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administrative marker by the William J. Clinton
Presidential Library Staff.
Collection/Record Group:
Clinton Presidential Records
Subgroup/Office of Origin:
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Series/Staff Member:
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Economic Conference
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�Economic ·Conference
of the President and
Vice President:
· Briefing Papers on
Select Administration
·Policies
�BRIEFING PAPERS
ON SELECT ADMINISTRATION POLICIES
•
BRIEFING PAPER 1: THE NATIONAL ECONOMY
BRIEFING PAPER 2: REINVENTING GOVERNMENT
BRIEFING PAPER 3: REWARDING WORK FOR WORKING FAMILIES
A.
B.
C.
D.
E.
· Earned Income Tax Credit
Raising the Minimum Wage
The Family and Medical Leave Act of 1993 ·
Welfare-to-Work
Child Support
BRIEFING PAPER 4: LIFELONG LEARNING
A.
B.
C.
D.
E.
F.
Pre-school: Head Start Reform
GOALS 2000
School-to-Work Opportunities
National Service
Individual Education Accounts/College Loans
New Skills for New Economy
BRIEFING PAPER 5: INTERNATIONAL TRADE
A.
B.
Tearing Down Trade Barriers
Helping American Business Do Business
BRIEFING PAPER 6: BUILDING SAFER COMMUNITIES
•
A.
B.
C.
D.
E.
F.
100,000 New Police Engaged in Community Policing
The Brady Act
Assault Weapons Ban
Stiff Penalties for Violent Offenders
Violence Against Women
National Police Corps
�BRIEFING PAPER 7: COMMUNITY EMPOWERMENT
A.
B.
Empowerment Zones and Enterprise Communities
Creating a National Network of Community Development Banks and
Financial Institutions
BRIEFING PAPER 8: HEALTH CARE
A.
B.
C.
D.
E.
Health Care Reform
Special Supplemental Nutrition Program for Women, Infants and Children
Childhood Immunizations
HIV/AIDS
Women's Health
•
BRIEFING PAPER 9: ENVIRONMENT AND PUBLIC HEALTH
A.
B.
C.
Protecting Public Health
Taking Re$ponsibility for Our Land and Water
International Leadership
BRIEFING PAPER 10: A STRONGER, ID-TECH DEREGULATED ECONOMY
A.
B.
C.
D.
E.
F.
Improving the Nation's Infrastructure
The Information Superhighway
Technology for Economic Growth
Interstate Banking
Trucking Deregulation in 1994
Small Business
BRIEFING PAPER 11: PROTECTING OUR NATION'S SECURITY
A.
B.
C.
D.
E.
F.
Keeping Our Military Strong and Ready to Fight
Reducing the Threat of Nuclear Weapons and Other Weapons of Mass
Destruction
Advancing Regional Security
Acting as an Effective Peacemaker and Mediator
Promoting Democracy
Confronting Transnational Threats
•
�1. THE NATIONAL ECONOMY ·
•
Today, America's economy is as strong as it has been in a generation. Over the past
two years, the budget deficit has dramatically declined, trade barriers have come down,
growth has .been strong, investment in productive equipment has increased at record rates,
private sector job growth has been impressive, and inflation has remained moderate. Yet
for all this progress, many working families still feel that the economy is not working for
them. ·wages have been stagnant for twenty years. Too many Americans lack the
education and lifelong training opportunities they need to· succeed in the new economy. .AI1d
too many working families feel that with the costs of health care, child care, housing, and
education, they are running faster and faster just to stay in place.
This overview chapter discusses the economy that President Clinton inherited, the
results of his economic plan, and the Administration's responses to the continuing struggles
of working families. The chapter is divided into four sections. Section I discusses the
economy President Clinton inherited. Section II details the progress over the last two years.
Section III discusses the challenges that remain to make the economy work for working
families. Section IV provides an overview of the President's policies for the future, with a
summary of the four main proposals in the President's Middle Class Bill of Rights,
included in his 1996 budget.
•
1-1
�A. THE ECONOMY AND FISCAL ENVIRONMENT:
WHERE WE WERE
When President Clinton took office on January 20, 1993, his top priority was
restoring America's economic health. The nation faced five fundamental challenges: first,
an economy with extremely weak job growth; second, an escalating deficit and bloated
federal bureaucracy; third, a tax system widely perceived as unfair; fourth, stalled trade
agreements; and fifth, inadequate investment in our people. Confronting these basic
challenges was essential--not only ~o revitalize the economy in the short-term, but also to
address the long-term problem of stagnant wages for the middle class and working poor.
1. Anemic Job Growth: While the economy was expanding in 1992, nine million
people remained out of work, and the unemployment rate topped seven percent.
There were no signs that the jobs situation was improving: the economy was
creating only 34,000 private sector jobs per month, hardly a booming recovery.
Experts said that the nation was in a "jobless recovery," which most families said
was no recovery at all.
2. Escalating Deficits: The challenge of recovery was made all the more difficult by
the huge budget deficit that the President inherited. In the previous twelve years, the
federal debt -- the total of all the yearly deficits -- quadrupled from less than $1
trillion to more than $4 trillion. Worse still, the deficit as a percentage .of the
economy (GOP) was at consistently high levels throughout the 1980s. The U.S. had
achieved the dubious distinction of going from the world's largest creditor nation to
the world's largest debtor nation in record time. Moreover, the deficit was projected
to grow rapidly -- even if the economy continued to recover -- if tax and spending
laws remained the same. For all these reasons, the President believed that his first
budget had to reverse the growth in the deficit--and restore fiscal sense and
accountability.
3. Tax Fairness: Americans also rightfully believed that the tax system had become
less fair, leaving middle-Class families to bear the burden of fiscal irresponsibility.
Marginal tax rates for the highest-income Americans had declined substantially over
the past decade, yet working families were not enjoying the benefits of lower rates
because of increased payroll taxes. While the average tax bill for the wealthiest 1%
of Americans dropped by over $30,000 between 1977 and 1989, taxes for the
bottom 60 percent of Americans remained static--or even increased.
4. Stalled Trade Agreements: Two major efforts to open world markets for
. American goods were in jeopardy. Passage of the North American Free Trade
Agreement (NAFTA) seemed Unlikely. And the Uruguay Round of GATT was
stalled after seven long years.
1-2
�5. Inadequate Investment in People: In a changing economy, Americans
recognized that the key to raising living standards was enhancing the education and
training of the American people. Yet the 1980s saw little federal effort to improve
or expand pre-school education, K-12 school reform, school-to-work opportunities,
college access, or lifelong learning for Americans already in the workforce.
B. THE PRESIDENT'S FIVE YEAR ECONOMIC PLAN OF 1993
The President's economic plan sought to address all of these fundamental problems-·(
the economy, controlling the deficit while reinventing government, lowering
trade barriers and expanding exports, restoring tax fairness, and increasing the investments
in people needed to raise the incomes of all Americans in the long-term.
rei~vigorating
I. CUTTING THE DEFICIT AND UNNECESSARY SPENDING
When President Clinton began his term, the deficit was at its highest dollar level in history:
$290 billion, equal to nearly 5 percent of all of the income generated in the economy.
Worst of all, without a fundamental change in policy, the deficit would grow even larger: to
over $400 billion by 1999, and over $600 billion by early in the next century. Such an
exploding deficit could not be sustained. Interest rates would rise, driving the deficit still
higher, and sending the economy. spinning out of control. Yet there was little expectation
among either average citizens or the global fmancial markets that Washington would make
a serious effort to bring the deficit down. This lack of confidence hurt America's clout
internationally and led to higher interest rates --even in our then-weak economy --because
investors feared that the deficit would only get worse.
•
To meet the threat posed by the massive deficit, the President came forward only 27 days
after his inauguration with a line-by-line, specific plan for half a trillion dollars of deficit
reduction. Over the next eight months, the debating, lobbying, and criticism were intense,
but when the dust settled on Augtist 6, 1993, Congress had passed the President's economic
plan, including the largest deficit reduction package in history -- $505 billion. The plan cut
over $255 billion in spending and over 300 domestic programs. yet it also included tax
relief for over 15 million families earning under $28,500, made millions of small businesses
eligible for tax cuts, and increased investment in education and technology. Only the top
1% of individuals and corporations saw their income taxes increase.
•
1-3
�As a result of the deficit reduction plan: :
• The federal civilian workforce is declining by 272,900 employees over five years -- to
the lowest level since John Kennedy was President.
• The deficit is coming down for three years in a row, the first time since Harry Truman
was President.
•
• The deficit is being cut in half as a percentage of our national income.
• In 1994, the deficit was over $100 billion less than projected before the President's
economic plan was passed.
• In 1993 and 1994, the deficit declined by more than during any other .two year period in
history.
• There is about $10,000 less debt per family of four because the passage of the President's
economic plan.
• If not for the interest on debt accumulated during the twelve years prior to his
Presidency, President Clinton's budget would not only be balanced--it would be in surplus.
"The actions taken last year to reduce the federal budget deficit have been instrumental
in creating the basis for declining inflation expectations and decreasing pressures on
long-term interest rates. Although we may not all agree on the specifics of the deficit
reduction measures, the financial markets are apparently infe"ing that, on balance, the
federal government will be competing less vigorously for private saving in the years
ahead Partly because of these structural adjustments, the foundations of the economic
expansion are looking increasingly well-entrenched. "
Alan Greenspan,
Federal Reserve· Board
January 31, 1994
II. RESTORING TAX FAIRNESS
There has been considerable misinformation about the taxes in the President's economic
package. Tax increases fell overwhelmingly on upper-income Americans. The taxes of
middle-class Americans were basically untouched, and taxes for the working poor declined
dramatically. The only tax increase that affected working families with children was a
small. 4.3 cents tax on gasoline that costs the average family only three dollars per month.
