figure it out.  There is -- generally, there is a
period of drag that sets in on presidents at midterm.  It happened to
President Reagan in '82; it's happened in other cases.  But also I
think when people know what the choices are, they're in a better
position to make those choices.  I don't think they know that today.

             My only concern is that the American people not go out
and vote against what they're for and vote for what they're against.
I think the American people wanted us to bring this deficit down.  I
think the American people wanted us to invest more in the education
and training of the work force.  I think the American people wanted
us to make college more affordable for middle class people.  I think
the American people wanted us to pass the crime bill.  I think the
American people wanted us to pass campaign finance reform and lobby
reform.  That's what I think they wanted.

             So what the American people should do is to say, who
voted which way?  What do I want for the future?  Do I want to keep
fighting in these directions and say, okay, Congress did some good
things, and they failed to do some things they certainly should have
done?  Or do they want to go for this contract that the Republicans
have put out on America -- a trillion dollars in promises, just like
we had in the '80s, which explodes the deficits, cuts Medicare,
shifts jobs overseas and puts us back in the ditch.  I don't think
that that's the choice they'll make if they understand the choice
before them.

             Q    Mr. President, getting back to the situation in
Iraq, could you tell us how many Iraqi troops are moving?  How many
troops are involved?  Which are those troops?  Are they members of
the Republican Guard?  How far north of Kuwait are they right now?
And the second part of that question, Tariq Aziz, the Deputy Prime
Minister of Iraq, said today that Iraq is complying with all of these
U.N. sanctions.  What specifically has Iraq not done that you wanted
to do that would result in its being allowed to export oil?

             THE PRESIDENT:  Well, I think the Iraqis are well aware
of what the United States believes in terms of their sanctions
compliance and to the extent to which they are working with the
United Nations mission there.  And I would remind you that there are
other United Nations resolutions over and above the weapons
inspections ones that are usually discussed.  So I think that the
Iraqis are quite well aware of what the United Nations expects them
to do to lift the sanctions.  And if they will do it, then no one
will stand in their way of lifting the sanctions.

             In terms of the military situation, I think I have said
all it is appropriate for me to say at this moment.  We know what
they're doing.  We have responded with necessary steps.  We will
watch it very closely.  We will report more as events unfold.

             Q    Sir, the Republicans are trying to blame you for
the existence of a small air base in Arkansas.  This base was set up
by George Bush and Oliver North and the CIA to help the Iran Contras,
and they brought in planeload after planeload of cocaine there for
sale in the United States.  And then they took the money and bought
weapons and took them back to the Contras, all of which was illegal,
as you know, under the -- but tell me, did they tell you that this
had to be in existence because of national security?

             THE PRESIDENT:  Well, let me answer the question.  No,
they didn't tell me anything about it.  They didn't say anything to
me about it.  The airport in question and all the events in question
were the subject of state and federal inquiries.  It was primarily a
matter for federal jurisdiction; the state really had next to nothing
to do with it.  A local prosecutor did conduct an investigation based
on what was within the jurisdiction of state law.  The rest of it was
under jurisdiction of the United States Attorneys who were appointed
successively by previous administrations.  We had nothing, zero, to
do with it.  And everybody who's ever looked into it knows that.

             Q    Saddam Hussein has misread the intentions of
American presidents before.  Without going any further than you care
to into what may be the nature of these particular troop movements,
what can you say to him today to make sure that he does not, because
of your situation in Haiti, believe that you are perhaps vulnerable
in the way that he thought your predecessor was vulnerable and do
something that you don't want him to do?

             THE PRESIDENT:  First of all, let me -- I rarely do this
to any of you, but I thank you for asking the question in that way
because I do think President Bush's intentions were misunderstood;
not because of anything President Bush did.  And perhaps our position
here might be misunderstood not so much for the reasons that in your
question were implied, but because we do have troops in Haiti and we
are otherwise occupied.

             Saddam Hussein should be under no illusions.  The United
States is not otherwise occupied.  We remain committed to the United
Nations resolutions.  We remain committed to the policy we followed
before.  The mistakes of the past should not be repeated.  On the
other hand, I would encourage you not to inflame this situation
beyond the facts.  Let us deal with this on the facts.  We are
monitoring what has actually happened.  We are taking what we believe
is factually appropriate steps -- the necessary steps that any
prudent administration would take under the same circumstances.

