THE WHITE HOUSE
Office of the Press Secretary
For Immediate Release July 31, 1998 11:57 A.M. EDT
REMARKS BY THE PRESIDENT
ON THE ECONOMY
The Rose Garden
THE PRESIDENT: Good morning. I want to thank the Vice President, Mr. Bowles, and our economic team for joining us today to talk about the continuing strength of our economy and what we have to do to make it stronger as we move toward a new century.
Five and a half years ago, we set a new strategy for the new economy, founded on fiscal discipline, expanded trade, and investment in our people. Today our economy is the strongest in a generation. While the latest economic report shows that growth in the second quarter of 1998 was more moderate than the truly remarkable first quarter, it shows that our economy continues to enjoy steady growth. So far this year, economic growth has averaged 3.5 percent. This is growth the right way, led by business investment and built on a firm foundation of fiscal discipline.
We've also learned today that since I took office the private sector of our economy has grown by nearly 4 percent, while we have reduced the federal government to its smallest size in 35 years. Wages are rising. Investment and consumer confidence remain high. Unemployment and inflation remain low. Prosperity and opportunity abound for the American people.
In the long run, we can keep our economy on its strong and prosperous course. Our economic foundation is solid, our strategy is sound. Still, we know from events that, more than ever, the challenges of the global marketplace demand that we press forward with the comprehensive strategy we began six years ago.
First, we have to maintain our fiscal discipline. This week marks the fifth anniversary of the 1993 economic plan that charted our course to a balanced budget and reduced the deficit by over 90 percent by the time we signed the Balanced Budget Act in 1997. This fiscal discipline has had a powerful, positive impact, driving interest rates down, pushing investment to historic levels, creating a virtuous cycle of economic activity that has helped cut the deficit even further. We must hold a steady course, and we should not spend a penny of the surplus until we have saved Social Security first. Fiscal discipline helped to build this strong economy; fiscal recklessness could undermine it dramatically. We must use these good times to honor our parents and the next generation by saving Social Security first.
Second, we must continue to investment in the American people. Five years ago I said we had to close two gaps, one in the budget and the other in the skills of our people. Now, as we hear of a shortage of highly skilled workers all across our country, we have more confirmation that America simply must do more in education and training. To fill those high-wage jobs, we must have a training system that works.
In 1995 I put forward a comprehensive proposal to modernize, overhaul, and streamline our job training programs. I called it a G.I. Bill for America's Workers. With bipartisan
support, Congress is now poised to finish the job. I was so pleased by the bipartisan overwhelming vote in the Senate last night for the G.I. Bill. And I look forward to prompt House action and to signing the bill into law soon. Congress must continue this path to progress without partisanship. They should abandon plans to make drastic cuts in our nation's education budget. An investment in education is clearly the most important long-term economic investment we can make in our future.
The third thing we have to do is to lead the world in this age of economic interdependence, and we have to do more there. More than a quarter of our economic growth during the past five years has come from exports. One of the reasons that growth moderated in the second quarter is because we are feeling the direct, discernible effects of the Asian economic downturn. Simply put, the health of the Asian economy affects the health of our own. Just with our grain crops, about half of that crop is exported, and about 40 percent of the exports go to Asia.
We have seen, therefore, this impact already in our rural communities. And I've talked about that quite a bit in the last couple of weeks. The Asian financial crisis has literally led to a 30 percent decline in farm exports to Asia.
The International Monetary Fund is designed to support necessary reforms in those economies, to help them help themselves, and to restore growth and confidence in their economies.
Now, I also want to say something that you all know -- it is especially important for Asia and for our economy that the new Japanese government move forward quickly and effectively to strengthen its financial system and stimulate and open its economy. It is going to be very, very difficult for Asia to recover unless its leading economy, Japan, leads the way. I welcome the election of the new Prime Minister, as well as a former Prime Minister with whom I have worked, Mr. Miyazawa, as the new Finance Minister. I am looking forward to talking with the new Prime Minister tomorrow.
And again, I remind the American people of our long friendship and partnership in so many ways -- political, security, and economics -- with Japan. We want to work with them and we hope that this new government can find the keys to restore to the Japanese people, who have a great economy and a great society, the growth that they deserve.
Finally, let me say, we must do our part. That is why a commitment to the International Monetary Fund is an investment not simply in other countries and their reform, but in our own economy. We have to grow this economy by selling things to other people. They need the money to buy our products. That is why Congress should step up to its responsibility, put, again, progress ahead of partisanship, and renew our commitment and pay our fair share to the IMF. I urge Congress to do this quickly and not to put at risk our prosperity.
Open and fair trade, a balanced budget, saving Social Security, better education, and higher skills -- the strategy that has boosted our economy for five and a half years will boost it further as we boldly move into a new century. I will continue to do everything in my power and to work as hard as I can with Congress to strengthen an economy that offers opportunity to all, a society rooted in responsibility, and a nation that lives as a community with each other and with the rest of the world.
Again, I want to say to all the economic team how much I appreciate the special and the difficult work we have done these last months as our country has coped with the General Motors strike -- which, thank goodness, has now concluded on successful terms -- and with the problems in Asia and elsewhere.
Thank you very much.
Q Mr. President --
Q Mr. President --
THE PRESIDENT: Wait, wait, wait. Everybody has got a question. Let me give you answer to all of them.
Q You didn't hear --
THE PRESIDENT: I know -- yes, I did, I heard of all you shouting about it.
No one wants to get this matter behind us more than I do -- except maybe all the rest of the American people. I am looking forward to the opportunity in the next few days of testifying. I will do so completely and truthfully. I am anxious to do it. But I hope you can understand why, in the interim, I can and should have no further comment on these matters.
Thank you very much.