As financial experts recognized (see box), income tax rates increased only for the top 1% of
1-4.
--------
- - - -
•
•
�individuals and corporations. The President cut taxes for millions ofsmall businesses and
working Americans.
•
•
Two of the tax cuts in the President's plan were especially notable:
Earned Income Tax Credit-- A Rewarding Work Tax Cut. The expansion in the
Earned Income Tax Credit represented a dramatic change in the way the tax system
treats families that work hard and play by the rules but earn a limited income. The
EITC provides a tax break averaging $1,000 per household to 40 million people in
15 million families earning under $28,500. These are families working hard to stay
out of poverty and off welfare. The Earned Income Tax Credit could better be called
the rewarding work tax cut.
Small Business Tax Relief. The economic plan also expanded the expensing limit
for small businesses from $10,000 to $17,500. As a result, the plan lowered taxes
for over 1 million small businesses in its first year alone -- and likely several million
more over the next few years. In addition, the plan also gave a special capital gains
tax cut to prospective investments in new equity held for five years or longer in
small businesses.
Ill. EXPANDING TRADE
Due to strong bipartisan support and an intense effort by the President, the last two
years turned out to be perhaps the best in this century for opening trade for America.
Congress approved NAFTA, and in just one year, American exports to Mexico increased by
20%, while exports to Mexico and Canada created more than 100,000 new jobs -- jobs that
pay 13 to 17 percent more than non-exported related jobs. The subsequent passage of
GATT promises to create hundreds of thousands more export-related, high-paying jobs -adding between $100 billion and $200 billion per year to the U.S. economy when fully
implemented.
The Economic Report of the President expressed some of the scope of the
President's trade achievements:
•
•
The North American Free Trade Agreement (NAFTA) with Mexico and Canada is a
pathbreaking accord with two of our three largest trading partners; achieving a
degree of liberalization well beyond that of similar international agreements. In its
bilateral negotiations, the Administration has been forceful in seeking marketopening measures in Japan, China, and other countries and in advancing the interests
of U.S. exports through its National Export Strategy. Finally, during the second half
of 1994, the Administration helped launch negotiations that will lead to the creation
of open and free trade areas among the countries of the Western Hemisphere by
2005 and among the countries of the Asia-Pacific Economic Cooperation forum by
2020.
1-5
�While improving our own economy, the President's actions also sent a signal to the
rest of the world: the United States is assuming world leadership in world trade. As the
Economic Report put it, "The Administration's efforts ... have established an environment in
which counties feel they must participate in meaningful trade liberalization efforts or be left
out."
While pursuing expanded trade, in 1994 the United States became the world's most
competitive economy, displacing Japan as leader.
•
IV. STRENGTHENING THE RECOVERY
The introduction of the President's economic plan had an immediate positive impact
on the economy. Once investors recognized that this was a serious deficit reduction package
that would set the congressional agenda, interest rates fell, business confidence increased,
and job growth surged. Financial expert after expert confirmed the key role of the
economic plan in the renewed recovery.
The interest rate decline that came from the strong deficit reduction effort spurred
private investment. Investment in producer's durable equipment has soared at an 18.2%
annual rate since the Administration began--bringing this investment to a postwar high
relative to GOP. And in 1994, the United States also overtook Japan as the world's
number one auto producer for the first time since Ronald Reagan was President.
As the recovery solidified, the American jobs machine finally started humming.
Since the passage of the President's economic plan in August 1993, employment has
expanded by nearly 5 million jobs (272,000 per month) -- with 93 percent in the private
sector. The economy added more private sector jobs in 1994 than in the previous four
years combined--making it the best year for job growth and economic growth in a decade.
All the while, the inflation rate remained low and stable. Today, the combined measure of
inflation and unemployment -- known as the "Misery Index" -- is at its best level since
1968.
.
Built on a foundation of lower deficits that stretches across the entire U.S. economy,
America's jobs recovery has reached every economic sector. After losing 2.2 million
manufacturing jobs during the 12 years prior to President Clinton's taking office, the nation
added 284,000 manufacturing jobs in 1994. Since January 1993 1 construction
employment has grown by 540,000. In 1994 alone, the nation created more construction
jobs than in the previous nine years combined. And in the last year and a half, more than
94,000 new jobs were added in the automobile .industry, bringing auto employment to its
highest level since 1979.
It is not only the quantity of the new jobs that has improved; it is their quality. After
losing more than 170,000 jobs over four years, high-wage industries (those with average
wages above the median wage), have enjoyed a jobs rebound. High-wage industries have
1-6
•
�added well over 2 million jobs since the beginning of 1993, and last year they created more
jobs than during the previous five years combined.
•.
.
Since the President took office, the unemployment rate has fallen from over 7 to 5.4
percent -- the lowest level since the summer of 1990. That means the number of
unemployed people dropped by 1.6 million in 1994 -- fewer people collecting
unemployment benefits, and more people are getting pay checks. The number of people
working part-time when they would have preferred full-time work fell by over half a
million in 1994.. ·And although there is still a long road to travel, the unemployment rate
for African-Americans has fallen over the last two years, at one point dipping into single
digits for the first time in over two decades.
Output growth during 1994 was also impressive, far exceeding the forecasts of
almost all economists. The Gross Domestic Product, the best measure of national output,
grew by 4.0 percent after adjusting for inflation --the strongest growth in a decade. This
conceals an even bigger story: government spending fell, and private sector GDP surged.
Excluding government purchases, GDP growth was 5.1 percent in 1994.
In the private sector, it was investment that drove the growth of 1994. As noted
earlier, investment and productivity growth have been robust over the last two years.
Consumers spent money on cars and houses, and businesses poured money into equipment-- ·
not only increasing the quality of life in the short-term, but also increasing our rate of
productivity growth. Since the trough of the most recent recession, productivity has risen at
an average annual pace of 2.1 percent -- nearly twice the trend rate of productivity growth
over the past 16 years. Because economists agree that productivity growth and living
standards are closely linked, this increase should pay off in higher living standards.
· As the economy has continued to grow, signs of inflation have been few. In 1994,
the Consumer Price Index (CPI) rose only 2.7 percent, while core inflation (excluding
volatile food and energy prices) advanced only 2.6 percent, its lowest annual increase since
1965 .
•
•
1-7
�Objective analysts have confirmed these
basic facts time and again
,,
H&R Block: Income tax rates are raised only on the "top 1.2% of all taxpayers
... [while therel is no income tax increase for middle-income taxpayers .. .income
tax rates are unchanged on middle incomes -- 82.2% of all tax payers... and a tax
cut for 16.6% of all taxpayers [who] benefit from Earned Income Tax Credit
. Expansion." H&R Block Analysis of the Income Tax Consequences of the
Revenue Reconciliation Bill of 1993, pp. 21-24.
Wall Street Journal: "(E)xcept for a small gasoline tax boost and an increase for
the best-off social security recipients, the tax increases in last year's bill mostly
didn't touch the middle class, but hit the wealthiest 1.2% of Americans." (The
Wall Street Journal, 10/26/94)
Washington Post Citing the Congressional Budget Office: The Congressional
Budget Office has found "only a sliver of tax filers -:- 1.2% will a face higher
income tax bill on April 15 because of the Clinton Administration's economic
program." The "income tax applies only to taxable income in excess of... gross
income of roughly $185,000." ("GOP Tax Issue May Fade Away: Only 1.2% of
Filers will face Increase, CBO study Finds," Washington Post 1113/94)
Fortune Magazine (October 3, 1994): "[President Clinton's] economic plan
helped bring interest rates down, spurring the recovery."
The Financial Times (February 26, 1993): "US Treasury price roared ahead at
the long end of the market yesterday on the growing hopes that the Clinton
Administration will take a tough line on tackling the budget deficit."
The Wall Street Journal (February 24, 1993): "The spectacular bond market
rally· accelerated yesterday, with long-term Treasury bond yields plunging to
another record low as investors rushed to embrace President Clinton's economic
package."
•
1-8
�.ECONOMIC ACCOMPLISHMENTS
"
Over 6 million new jobs since President Clinton took office.
•
•
•
•
•
•
In the first 25 months of the Clinton Administration, the economy created 6.1
million new jobs~
93 percent of these jobs were in the private sector, a record compared to
comparable points of past economic recoveries.
Since the President's economic plan was passed in August .1993, employment
expanded by nearly 5 million jobs -- 93 percent in the private sector.
3.5 million jobs were added to the economy in 1994, the best year of overall job
growth in a decade.
In the first 25 months of the Administration, more than twice as many jobs
were created than during the previous four years combined. (6.1 million vs. 2.4
million).
Since January 1993, the economy has created five times more jobs per month
than during the previous four years (245,000 vs. 50,000).
Nearly 5. 7 million private sector jobs in the first 25 months of the Clinton
Administration.
•
•
•
•
•
•
•
Since January 1993, the economy created 5.7 million private sector jobs -- 3.3
million in 1994 alone.
More private sector jobs were created in 1994 than in the previous four years
combined (3.3 million vs. 2.0 million).