             So let us watch this concern, but let us not blow it out
of proportion.  Let's just deal with the facts as they unfold.  But
it would be a grave mistake for Saddam Hussein to believe that for
any reason the United States would have weakened its resolve on the
same issues that involved us in that conflict just a few years ago.

             Q    Mr. President, to go back to domestic matters for a
moment.  You mentioned looking at the record.  I want to ask you
about one part of the record that does not look so good.  The Census
Bureau reported that through the first year of your term -- through
the end of 1993 -- median income has gone down.  The rich have
continued to get richer; the poor have continued to get poorer;
income inequality has grown -- precisely the trends that you singled
out as the reasons you were opposed to what happened in the '80s.

             Do you believe that you can reverse these trends in the
next two years of your term?  And if you cannot, how do you think
you'll be able to convince the American people that your presidency
has been a success?

             THE PRESIDENT:  Well, first of all, let me -- let's put
this in context, and that was a fair question, I think properly
asked.  These trends have been developing for nearly 20 years, as you
pointed out.  I don't think anyone thought I could turn them around
in a year, or that I alone could turn them around.

             And let me try to be clear about where I think
responsibility lies here, because I don't think it's fair to just say
that the previous administration is completely responsible for these
trends.  I think their policies aggravated them to some extent, but
more importantly, did not address them, which I think is the most
important thing.

             What is happening in America that would lead incomes to
go down or be stagnant among people who actually work full time?  And
how could it continue even in a period of economic expansion?
Indeed, how could it have continued through expansions for 20 years?
That is the question.  The answer, it seems to me, is to be found in
the following facts.

             Number one, for about 30 years we have had a problem
developing primarily in our urban areas and our very rural areas
where there was disinvestment of economic opportunity coupled with
the breakdown of traditional family structures and community
structures, so you had a lot of people growing up and living in
places where the only jobs available were low-wage jobs, or where
there were relatively -- there were too few good jobs.  That's been
going on for about 30 years.

             Number two, compounding that, for about 20 years,
American jobs overall, certainly hourly-wage jobs, have been set more
and more and more in the context of a global economy; so that to
whatever extent a person has a job in America that can also be done
by somebody somewhere else living on a much, much lower wage, that
person will be under great pressure either to lose the job or to have
the wage lowered, or at least never to get a wage increase.

             What is the answer to the problem and how might it be
fixed?  I think there are three answers, and we're pursuing all of
them as best we can.  First, increase the level of education and
training of the work force and make it more permanent for a lifetime.
That's why we had the apprenticeship program; that's why we have the
college loan program; that's why I'm trying to pass the reemployment
system legislation that I introduced this year, but I think it will
pass next year.  In other words, develop a system to raise the skill
level of the work force and the wages will rise.

             Secondly, follow policies that will change the job mix
in America, that will tend to get more high-wage jobs here.  That's
why I believe so strongly in expanding trade.  In the United States
when we expand trade, it drives the wages up, up.

             The third thing we have to do is to bring free
enterprise to the inner cities and the isolated rural areas.  That's
what the empowerment zones are about; that's what those community
development banks to make loans to low income people are about.  Will
that all change the income distribution in two years or three years?
I don't know.  I know we've been going in this direction for 20 years
and we can certainly change it back the other way in less than 20
years.  But again I will say, we have to stay on this course.  If we
change course in this mid-term election, and decide that instead of
investing in education, expanding trade, and empowering the inner
cities and poor people, we're going to explode the deficit, give
another tax cut we can't pay for, and cut Medicare -- and, by the
way, cut all other programs, including education and training and the
crime bill.  We'll be going in the wrong direction.

             So the voters are going to decide whether this is the
right direction and I hope that they will decide that it is.

             Q    Did you know when you nominated Secretary Cisneros
that he was making payments to a former mistress?  If you did, did
you ask any questions about them?  And, finally, do you think the
recent controversy about them undermines his effectiveness in your
Cabinet?

             THE PRESIDENT:  We knew what the facts were at the time
and the legal counsel or the people -- excuse me -- who were handling
it for me reviewed it, decided that there was nothing illegal or
inappropriate about what was done by Secretary Cisneros -- something
that was fully know by his family.  And, no, I don't think it
undermines his effectiveness.  I mean, what he did in his past he's
dealt with, and he's been pretty forthright.  He's been, in fact, I
think painfully forthright.  And I think he has been an
extraordinarily gifted HUD Secretary.  He has proposed initiatives
heretofore unseen to house the homeless, to empower people who are
stuck in these public housing projects, to sweep the projects of
weapons and drugs.  He is doing the job that I hired him to do for
the American people.  And as long as he is doing that job at a high
level, I think he ought to be permitted to continue to do it.

