Bill Clinton: “I want to answer it, but I'd like to ask for--where did those charts go? Are they still up here? I just wanted the first…”

“I want to answer it, but I'd like to ask for--where did those charts go? Are they still up here? I just wanted the first one back to try to highlight the point you're making. Just bring me back the first one, the one with the red and blue lines. This is what he's talking about. This line here ought to go down to here. And I want to answer your question, but I've got to put it into context. This deficit here is actually about--it's more, it's about-- it's over 5 percent of GDP, and we're going to cut it from 5.2 down to about 2.7 or 2.6 here, to a pretty good cut. But it does continue to increase the total national debt by what's down here. Now, in the mid-seventies, I started looking at what other countries had done on this. This is not an unusual problem for a Western country with a lot of support systems coming out of the Government and difficulty generating jobs and income. I mean, a lot of these Western countries are in the same shape we're in, and I include Japan with that. Japan had a huge operating deficit in the mid-seventies. And they had a 10-year plan to bring it into balance which they did over a 10- year period, thinking that to rush it any faster might cause a recession, but to delay it would be a terrible mistake. So I thought to myself, maybe we could do it in 8 or 9 or something like--in that range, if we could just deal with this. This is where you have to take the curve down. Now, to get the curve down, I can just tell you, we have to do a number of things. But let me say what we cannot do and then what we must do, and then I'll come back to your cap device. There is a limit to how much we can responsibly cut defense within a short time. I think we are right at that edge. I do not want to cut any more in this 5-year budget. Based on what we now know, we are at that limit, unless there--the only other way you can do it that I know of is the Vice President has this reinventing Government task force on. If we can have significant procurement reform, we might be able to have some savings. But in just terms of ``slash and burn,'' we don't need to do any more in my opinion. Secondly, as I said earlier, there are some things that any government has to do to maintain its competitiveness. And thirdly, there are just human concerns that have to be taken care of, even though they're subject to constraints of the budget. For example, a lot of people don't know this, but actual out-of-pocket costs on welfare and food stamps haven't kept up with inflation in the last 10 or 15 years. The reason those costs have gone up is that there's a whole lot more poor people. You've got 1 in 10 Americans on food stamps now. But this number, anyway, to go back to his comment, is being driven by two things. One is the entitlements and the fact that things like retirement, wages, Social Security, and whole lot of other things have automatic cost escalators. The one that is not a problem is Social Security. Social Security is no more of our national income than it was 20 years ago, and the tax is higher. And it's producing a $60 billion a year surplus that makes our deficit look smaller than it is. If anything, the payroll tax is too big. But it is producing that. On the income tax side, what you've got, though--here's the problem with paying for the rest of that stuff that's paid for with income taxes. We are now indexing income taxes, which is fair. That is, people don't get pushed into higher brackets by inflation. But the flip side of that is, if you index income taxes downward and you index income upward for people who are getting tax money, you don't have to be a mathematical genius to realize that there is a conflict there. Then, if you have health care costs increasing at 2 and 3 times the rate of inflation--because you've got more people on the Government rolls, about 100,000 a month losing their health insurance; you have more people on the Government rolls, prices going up and the ability to churn the system, if there's a fee-for-service system, you've got some real problems. There are several suggestions which have been made that would essentially require us over the next 5 years to adopt a disciplined system of bringing the cost of entitlements in line with inflation, plus population, to be fair. They're all acknowledging that if there's a growth in poverty or an unexpected downturn in the economy, we would take that into account. I would be open to that as a part of the health care reform issue. That is, what I would like to see is the budgetary discipline on the entitlement issue taken up with health care reform for this reason: If we impose the entitlement caps and we don't face health care reform because it's too controversial or we can't bear to do it, then if the entitlement caps trigger, we will be massively shifting our cost to you, like I said earlier. The other tough decisions can be made within the budget discipline. But the health care cost issue which is driving it, in my judgment, should be dealt with at the time we impose the overall entitlement restrictions over a 5-year period. That protects the employers and the employees of the country from having mass cost-shifting and forces us to make the tough decisions in Government. But anyway, I know it's a long answer, but I had to explain it in the context that we're operating. There was a question over here, I think. Superfund”