4.6 million jobs were created in the private sector since the passage of the
President Clinton's economic plan in August 1993.
3.3 million private sector jobs were added in 1994, the best year of private sector
job growth in a decade.
93 percent of all job growth in 1994 was in the private sector, the highest
percentage of new jobs in the private sector in over a decade.
Eight times more private sector jobs per month were created in the first 25
months of the Administration than in the previous four years.
More than twice as many private sector jobs created per month since January
1993 than during the previous 12 years (228,000 vs. 111,000).
In 1994, more new jobs in high-wage industries than in the previous five years
combined.
The economy created more jobs in high-wage industries in 1994 alone than were
•
•
•
•
•
created during the previous five years combined.
Since the beginnil!g of 1993, the economy has created 2.2 million jobs in highwage industries.
More than 1 million new jobs in high-wage industries were added last year
alone.·
Over half of all the jobs created were in managerial and professional
1-9
�ECONOMIC ACCOMPLISHMENTS
The manufacturing, constructior:-, and automobile industries made impressive gains.
•
•
•
•
•
•
Manufacturing employment grew each and every month during the calendar year
of 1994 for the first time since the 1970's.
After losing 2.2 million manufacturing during the 12 years prior to the
Administration, the nation added 284,000 manufacturing jobs in 1994.
Since President Clinton was inaugurated in January 1993, construction
employment expanded by 540,000.
In 1994 alone, more construction .jobs were created than in the previous nine
years combined.
Since President's Clinton's economic plan passed in August 1993, employment
in the automobil~ industry has increased 94,000.
Auto employment is at its highest level since 1979.
By the end of 1994, the unemployment rate had dropped to its lowest level in over .
4 years.
·
•
•
•
The unemployment rate declined from over 7 percent in January 1993 to 5.4
percent in February 1995.
Since August 1993, the unemployment rate has fallen from 6.7 percent to 5.4
percent.
The unemployment rate is at its lowest level since July 1990.
Output and productivity growth were robust.
•
•
•
•
•
Real Gross DomeStic Product (GDP) increased by 4.0 percent in 1994, its largest
annual increase in a decade.
. Since the President's plan passed in August 1993, spending by the federal
government on goods and services declined 5.5 percent (at an annual rate), while
private sector GDP growth was 5.2 percent.
In 1994, consumer spending on cars jumped up 6.2 percent.
Business investment on capital equipment has increased 18.2 percent per year
since the President took office.
Since the trough of the most recent recession, productivity has risen at an
average annual pace of 2.1 percent -- nearly twice the average rate of
productivity growth over the past 16 years.
In 1994, inflation remained low and stable.
•
•
The Consumer Price. Index (CPI) increased 2.7 percent in 1994 --the third
consecutive year with less than 3.0 percent inflation.
In 1994, the core CPI -- excluding food and energy prices -- rose only 2.6
percent, its lowest annual increase since 1965.
..
•
1-10
�C. GROWING TOGETHER AND GROWING APART
Reducing the deficit, strengthening the recovery, opening markets, and. making the
tax system fairer were all necessary steps in order to get our fiscal house in order and put
the economy on a solid path. Yet long-term economic prosperity depends on more. It
depends on increasing investment in technology, continuing to preserve our environment,
and empowering our communities. In particular, long-term growth requires strengthening
. the overall skills and education of the American people. Because of these long-term goals,
the Pre.sident has also implemented an ambitious strategy to improve lifelong learning. It
includes increasing investment for Head Start, WIC, and worker training, along with
passage of new legislation creating Goals 2000 education improvement efforts, a schoo~-to
work program, AmeriCorps National Service, and a new college loan program that makes
borrowing and repayment cheaper and more flexible.
In truth, the performance of the economy over the last two years has only
highlighted the need to invest in the long-term potential of our people, even as we take the
right short-term steps to solidify the economy. While economic growth over the last two
years has been robust, all Americans have not shared in the gains. Deeper economic forces
have proven stubborn -- and fiscal measures alone have proven insufficient to reverse
trends that been building over fifteen years.
Since 1979, real household income has grown by $767 billion --roughly a $2,000
increase for the average household. But the average figure conceals a different story:
Adjusted for inflation and population growth, about 97 percent of the increase in income
has gone to the top 20 percent of households. Everyone else -- 80 percent of American
households -- has shared just 3 percent of the income gains. (See Chart 1A and Chart 1B
below.) As a resUlt, in 1993, real median income wa:s virtually unchanged from 20 years
earlier.
·
The shift from growth widely shared to growth narrowly distributed to a minority of
families--from growing together to growing apart--is as historic as it is troubling. The
promise of America has always been that we all could share in the fruits of the largest
economy on earth--that families who work hard and play by the rules would enjoy a rising
standard of living for themselves and their children. Yet over the last 20 years, many
families have found that they are working longer hours, taking extra jobs. drawing down
savings--yet still barely making their way.
•
•
This shift has many sources, but one is most striking. In the past two decades, new
technologies and expanded trade have reshaped America's economic landscape. As a
result, education has become the fundamental fault-line running through the workforce.
Demand for highly-skilled workers is soaring at the same time as demand for less skilled
workers is shrinking. Well-educated and skilled workers are prospering. Those whose skills
are out of date or out of synch with industrial change are anxiously contemplating their
1-11
�prospects. An~ those without adequate education or skills are drifting further and further
away from the economic mainstream.
The data are striking. Fifteen years ago, a male college graduate earned 39 percent
more than a man with only a high school degree. By 1993, this gap had increased, and a
male college graduate out-earned his high school graduate counterpart by 80 percent.
Women are divided along similar, though slightly less stark, lines.
But earnings do not tell the complete story. Employer-sponsored health coverage for
workers with college degrees has declined only slightly, from 79 percent in 1979 to 76
percent in 1993. For high school graduates, rates have fallen further: 68 percent to 60
percent over the same period. And rates for high-school dropouts have plummeted -- from
an already low 52 percent in 1979 to only 36 percent two years ago. Retirement only
hardens these divisions. Nearly two out of every three workers with a college degree, gets a
pension on the job, while more than three out of four high school dropouts do not.
The nation is moving inexorably toward a two-tiered society composed of a minority
who are profiting from economic growth and a majority who are not. That is very far
from the American Dream--and from American history. A large and sturdy middle class has
always been this country's defining feature. President Clinton believes it can be so in the
future-- but only if we equip Americans with the education and job training to prosper in
the new economy. That is why rebuilding a new middle class for a new era is the
President's fundamental mission over the next two years.
•
1-12
�•
CHART lA
1950 to 1978 -- Growing Together
Real Family Income Growth By Quintile
160%
140°/(,
120%
.....
,
.....
w
100%
138%
----------------- -------1--66%------ ---- --111%~~
--- - --- ----
---
98%
80°k
60%
40°/o
20%
0%
Bottom 20°/o Second 20% Middle 20%
Fourth 20°/o
Top 20°/o
SOURCE: Bureau of the Census, Department of Commerce. All data converted to 1993 dollars.
�CHARTlB
1979 to 1993 -- Growing Apart
Real Family Income Growth By Quintile
-· -· ---------------------------------------------- ------------------· ----· --------·- - --1·8% ---.
10%
----------------------------------------------- ---.- ---------------- -------- . -..
......
I
......
~
0%
-10%
-15%
-20%
Bottom 20% Second 20°/o Middle 20%
Fourth 20°/o
Top 20°/o
SOURCE: Bureau of the Census, Department of Commerce. All data converted to 1993 dollars. ·
.
;
"
!:)_
�D. GOING FORWARD
•
•
I. CONTINUED DEFICIT REDUCTION
The President's 5-year economic plan passed in 1993 is currently projected to
reduce the deficit by $616 billion. In the President's FY 1996 budget, he proposed $144
additional savings, with $81 billion for additional deficit reduction. The FY 1996 budget
also eliminated or consolidated over 400 programs. As a result, under the President's new
plan, the deficit as a percentage of our economy would be reduced from 4.9% in FY1992 to
2.1% in FY2000 and then to 1.5% by the year 2005. (See chart.) If not for the interest
being paid on debt created during the 12 years before President Clinton took office, his
1996 budget would not only be balanced--it would be in surplus. ·And the President is ·
committed to working with the current Congress to bring down the deficit further in the
context of serious health care reform.
in
II. CONTINUED INVESTMENT IN EDUCATION, CHILDREN AND TECHNOLOGY
Like his earlier budgets, the President's 1996 budget. combines deficit reduction with
continued investment in areas that are essential to long-term economic growth. These
investments include key technology initiatives, environmental initiatives, and community
empowerment proposals such as Community Development Financial Institutions and
Empowerment Zones. The heart of the President's strategy is a comprehensive effort to
invest in the skills and education of our people throughout their lives. The President is
fighting not only to protect but to expand a number of investments in people, including the
following:
(
• WIC .TO BE FULLY FUNDED: By enabling parents and young children to get
the nutrition they need, WIC saves money and saves lives. WIC was put on a fullfunding path, and funding is projected to increase by $960 million from 1993 to
1996 -- a 34% gain. The new funding has already enabled WIC to enroll an
additional 1 million women, infants, and children since 1993.
• HEAD START FUNDING WILL INCREASE BY 42%: Head Start funding is
projected to go up from $2.77 billion in FY1993 to $3.94 billion in FY1996. The
new funding will enable over 130,000 more children to enroll in 1995 than in 1992,
while also moving many students from part-time to full-time enrollment and
· improving program quality .