             Q    Mr. President, the Haitians in Guantanamo at least
knew that you were working hard to get them out of there.  What is
the hope for the Cubans in Guantanamo?

             THE PRESIDENT:  I'm sorry, what was the first part of
your question?

             Q    The Haitians in Guantanamo -- they knew that you
were working hard to get them out of there.  What is the hope for the
Cubans in Guantanamo?

             THE PRESIDENT:  Well, we're working on that, and we're
talking to them about that.  As you know, some of them are going to
Panama; some of them will have to decide what it is they wish to do.
Of course, any of them who go back to Cuba would be eligible to apply
to come to the United States legally now under a much higher ceiling.
And we think a substantial number of them would be in the category of
people who could get in because of their family connections in the
United States and the broadened definition of family connections
under the new agreement, which raises the ceiling to 20,000 people
we're taking in.

             Also, some of them are children or otherwise vulnerable,
and we're looking at them to see whether there should be any special
considerations for them.

             Yes, Mike.

             Q    Mr. President, you promised the middle class a tax
cut two years ago during the campaign.  Will you be able to keep that
promise in the next two years?

             THE PRESIDENT:  I can't give you an answer today because
it depends upon how well the economy goes and what other
considerations there are with the budget.  And let me just give you
an example of that.

             In this budget, because we began with a deficit that was
bigger than we expected, the middle class tax cut essentially was
capped at 15 million families, comprising about 50 million Americans,
or only about 20 percent of our population.  Would I like to do
better than that?  Yes, I would, but not at the expense of the
economic recovery for the same middle class.  So what we are looking
at now in the context of the welfare reform legislation, the child
support enforcement legislation, the other things we're trying to do
to strengthen families is:  Whether and to what extent we can address
that issue.  What are the revenue projections for the next two years.
What are the other demands on state spending -- government spending,
I mean.  How much can we control the other costs.  What do we
absolutely have to do for defense, because that's very important as
we've all seen in the questions you've asked me in this press
conference.

             So I cannot give you an answer.  Do I think it should be
done?  I still do.  I don't think -- the federal tax system is much
fairer than it was when I became President because of the tax cut for
the working families just above the poverty line; and also because
something we often forget -- we made 90 percent of the small
businesses in this country eligible for a tax cut last year in the
economic plan.  Any small business with a taxable income below
$100,000 was also eligible for a tax cut.

             So I think we're doing better.  But the tax code is not
where it ought to be in middle class families, especially those with
children, I think should look forward to a little more fairness, but
I can't say how and how much yet.

             Q    Despite the economic expansion and the record
you've been citing here today, the political mood in the country
remains extremely sour.  Your poll ratings are very low, but you're
far more popular than the people up on Capitol Hill.  How can you go
out to the public, as you're going to do in the next couple of weeks
and argue that given the rate of failure, the record of failure you
cited today, the people up there should be reelected, and that
staying the course that is underway right now is good for the
country?

             THE PRESIDENT:  Well, it's easy to argue that staying
the course we're underway right now is good for the country because
these two years compare so favorable with the previous several in
terms of economic direction, investment in people and making
government work for ordinary folks.  That's easy to argue.

             What I think is important is to take the message to the
American people in terms of what's good for them and what changes
they want.  In other words, the election should be about them and
their future and what changes they want, not necessarily about
whether the parties are ideal or perfect or whatever.

             We're going through a period of change.  The American
people are not satisfied either with the rate of change or with the
certainty that it will occur.  And they, like everybody else -- I
mean, after all, you can't -- the people are of more than one mind on
more than one issue.  That is, all these interest groups that
everybody reviles when they want campaign finance reform or lobby
reform are the same people that have the money and the organized
communications ability to change the attitudes of the people out
there on issue after issue after issue.