.•.
• K-12 EDUCATION IMPROVED BY GOALS 2000: The Goals 2000 bill
codifies the National Education Goals and offers grants to schools and states that
commit themselves to specific plans for systemic reform of K-12 education.
Already, 47 states and thousands of schools are uniting parents, teachers, and
1-15
�principals in bottom-up reform efforts. Authorized funding for Goals 2000 in
FY1996 is $750 million.
• INCREASED FUNDING FOR DISADVANTAGED STUDENTS: Funding
under Title 1 of the Elementary and Secondary Education Act is expected to increase
from $6.7 billion in FY1993 to $7.4 billion for FY1996. Title 1 provides assistance
to local school districts to help disadvantaged students.
•
• COLLEGE MADE MORE AFFORDABLE: Borrowers will be able to take
advantage of the new direct student loan program by consolidating their guaranteed
loans into direct loans. When fully· phased in, approximately 20 million borrowers
will be eligible to pay for their education through direct lending. Some of these
borrowers will benefit from lower interest rates, and all will benefit from a greater
range of repayment options, including pay-as-you-can repayment. And the new
,student loan program will save taxpayers over $6 billion over five years.
• HISTORIC NATIONAL SERVICE PROGRAM CREATED: This year,
20,000 AmeriCorps Members are tutoring students, immunizing children, reclaiming
parks, and patrolling streets--and earning education awards in return to pay for
college or job training. AmeriCorps Members work inside community organizations,
improving neighborhoods from the bottom up. AmeriCorps is scheduled to grow to
34,000 members in 1995, and over its first three years, 100,000 Americans will
serve our country through AmeriCorps.
• SCHOOL-TO-WORK PROGRAM WILL HELP STUDENTS GET JOBS:
President Clinton signed into law the School-to-Work Opportunities Act, a crucial
element of the Administration's lifelong learning agenda. With this landmark
legislation, the federal government will provide venture capital to spark a nationwide
system for moving America's young people smoothly from the classroom to a job
with a future. This year, 28 states have received funds for implementing their
school-to-work programs--with all other states receiving planning grants. Funding
has increased from $50 million to $400 inillion in 1994.
Ill. THE MIDDLE CLASS BILL OF RIGHTS
On December 15, 1994, President Clinton proposed a Middle Class Bill of Rights -his plan to ensure that all Americans share the benefits from an expanding economy now
and in the future.
Three general features of the plan are most striking. First, it is tightly targeted at the
middle class families who need help most. About 85 percent of the tax benefits will go to
families that earn less than $100,000 per year. Second, the President's proposal invests in
those who are investing in our future: getting an education, buying a home, raising a
family. Third, every penny of the Middle Class Bill of Rights if fully paid for by spending
1-16
.
�cuts--with billions left over for deficit reduction.
The "Middle Class Bill of Rights" has four components:
•
$10,000 Education Tax Deduction: Americans can deduct from their taxable
income the money they spend on post-secondary education for themselves or their
families. Ortce the policy is fully implemented, up to $10,000 of education spending
will be deductible each year. Taxpayers would not have to itemize their deductions
to get the education and training deduction. To focus the tax cut on the middle
class, deductibility ·is gradually phased out over the income range of $100,000 to
$120,000 for a couple filing jointly; and between $70,000 and $90,000 for
individuals.
•
$500 Child Tax Credit: A $500 non-refundable tax credit will be allowed for each
child under the age of 13. This tax credit will be available to any family whose
income is less than $75,000 --the families with young and growing children.
•
An Expansion of IRAs: The IRA proposal would expand the availability of
deductible IRAs to all middle income families. Working Americans with family
incomes under $100,000 would be able to put $2,000 tax free into an IRA account
and then be able to withdraw that money tax free -- without penalty -- for education,
medical expenses, or a purchase of a first home.
•
G.I. Bill for American Workers: This proposal takes nearly 70 different training
programs and consolidates them into one program that directly empowers workers
with skill grants and vouchers of $2,620 per year for up to 2 years. This proposal
would be self-fmancing too, since it uses existing funds from the previous programs.
Workers who are laid off or disadvantaged would .also be eligible. for income
contingent loans through an expanded Individual Education Account. This proposal
centers on accountability and strong consumer information which should weed out
bad programs and reward those programs that successfully help workers get the
skills they need for new and better jobs.
•
A. EDUCATION AND TRAINING TAX DEDUCTION
HELP MIDDLE-CLASS AMERICANS GET THE SKILLS THEY NEED
The President proposes making tuition for college, community college, technical school,
graduate school and job-training fully deductible up to $10,000. The deduction will be
fully available to families earning up to $100,000, and phased out at $120,000 .
.~
•
BROADEN OUR MIDDLE CLASS AND NARROW THE.GAPS BETWEEN US
Each year of college or job training beyond high school increases average future earnings
by 6 to 12 percent. And while workers with the right skills have seen their incomes rise
over the last 15 years, paychecks for everyone else have declined .
1-17
�STOP RISING TUITION FROM CRUSHING MIDDLE-CLASS FAMILIES
Wealthy students can afford higher education and lower-income students receive
financial aid. The middle-class gets squeezed as college costs rise. Between 1981 and
1991, average college tuition rose more than 130 percent -- compared to about 50
percent inflation over that period.
OFFER AN INCENTIVE FOR EDUCATION SIMILAR TO BUSINESS INVESTMENT
The tax code already encourages business investments. It's time to create the same
incentive for families to make the best investment they can make: education.
•
MILLIONS OF WORKING FAMILIES ·WOULD (rET TAX RELIEF
Twelve million students would benefit from the deduction, over 80 percent of them with
incomes less than $75,000.
FAMILIES DON'T NEED TO ITEMIZE TO GET THE DEDUCTION
The deduction will be "above the line" -- allowed in determining adjusted gross income-so middle-class families that don't itemize will still get the tax break.
TAX BREAKS WON'T TRIGGER TUITION INCREASES
Little evidence links higher federal aid with higher tuitions: in the 1980s, education aid
virtually froze while tuitions jumped; in the last two years, President Clinton expanded
student aid and tuition increases slowed. With 7,500 schools competing for students
today, schools that try to cash in by raising tuition will lose students -- and money.
PART .OF THE PRESIDENT'S COMMITMENT TO EXPAND CHOICE AND ACCESS
The President is already implementing Individual Education Accounts to make more
affordable student loans available to every American and save taxpayers billions of
dollars. Convenient "pay-as-you-can" options enable individuals to repay the investment
as their earnings permit. In addition, the President is proposing to raise Pell Grants to
$2600 and extend Skill Grants to laid-off and low-wage workers who usually can't take
full advantage of the education and training tax deduction.
•
1-18
�An Example of How A Working American Family Will
Benefit from the Education and Training Deduction
A four-person family -- with $50,000 of wage and salary income, $7,500 of itemized
deductions, and $10,000 in personal exemptions (4 x $2,500) -- would benefit in the
following way from the education and training deduction.
This family has two children who are in college and they have $10,000 in education
expenses. When the tax cut is fully phased in, the family would get a $1 ,500 tax cut
since they are in the 15% tax bracket. This would lower their income tax liability by 31
. percent.
Current Law
$4,875
Fully Phased In Tax
$3,375
Tax Reduction
$1,500
%Reduction
31%
B. $500 CHILD TAX CREDIT
GIVE TAX RELIEF TO MIDDLE-CLASS FAMILIES
President Clinton wants to give a $500 tax credit to families for each child under
age 13. The creait will be fully available to families earning up to $60,000 and
phased out at $75,000.
HELP RESTORE THE AMERICAN DREAM
Middle class families who work hard and play by the rules aren't getting ahead;
they're getting squeezed. The median family earned essentially the same in 1993
than in 1973.
THE COSTS OF RAISING CHILDREN CONTINUE TO RISE
For middle-class families, the costs pf health care and education are rising faster
than inflation. In 1990, the average middle-income family with children in daycare
or afterschool care spent $3,000 on day care alone.
RESTORE FAMILIES' ERODED PERSONAL EXEMPTION ·
In 1950, the personal exemption was worth $3,800 in 1995 dollars. Today, it's just
$2,500 -- a 34 percent decline. President Clinton wants to restore the value of the
personal exemption for the people who need it most -- families with young children.
...
•
FOCUS RELIEF ON THE MIDDLE CLAsS, NOT THE WEALTHY
President Clinton gives tax relief to families with incomes below $75,000--the
niiddle class that's been hurt the last 15 years. In contrast, the proposal approved by
the House Ways and Means Committee offers a child tax credit to families with
1-19
�incomes up to $250,000 -- including some of the wealthiest 1 percent of Americans.
TARGET RELIEF WHERE WORKING FAMILIES NEED IT MOST
The tax credit goes to the families with the greatest needs, those with children under
13 who may require child care or afterschool care. For families with older children,
President Clinton has proposed a tax deduction for education expenses up to
$10,000. And for families earning less than $28,500, he has already expanded the
Earned Income Tax Credit -- offering an average tax cut of $1,000 to 15 million
families.
An Example of How A Working American Family Will
Benefit from the Child Tax Credit
A four-person family -- with $50,000 of wage and salary income, $7,500 of itemized
deductions, and $10,000 in personal exemptions (4 x $2,500) -- would benefit in the
following way from the Child Tax Credit.
This family has two children under the age of 13 and therefore receives two child tax
credits. When fully phased in, this will be worth $1,000 and would reduce the family's
federal income tax liability by 21 percent.
Current Law
$4,875
Fully Phased-In Tax
$3,875
Tax Reduction
$1,000
%Reduction
21%
C. EXPANSION OF IRAs
HELP WORKING AMERICANS SAY.E FOR THEIR FUTURE
. The President's proposal would enable more middle-class families to save in two ways:
•
First, he would double the income thresholds for tax .deductible IRAs: eligibility
would now be phased out for couples with incomes between $80,000 and $100,000.
•
Second, President Clinton would allow Americans to withdraw money from IRAs
without penalty to pay for education and training, a first home, or medical
expenses.
•
1-20
�EXPANDING IRAs WILL INCREASE PRIVATE SAVINGS
•
•
•
Private savings are key to creating good jobs and raising incomes in the long-run.
Y~t our private savings rate has declined from 8.1 percent of GDP in the 1970s to
5.1 percent in the 1990s. Several empirical studies have shown that expanded IRAs
can increase priyate savings--and the President's proposal will do so in three ways:
Dramatically increase the number of families eligible for tax-free IRAs, enabling
middle-income families now putting away less than they'd like to save more, taxfree.
Giving families more incentives to save by allowing them to use savings for
purposes other than retirement, like paying for education or buying a home.
Increasing awareness of IRAs, because as more people are eligible for IRAs, banks
will promote them more, and more people will decide to save.
ANOTHER WAY TO HELP AMERICANS PAY FOR COLLEGE OR JOB TRAINING
Middle-class Americans will be able to use IRAs to pay for education without
penalty. Together with the education tax break and the G.l. Bill for Workers, it's
another way that President Clinton is helping Americans to invest in their future.
HELP A FAMILY BUY A HOME
Families will now be able to save tax-free in an IRA and then use the money
without penalty to buy a first home--or help a child buy one.
MORE CHOICES FOR MIDDLE-CLASS FAMILIES
The President's plan allows families to take the tax breaks from IRAs either when
they deposit money or when they withdraw it. And President Clinton allows
withdrawals without penalty for more reasons -- such as care of an elderly parent or
unemployment.
TAX RELIEF TARGETED AT THE MIDDLE CLASS, NOT THE WEALTHIEST
President Clinton's proposal is targeted at those who have seen their incomes
stagnate over the last 15 years -- middle-class families with incomes under
$100,000. (The "Contract with America" offers them fewer options but offers a
costly tax break to people earning as much as $250,000 -- people who are already
saving.)
•
1-21
�An Example of How A Working American Family Will
Benefit from Expansion of IRAs
A four-person family -- with $50,000 of wage and salary income, $7,500 of itemized
deductions, and $10,000 in personal exemptions (4 x $2,500) -- would benefit in the
following way from the expansion of IRAs.
The family has two children who are over the age of 12 and are not in college. If they
only wanted to save for their children's education, each working parent could put $2,000
in their IRA to save for their children's college and save $600 in taxes for a 12 percent
reduction of their tax liability.
Current Law
$4,875
Fully Phased In Tax
$4,275
Tax Reduction
$600
%Reduction
12%
D. G.I. BILL OF RIGHTS FOR WORKERS
FROM FEEDING BUREAUCRACIES TO EMPOWERING INDIVIDUALS
• Collapse some 70 Federal programs for education and job training
• Put the power to learn in workers' hands-- offering low-income and unemployed
workers Skill Grants for education and training up to $2,620 per year, and Individual
Education Accounts to get low-cost loans and repay them on a flexible schedule.
EMPOWERING WORKERS DIRECTLY
Instead of just shifting money from a federal bureaucracy to a state bureaucracy, the
President consolidates programs and empowers workers directly with Skill Grants -- so
they can choose the quality training and education they want, where and when they want
it.
LEANER GOVERNMENT
The current maze of job training programs wastes money and doesn't get the job done.
The President will replace some 70 separate programs with one integrated system.
STATE FLEXIBILITY
The President's proposal enables states to work with communities, schools, and the
private sector to tailor information systems, job search assistance, and on-the-job training
to meet local goals. Most federal rules dictating procedures will be wiped out.
•
1-22
�GOOD INFORMATION TO GUIDE GOOD CHOICES
The proposal encourages states and the private sector to develop a system of One-Stop
Career Centers· or other information networks where workers get access to real job search
help and reliable information on jobs and the records of training institutions.
ACCOUNTABILITY
For the first time, training programs will have to pass the same test as the private sector:
meet your customers' needs or lose business. Choice, competition, and good information
will empower individuals to pick providers who deliver. And performance standards for
training providers will cut off the frauds and the incompetents.
PRIVATE SECTOR PARTNERSHIP
The President's proposal isn't about government. It's about jobs, so the private .sector has
a central role. Business and labor will be full partners in designing new systems so that
workers and education providers know what skills employers will pay for. New awards
will recognize excellence in creating workplaces that reward worker skills.
PATHS FROM SCHOOL TO WORK FOR YOUNG PEOPLE
This initiative will fold federal training programs for young people into the school-towork movement underway at the state and local level. Young people can look forward to
clearer paths to new skills and better jobs.
HELPING WORKING AMERICANS: AN EXAMPLE
When a worker is laid off, he becomes eligible for a Skill Grant. He can go to a
One-Stop Career Center to le~ about the community college and job training programs
nearby and study their success records in detail. Then he can choose the program with the
best placement record In a field that interests him, and use the Skill Grant to pay for it.
The worker will learn a new trade, and at the end of the program, receive job search
assistance with area employers.
•
1-23.
�2. REINVENTING GOVERNMENT
Actions to Date
President Clinton has promised a revolution in government--to reduce the federal
government by 100,000 jobs, eliminate wasteful spending and make government
more accountable to the American people. Under the leadership of President Clinton
and Vice President Gore, the Administration is already making government work
better and cost less. The Administration:
•
Has already cut over 100,000 federal jobs. In ·less than five years, the federal
· government civilian workforce will drop by at least 272,900 --the smallest
it's been since the Kennedy Administration (See Chart 2-A on following
page).
•
Has saved $63 billion.
•
Is cutting an additional $76 billion by eliminating obsolete federal programs,
letting states or private businesses take over programs they can operate better,
and by not increasing current spending levels.
•
Has cut through reams of red tape like reducing the 2-inch thick Small
Business Administration's loan application to only 2 pages.
•
Is streamlining organizations, including closing 1,200 U.S. Department of
Agriculture field. offices and eliminating over 30 customs management offices
and reassigning 1,400 people from administrative jobs to serving customers
on the front lines.
·
2-1
�CHART2A
•
Executive Branch Civilian Federal Employment
(In thousands)
2200
2100
---.·-
2000
--
1900
1800
-- - -- - -- - - - - ~
\C
~
\C
\C
0\
0\
\C
0\
N
t--
0\
"'0\t--
QC
......
0'\
CIC
0\
~
CIC
0\
t--
CIC
0\
0
0\
0\
~
0\
0\
\C
0'\
0\
0\
0\
0\
Year
•
2-2
�•
Background
Many have talked about reforming government in the past. When President Clinton
and Vice President Gore arrived in Washington, the federal government had plenty of
reports on reform just gathering dust on the ·shelves.
President Clinton changed all that by putting Vice President AI Gore in charge.
When Herbert Hoover finished the Hoover Commission report in 1955, he went back to
Stanford. When Peter Grace finished the Grace Commission report in 1983, he went back
to New York City. But when AI Gore finished his report, he went back to his office and
· got to work turning the recommendations into reality.
The Initiative: Phase I
The driving question for the first phase of Reinventing Government was "how can
government work better and cost less?" Beginning in March 1993, the Vice President led
an intensive 6-month review of federal government structures and procedures called the
National Performance Review (NPR). The Report, issued in September 1993, was a
challenge to the entire federal government and a promise of something better for the
government's customers --the American people.
Realizing that the problems with the federal government stemmed from the archaic
systems which had developed over the years, Vice President Gore asked the people who
knew best what was wrong with the way government worked -- career civil servants -- to
lead the revolution to reinvent government.
The four main principles were simple:
•
Put customers first --change government's culture by focusing on what matters to
the people it serves;
•
Empower employees to get results -- remove layers of oversight, give front-line
employees not only responsibility, but also accountability, for results;
•
Cut red tape -- eliminate unnecessary paperwork, procedures, and requirements for
•
•
2-3
�the federal government, its state and local partners, and its customers; and
•
Cut government back to basics -- eliminate obsolete and duplicate programs and
functions, and reengineer what's left.
The NPR report was well-received. Max DePree, author of the popular Leadership Is An
Art, called it "the best book on management available in America."
11
..
What follows is a sampling of accomplishments in Reinventing Government, Phase I.
Some are great and some are small. All show our commitment to making government
work for people again.
A GOVERNMENT THAT WORKS BETTER AND COSTS LESS
Government has started working better. Over 90 percent of the NPR's proposals
have moved forward -- implemented by a Presidential Executive Order or by agency action
or propo~ed in legislation.
We have focused on improving the performance of federal programs to ensure that
they achieve real results like cleaner air and fewer teen pregnancies, rather than just
spending taxpayer dollars. For the first time, federal agencies have asked customers
what they want and set more than 1,500 customer service standards.