             So the important thing and the message I have to say is,
what is the direction you want?  Do you want continued progress in
the economy?  Do you want a government that takes on tough problems
like crime and welfare reform and health care?  Do you want a
government that does things for ordinary people, like the Family
Leave law or making college loans more available to middle class
people?  Or do you want this contact, which says clearly, give us
power and we'll take you back to the '80s; we'll give you a trillion
dollars worth of promises; we'll promise everybody a tax cut; we'll
explode the deficit; we'll cut Medicare; we'll never fund the crime
bill; but we will have told you what you wanted to hear?  I think the
American people will vote for the future and not the past, and that's
my hope and belief.

             Q    Mr. President, a question about bipartisanship.
Looking back on the health care reform effort, is there anything you
think you could have done differently to forge a consensus?  For
instance, do you think it would have helped if you'd brought
Republicans earlier on in the process up to the White House to
negotiate the way you did at the end of the crime bill fight?  And
looking ahead to next year when you're going to be pushing health
care reform and other issues through a more Republican Congress, is
there anything that you plan to do differently to forge a coalition
for governing?

             THE PRESIDENT:  Well, let me say, I'm sure that there
are some things I could have differently.  You know, I never dealt
with Congress before last year and I'm still learning all the time.
I would point out that the Congressional Quarterly said that last
year that the Congress and the President worked together more
successfully than at any time since World War II except in President
Eisenhower's first year and President Johnson's second year.  So I
felt that we accomplished quite a great deal.

             When we were putting this health care bill together,
there was a lot of consultation with Republicans.  When we wanted to
present a proposed bill and say, now, how would you like to change
this, we were told that they had their own group working on health
care and they wanted to present a bill and then we would get
together.  So I said, that's fine; I understand that.  Then Senator
Chafee, to his everlasting credit, came up with a bill that had two
dozen Republican senators on it that would have covered all Americans
and controlled costs.  By the time we got down to serious
negotiations, instead of two dozen senators for universal health care
and controlled costs, there were zero.  They all left.  I mean,
Senator Chafee was still there, but everybody had abandoned his bill.
We had one Republican congressman saying they'd all been instructed
not to work with us.  We had one Republican senator quoted in one of
your papers saying that they had killed it, now they had to keep
their fingerprints off of it.

             So I am more than happy to work with them in any way I
can.  I do not believe we have a monopoly on wisdom.  Let me give you
some evidence of my good faith on being flexible about changing.  I
have given state after state after state waiver from federal
regulations to pursue universal coverage and health care costs
control on their own.  Tennessee has done some very exciting things,
and by the way, gotten some very impressive results I understand.  We
just approved Florida to do this.  We're in the process of approving
more states to move forward.  I am very flexible on how we get this
done.  And if the American people are worried that the federal
government has too much emphasis and they want more for the states,
fine, let's talk about that.  But if there's going to be a bipartisan
effort, it has to be good faith on both sides.

             I like working with Republicans.  I proved that in the
NAFTA fight, proved it in the crime bill fight.  I will prove it in
the health care fight.  But it can't be a kind of situation where
every time I move to them, they move further the other way.  That's
the only thing I would say.

             Q    Yes, sir, last question.

             Q    Mr. President, for Secretary of Agriculture, will
you be looking for someone with farm experience, or will you be
looking for somebody like Secretary Espy, who has heavy congressional
experience?

             THE PRESIDENT:  Well, the most important thing, I think,
is someone who really understands how to deal with the agriculture
community, understands the interests and is committed to agriculture
and to farmers and to rural development.  And let me say, if I might,
in closing, that I also want somebody who will faithfully implement
the reforms that Secretary Espy has started.

             We passed a dramatic restructuring of the Department of
Agriculture.  We're going to take down the number of employees by at
least 7,500.  We have seen an Agriculture Department that has been
extremely active in helping farmers deal with disasters; that has
tried to help the farmers in the Middle West with their production
problems; that has given an enormous amount of emphasis to rural
development.  So this Agriculture Department, under this Secretary of
Agriculture, has established a lot of credibility with the American
people who are in agriculture, including selling rice to Japan for
the first time, selling apples from Washington to Japan for the first
time, doing things that haven't been done for a long time for
hardworking, grass-roots farmers, whether they're Republicans or
Democrats or independents.

             And when I came here, out of a rural background, out of
a farming background, that's what I desperately wanted to do for the
agricultural community.  And so when I pick another Agriculture
Secretary, that is a standard that Mike Espy set that must be met for
the next Agriculture Secretary.

             Thank you very much.

                                 END2:46 P.M. EDT