IDSTORIC CUTS IN THE FEDERAL WORKFORCE
President Clinton is streamlining federal agencies and cutting management layers
and excessive controls as he shrinks the federal workforce to its smallest size since John
F. Kennedy was President.
FEMA
"FEMA, the Federal Emergency Management Agency, has gone
from being a disaster to helping people in disasters."
President Clinton, January 24, 1995
After Hurricane Andrew in 1992, FEMA was criticized for waiting too long to act
and for making inaccurate damage assessments. The immediate needs of victims, as well as
the need of the general public for a competent presence in the midst of the destruction,
went largely unmet.
2-4
•
�But under this Administration, FEMA has completely turned around. Ask the
farmers in the midwest who fought the flood there or the people in California who have
dealt with floods and earthquakes and fires, and they'll tell you that the Administration has
reinvented FEMA. Government workers working hand in hand with private business
rebuilt Southern California's fractured freeways in record time and under budget. And
because the federal government moved fast, all but one of the 650 schools damaged in
the January 1994 earthquake are back in business.
FEMA eliminated two layers of organization, cutting supervisors by 34 percent, and
is now organized around functions. Everyone works when disaster strikes. For example,
48 days after Hurricane Hugo in 1989, FEMA had registered 55,228 disaster victims and
checked 8,418 housing units. But 45 days after the 1994 Los Angeles earthquake,
FEMA had registered 392,992 disaster victims and checked 124,848 housing units.
SOCIAL SECURITY ADMINISTRATION
"Putting people first means ensuring that the Federal Government provides
the highest quality service possible to the American people. "
President Bill Clinton
Executive · Order 12862
Setting Customer Service Standards
September 11, 1993
The Social Security Administration has become an independent agency under a bill
that President Clinton signed and is putting the highest premium possible on customer
service. As one indication of SSA's commitment to customer service, the agency conducted
a nationwide series of customer focus groups and surveyed 10,000 customers in person or
by phone and another 22,000 by mail.
SSA's reengineering efforts are intended to improve the processing of its major
workloads. The agency's initial effort focuses on disability claims processing. The average
disability claim passes through the hands of 26 workers over 150 days. Many claims are
rejected and then reconsidered, involving more people, more processing and more time. By
the end of the full appeal process, the average claim is handled by 43 employees over a
span of 700 days.
•
SSA's goal in redesigning the disability claims process is to give initial decisions
within 60 days and reduce the time for appeals decisions, if necessary, by nearly 60%.
Suppose the social security check that you need to pay your rent doesn't come the
day you expect it. As things stand now, you call the Social Security Administration and set
2-5
�in motion one of those systems that was designed to please somebody other than you.
First, the agency notifies Treasury to stop payment on the first check. You begin waiting.
Meanwhile, Treasury searches its records to see whether the check has been cashed. You
keep waiting. If you're lucky, and it has not been· cashed, Treasury mails you another
check. Total waiting time for you and your landlord: two to three weeks. If you're
unlucky, and the missing check has been cashed, you'll wait an additional six weeks.
•
We have. cut four days off the time to reissue an uncashed check. In cases where
checks have been cashed, Treasury is working to g~t the added six weeks pared down to
one week.
And before President Clinton took office, millions of people did not receive their
Social Security cards within 5 days. Now they do.
Ultimately, the best way for customers to avoid all the problems associated with
paper checks is to get benefit payments electronically through the government's direct
deposit program; it's much faster and safer. Plans are underway for a nationwide system
to deliver other government benefits such as food stamps directly. An electronic benefits
card can eliminate paperwork and deliver services mpre quickly, cheaply, and accurately,
with less fraud. The program will produce federal savings of $195 million a year once in
operation, and 31 million people in 12 major state and federal programs will benefit.
DEPARTMENT OF DEFENSE
"I think I might rather eat a cake that FAILED that particular test. "
Vice President AI Gore
The Defense Department is aggressively eliminating ridiculous military
specifications such as this one:
CAKE MIX
4.6.3 Breaks and cracks. Bake as in 4. 6.1
a. Cool the cake in the pan for 2 hours at
room temperature 69 degrees F + 5 degrees F and a
relative humidity of 50 + 5 percent.
b. Space two 4 inch diameter cylinders
(for example, two flat-topped metal
cans) 6-112 inches apart at the closest
point.
c. Place the cake (with pan and liner re2-6
•
.•
�•
moved) with the flat side down equally
on the two cylinders.
d. Examine after 2 minutes for breaks
and cracks.
The Pentagon decided to reinvent the cake mix with a method used widely in homes
across America -- TASTE the cake! If you like it, great. If you don't, get another cake
mix. The Pentagon scrapped all military specifications for mess hall food and is buying
real food. ·
U.S. CUSTOMS SERVICE
The Customs Service often took hours, even days, to move fresh flowers and fruit
and other perishable cargo through its port in Miami. Viewing shippers as its customers,
Customs worked with other agencies (e.g., the Immigration and Naturalization Service, the
Food and Drug Administration, and the Fish and Wildlife Service) to find ways to niove ·
cargo more quickly, constantly asking the airlines and other customers how they wanted the
system to work. By relying on electronic filings of shipping documents, Customs
discovered how to please shippers and regulators simultaneously. Now, Customs preapproves most cargo before it reaches Miami, permitting agents to focus on inspecting
higher-risk shipments, like illegal drugs.
·
GIVING STATES AND LOCALITIES MORE FLEXIBILITY
Moving towards a new partnership with states and localities, . the Clinton
Administration has made extensive use of waivers to provide states and localities flexibility
in managing existing programs, especially in health services and welfare. President Clinton
has given 25 states the right to slash through federal regulations to reform their welfare
systems. He has also been involved in an ongoing effort to consolidate planning
requirements for 199 federal programs targeted to child.I:en and families in the states and
local· jurisdictions of Indiana and West Virginia.
In December 1994, the Administration designated 104 community empowerment
zones and enterprise communities. .The Community Empowerment Initiative is an
experiment in community-based decision making with the federal government as a partner
to help communities meet their needs.
·
•
2-7
�Case Study: The Oregon Option
In Oregon, we are creating a new partnership based on an outcomes-oriented
approach to intergovernmental service delivery. In December, Oregon's governor
and numerous mayors signed an agreement with Vice President Oore and several
federal agencies to pilot a redesigned system that will be:
•
•
•
•
based on results;
oriented to customer needs and satisfaction;
biased toward prevention of problems, not remediation; and
simplified and integrated -- delegating responsibilities to front-line, local
level providers.
THE PROCUREMENT PROCESS
roo often the procurement process ties people in knots. For example, during
Operation Desert Storm, the Air Force needed better communication among its units. The
Air Force found just the right procedure in Motorola's commercial radio, and they ordered
6,000 of them. But Motorola lacked the record-keeping systems required by the
procurement rules to show the Pentagon that it was getting the lowest available price.
(Never mind that the price could be easily checked on the commercial. market.) To
circumvent the problem, the government had to persuade the Japanese government to buy
the radios and donate them back to the Air Force.
The system made no sense. Early in the Administration's efforts to implement NPR,
President Clinton revolutionized the federal procurement process with the stroke of a pen,
signing a memorandum through which the executive branch will implement a governmentwide electronic commerce acquisition system. A year later, the President signed into law
the Procurement Reform bill, reinventing the federal government's procurement system.
The Department of Defense, which spends 75 percent of the government's
procurement budget, jumped at the new opportunity. Defense Secretary Perry ordered the
Pentagon to reduce reliance on military specifications. In a move that will save billions of
dollars, Perry directed the department to allow contractors to make greater use of
commercial items in the equipment they sell the government. Freed from the burdensome
"mil specs," more contractors will seek defense work and competition means better quality
•
and prices.
All aspects of procurement -- ordering, invoices, payment, and so on -- will change
2-8
•
-.
�•
from a paper-based to an electronic system for small purchasers. It w111 cut costs and
present a host of opportunities for small business to bid on business from the government.
It also will cut the ti,!De for many purchases from three weeks to three minutes.
ENDING YESTERDAY'S GOVERNMENT SUBSIDIES
Wool and Mohair ·
During World War II and the Korean conflict, the United States imported half the
wool required for military uniforms. Determined to reduce dependence on foreign fibers
and to insulate American producers from foreign competition, Congress declared wool a
strategic material and enacted the National Wool Act in 1954. The Act was designed to
increase domestic production of wool by providing direct payments to farmers based on a
percentage of their market sales. In other words, the more wool farmers produced, the
more federal funding they received. About one-third of the payments went to ranchers who
raised Angora goats for mohair. Although mohair never had strategic value, it was
included in the 1954 Act as an offshoot of the wool industry.
Wool was removed from the Pentagon's strategic materials list in 1960. However,
the Act remained in effect until the Clinton Administration ended it, saving an estimated
$923 million over a four-year period.
Honey
Until the Clinton Administration ended it, the federal government supported honey
production since 1950. The program was enacted after honey prices dropped following
World War II because of reduced demand and excess inventories. During the war, the
government declared beekeeping war-essential and encouraged heavy proquction. Beeswax
was used in place of petroleum to waterproof ammunition and other equipment, and honey
replaced tightly rationed sugar. After the war when demand decreased, Congress
introduced price supports for honey in the Agricultural Act of 1949. The purpose of the
legislation was to ensure that enough honeybees would be available for crop pollination.
The market overcame the original need for the program, and by eliminating the
program we are saving about $15 million over a four year period.
..
2-9
�The Initiative - Phase II
"We are sticking to the principles we used in the first National Performance
Review - principles that underpin America's most innovative and successful
private companies: put customers first, cut red tape, delegate authority and
cut back to' basics. And we are going to make government work be tier and
DO less. We are going to trade interference for opportunity and make it
possible for middle-class Americans· to have the break they've earned to raise
a family, educate their children and get ahead in life. "
·
Vice President AI Gore
•
The purpose of the second phase of Reinventing Government is to answer the
question, "what should the federal government be doing?" The goal is a smaller federal ·
government that helps communities solve their own problems and delivers quality services
so that Americans know they are receiving value for their tax. dollar.
How will we know when this effort is successful? We will know when there are
fewer decisions being made by the federal government that can best be made elsewhere,
and when customers of the federal government see ·substantial improvements in services.
And when we move from a process where lawyers and bureaucrats write volumes of
regulations to one where people work in partnership to issue sensible regulations that
impose the least burden without sacrificing rational and necessary protections.
REGULATORY REFORM
"/ believe we can bring back common sense and reduce hassle
away safeguards for our children, our workers, our families. "
wit~?out
stripping
President Clinton
Remarks at Regulatory Reform Event
February 21, 1995
"Everyone wants reform. This administration is the first to take it seriously and
make it work. "
Philip Howard
Author, The Death of Common Sense
February 21, 1995
.,
2-10
�•
In February 1995, President Clinton announced sweeping changes in the federal
regulatory process with specific instructions to federal regulators:
First: Cut Obsolete Regulations
· 1'
President Clinton ordered regulators to conduct a page-by-page review of all agency
regulations and eliminate or revise those that were outdated or in need of reform. A list of
eliminated or modified regulations will be delivered to the President by June 1, 1995.
Second: Reward Results, Not Red Tape
The. President directed the agencies to change the way they measure the performance
of the agency and the frontline regulators in order to focus on results, not process and
punishment. By June 1, agencies must eliminate all personnel performance measures based
on process (number of visits made, etc.) and punishment (number of violations found,
amount of fines levied, etc.).
Third: Create Grassroots Partnerships Outside of Washington
President Clinton directed agency directors to convene groups of frontline regulators
and the people affected by their regulations around the nation -- at our cleanup sites, our
· factories and our ports.
Fourth: Negotiate, Don't Dictate
The President directed regulators to substantially ·expand efforts to promote
consensual rulemaking instead of the traditional rulemaking that has dominated the
regulatory arena. By March 30, regulators must submit to the President a list of upcoming
~emakings that can be converted into negotiated rulemakings.
To highlight the Administration's regulatory reform efforts, the President visited
Custom Printers, a small print shop in Northern Virginia, where he announced the first in a
series of government-wide reforms to cut red tape and reduce the regulatory burden on
American businesses, especially small businesses.
President Clinton unveiled a landmark package of 25 environmental reforms and
announced a government-wide policy that allows regulators to waive fmes where small
businesses have acted in good faith, but violated the rules. He also announced a set of
reforms that will make high-quality drugs and medical devices available to consumers more
quickly and cheaply.
The regulatory reform process will continue as the Administration continues to
2-11
�throw out yesterday's regulations without sacrificing real protection for our citizens.
REINVENTING FEDERAL AGENCIES - Phase II
President Clinton and Vice President Gore are examining the basic missions of
government to find and eliminate things that don't need to be done by the federal
government and sort out how best to do the things the federal government should continue
to do. Agency teams are using this chart to determine whether their programs should be
eliminated, consolidated, privatized or given to state and local governments. (See Chart 2B
on following page).
After President Clinton said, "We have to change yesterday's government and make
it work for the America of today and tomorrow," The President got some quick results from
agencies on the leading edge of our government revolution. ·
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (HUD)
The housing needs of low- and moderate-income families have worsened in the past
decade and a half. Our cities have increasingly become enclaves of the poorest of the poor.
Violence and drugs, homelessness and AIDS have ravaged inner city neighborhoods.
Decades of efforts to solve urban America's problems of poverty and lack of affordable
housing have created layers of programs, regulations and bureaucracies that shifted the
focus away from people to projects. The President has called for a radical transformation
of HUD, giving back responsibility to cities and states, empowering people and eliminating
the layers. To do this, the President will:
1. Transform public housing. Federal assistance will no longer go to public
housing projects, but instead will go directly to people, particularly those who work
or are making meaningful efforts to become employed. And President Clinton will
end the monopoly of public housing agencies. They will have to compete for tenants
like others in the marketplace. Current residents of public housing and privately
owned assisted housing projects will get certificates and the freedom to move to use
these certificates to help pay rent in the private market if they wish.
2. Consolidate 60 major HUD programs into three performance-based funds a Community Opportunity Fund,· an Affordable Housing Fund, and Housing
Certificates for Families and Individuals,· to provide flexible resources to mayors and
governors for critical l].ousing and economic development activities in their
communities. The consolidation will sweep away the clutter of separate application
processes, rules and regulations that has accumulated at HUD over the past 30 years,
as programs were piled on top of programs. And it will free cities and states to solve
their housing and community development problems in their own ways.
2-12
�•
I Sample Decision Tree for Analyzing Agency Programs I
Existing Program or Function
Is this program or function critical to the agency's mission
based on "customer" Input?
n
=
N
I
,_.
w
Give
Sell
Away
Is there any way to cut cost or Improve performance
by Introducing competition?
How can NPR principles be applied to put customers first,
cut red tape, and empower employees?
Continue Reinvented
Operation
Govt.
Corporation
Contract
for Services
Require Fed. Govt.
units to Compete
Vouchers
Best chances for
introducing competition
• Similar services available
commercially; e.g., food
service, scientific research
• Rapidly changing technology;
e.g., information technology
• Services paid directly by
customers; e.g., Alaskan
Power, air traffic control
• Multiple federal locations;
e.g., six shipyards, six IRS
revenue centers
• Strictly Internal services; e.g.
travel, payroll
>
~
~
N
=
�3. Reinvigorate the Federal Housing Authority (FHA), creating new flexibility
as a government-owned corporation. The new entrepreneurial FHA will work with
private enterprise and non-profit organizations to expand homeownership
opportunities to low-and moderate-income Americans, and provide decent, affordable
housing to low-income renters.
ELIMINATING THE INTERSTATE COMMERCE COMMISSION (ICC)
For a more efficient government that is out of areas where it doesn't belong, we
must eliminate governmental functions that are no longer needed and streamline those that
are essential.
The Interstate Commerce Commission is a relic of nineteenth century government,
created to address nineteenth century problems. In the mid and late 1800's, railroads'
monopoly and arrogance earned their owners the label of "robber barons." The creation of
the ICC was the result.
Circumstances have dramatically changed. In 1885, railroads had twice the level of
revenues as the federal government. Today, the federal government takes in almost 30
times more revenue than the nation's railroads. The most significant changes occurred
fifteen years ago with the enactment of broad deregulatory legislation. It is now time to
write the fmal chapter on deregulation. President Clinton is recommending the elimination
of the ICC. Those functions for which there is a need will be transferred to other federal
agencies.
During the 1887 debate on the Interstate Commerce Act, Congressman Crisp, the
champion of the creation of the Interstate Commerce Commission, stated: "I maintain, sir,
that the railroad business, or the business of transportation, is no exception in one respect
from any other business, and that is, ... it is to the interest of the public to have
competition." That principle applies no less forcefully today than it did 108 years ago.
THE DEPARTMENT OF ENERGY
The Energy Department owns and operates one of the largest oil fields in the United
States- the Naval Petroleum Reserve. During World War I the Navy changed the fuel for
our battleships from coal to oil and decided it needed its own oil field to fuel the battleships
if we ran out of oil from all other fields. We no longer need that oil to fuel these
battleships, so the federal government is getting out of that business. By letting the private
sector operate the oil field, taxpayers will get a more efficient product at less cost.
The Department of Energy will save taxpayers over $14 billion by privatizing the
Naval Petroleum Reserve and four Power Marketing Administrations, making government
2-14
�contractors more accountable, consolidating research facilities· and programs, and
implementing other streamlining activities.
TRANSPORTATION--AIR TRAFFIC CONTROL
A reinvented government should not perform functions government doesn't do best.
The core federal role in aviation is regulating safety and encouraging infrastructure
investment. The day-to-day operations of the air traffic control system need not be part of
this direct federal role.
The Administration is proposing to transfer the FAA's air traffic control services to
a wholly-owned government Air Traffic Services Corporation. The corporation will not be
subject to federal procurement, personnel and budget restrictions, so it will have the
flexibility to speed modernization of the air traffic system and improve its operating
efficiency.
GENERAL SERVICES ADMINISTRATION
The General Services Administration was created in 1949 to help agencies perform
administrative services cost-effectively and to provide selected administrative services
directly to departments and agencies, taking advantage of economies of scale and avoiding
duplication. But the government has grown in size and complexity in the post-World War
II period and agencies, particularly the larger ones, now provide for themselves most of the
services that GSA offers. Assumptions about economies of scale and the cost-effectiveness
of traditional means of providing goods and services must be challenged and tested in the
current marketplace.
GSA will be transformed into the policy and oversight organization for governmentwide administrative services, except personnel. This will increase agencies' accountability
for results, encourage innovation and better government-wide planning and assure
responsible asset management. The agency will examine its service functions and ask:
"Why can't this service be provided more effectively by the private sector?" If government
must do it, the question will be: "Why should it be done centrally; why can't other
agencies do it just as well?"
·
PERFORMANCE PARTNERSIDPS
The Clinton Administration is reinventing relationships with states and local
governments by consolidating funding and eliminating overlapping authorities, creating ·
funding incentives to reward desirable results and reducing wasteful paperwork. It's time
to focus on outcomes. President Clinton and Vice President Gore are proposing
2-15
�performance partnerships with states and localities that will empower communities to make
their own decisions about how to address their needs and make them accountable for
results. In addition to the HUD performance partnership discussed above, the
Administration's job training improvements highlight the benefits of performance
partnerships. By combining some 70 education and job training programs into one system
which will provide Skill Grants to low income and unemployed workers, the Administration
will give states and local governments substantial flexibility for developing workforce
development programs to meet local needs.
"Government of the future is about m~ver sacrificing our standards of
excellence, never abandoning our responsibilities, but always discarding the
remnants of yesterday's government.. ..... always discarding red tape in favor
of results. " .
0
0
Vice President AI Gore
January 12, 1995
For all of the success to date, reinvention is no short-term challenge. Consider this:
even the most successful businesses have needed years to overhaul their operations in order
to compete in the new economy. The federal. government, which dwarfs even our largest
also need. to continuously renew its processes.
corporations in size,
will
As the process of reform continues, this Administration will accelerate reinvention
efforts, move ahead more boldly and ask even more fundamental questions about what the
federal government does and how it can do it better. President Clinton has asked the
departments and agencies to bring him bold, creative, innovative, new ideas about how to
deliver services and benefits to the American people. They are responding, and. our vision
of a government that works better and costs less is becoming a reality.
2-16
�3. REWARDING WORK
FOR WORKING FAMILIES
Introduction
Earned Income Tax Credit
•
The 1993 expansion gives 15 million working families a tax cut.
•
The credit returns a total of $21 billion to working families making up to $28,500
per year.
•
When fully phased in, the EITC will offer a maximum credit of about $3,560 for
families with two or more children, more than double the maximum basic credit of
$1,511 in 1993.
Making Work Pay -- The Minimum Wage
•
The President has proposed increasing the minimum wage from $4.25 to $5.15 over
two years through two 45-cent increases.
•
~e
proposal would offer 11 million workers a raise and provide a full-time, yearround worker a raise of $1 ,800 a year -- as much as the average family spends on
groceries in over seven months.
•
Over a dozen empirical studies show a proposal like the President's can increase
wages without costing jobs. ·
Family and Medical Leave Act
•
In February 1993, President Clinton signed the Family and Medical Leave Act,
. mandating 12 weeks of unpaid, job-guaranteed leave for childbirth, adoption, or
illness of an employee or family member.
•
The Department of the Treasury estimates that 42.5 million American workers are
covered under the new 'legislation.
•
The General Accounting Office estimates that up to 2.539 million workers were
likely to need unpaid leave in 1993.
3-1
�Welfare to Work
•
•
In its first two years, the Clinton Administration has granted welfare reform waivers
to 25 states to cut through red tape and launch welfare reform initiatives.
•
In June 1994, the Administration introduced the Work and Responsibility Act --the
most sweeping welfare reform plan a President has ever proposed.
•
President Clinton has pledged to launch a National Campaign Against Teen
Pregnancy and his welfare bill includes challenge grants for teen pregnancy
prevention programs at ·1,000 schools around the country and the establishment of a·
national clearinghouse on teen pregnancy.
·
•
President Clinton hosted a national bipartisan working session on welfare reform in
January 1995 with leading officials from both parties and all levels of government.
The session produced a bipartisan agreement to work together to pass sweeping
welfare reform legislation this year.
Child Support
•
The Administration collected a record $9 billion in child support in 1993 -- a 12%
increase over the previous year. President Clinton's welfare reform bill included the
toughest child support enforcement measures ever proposed. The plan would
increase child support collections by $24 billion over the next decade and signal that
both parents have a responsibility to raise the children they bring into this world.
•
The plan's provisions would require AFDC mothers to help establish paternity,
streamline the paternity establishment process, ensure fair child support awards, help
states establish superior processes to· enforce awards, track parents across state lines,
and enable states to set up work and training programs for noncustodial parents who
earn too little to meet their child support obligations.
•
In February 1995, the President signed an executive order to make the federal
. government a model employer in the area of child support, ensuring its employees
are fulfilling fair obligations to their children.
.,
3- 2
�3A. EARNED INCOME TAX CREDIT
•
"The new direction I propose will make this solemn, simple commitment. By
expanding the refundable earned income tax credit, we will make history. We
will reward the work of millions of working poor Americans by realizing the
principle that if you work 40 hours a week and you've got a child in the house,
you will no longer be in poverty. "
President Clinton
February 17, 1993
Actions to Date
With the passage of the Omrubus Budget Reconciliation Act of 1993, the
Administration took the first step toward fulfilling one of President Clinton's strongest
commitments: to ensure that no. child of full-time working parents would have to live
below the poverty level. This expansion, which began in 1994, will be fully phased in
by 1996. This expansion:
•
Gives 15 million working families a tax .cut.
•
Returns a total of $21 billion to working families making up to $28,500 per year
over 5 years.
•
When fully phased in will offer a maximum credit of about $3,560 for families
with two or more children, more than double the maximum basic credit of
$1,511 in 1993.
•
When fully phased in will offer a maximum credit for families with one child of
about $2,156, compared to the maximum basic credit ·of $1,434 in 1993.
•
Will, for the first time, offer a maximum credit of $324 to very low-income
·
workers Without children.
3-3
�Background
Our country was forged by men and women who came to America looking for a
better life. People who were willing to work hard prospered. For many centuries the
American dream was within reach for most Americans because hard work paid off. It paid
with wages that men and women used to support their families.
Yet the promise of hard work started to flicker in the 1970s. Adjusted for inflation,
wages for the average worker were essentially no higher in 1993 than they had been twenty
years earlier. For the first time in many generations, children earned less than their parents
had. Each year, working men and women seemed to have to toil harder, just to stay in the
same place.
The toll was particularly hard on young families. No longer could one take a job
and be sure of supporting a family. In 1979, all but 12 percent of full-time jobs paid
enough to support a family of four above poverty. By 1993, the figure had climbed to 16
percent. More young working families were poor. Like most Americans they responded
by working still harder, with increasing tolls on family life.
The Initiative
In his first major address to the nation on February 17, 1993, the President
committed to expanding the EITC in order to make work pay for· young families. Instead
of using the tax system to take money away from low and moderate income working
families, it would be used to reward them for their hard work. He called for expanding the
Earned Income Tax Credit (EITC), which might better be labelled the working family tax
credit.
The EITC amounts to a pay raise for the working poor. For every dollar a low
income family with children earns -- up to a certain maximum -- they earn additional tax
credits they can collect in a refund. The EITC has enjoyed strong bipartisan support for
many years. First adopted in 1975, the EITC is nearly universally acknowledged to be a
powerful way to help working families struggling to make ends meet. And it provides
support, without stigma, without interference in the marketplace, and with almost no
bureaucracy.
But unlike any of his predecessors, President Clinton called for raising the EITC to
the point where any person who works full-time, even at a minimum wage job, earned
3- 4
~
�enough so that, combined with food stamps, he or she could keep a family of four out of
poverty. He also called for increasing the credit so that families struggling above poverty,
with incomes up to a~out $28,500 also benefitted from an increase in the credit.
The President proposed and the Congress adopted a dramatic expansion in the EITC.
With the EITC, a worker earning under $8,900 with two children, will effectively receive a
40% pay increase by 1996. Every dollar of his or her earnings will bring 40 cents in tax
credits in 1996. A family with a full time minimum wage worker could qualify for up to
$3,560 in EITC from the government--$2,500 more than they would have in 1990. Even
families earning $25,000 per year benefit from the EITC. In 1996, they would qualify for
nearly $750 in tax rebate. In 1990, they would have received nothing.
Indeed, one of the great untold stories of the budget which passed in 1993 -- the first
year of the Clinton presidency -- is that it dramatically lowered taxes and increased incomes
for millions of working families. Twenty million taxpayers will take advantage of the EITC
in FY 1995 with resulting tax cuts reaching $22 billion. Eighty percent of these claims were
refunded as direct payments to families. When fully phased in 1996, 16.1 million families
are expected to take advantage of the credit with tax cuts totaling $25.2 billion.
Under present law, EITC claimants can opt to receive part of the EITC in advance
payments throughout the year, rather than wait to flle for a lump-sum refund. However,
only a small percentage choose to do so. While reasons vary for the low utilization rate for
advance payments, it is partly due to a lack of information and the fact that employers are
responsible for determinlng eligibility and administering the advance payments. In President
Clinton's Welfare Reform Bill-- the Work and Responsibility Act of 1994 --he proposed
that States be allowed to conduct demonstration projects to make advance payments of the
EITC through a State agency. Welfare recipients who move to the workforce could particularly benefit from receiving the EITC in advance payments throughout the year because they
would experience the rewards from work on a more timely basis.
The EITC offers a genuine alternative to welfare. By going to work, rather than
remaining on welfare, families can earn tax credits which make their income exceed welfare
payments. By doing the right thing for their own dignity and independence, they are also
doing the right thing for their families economically. By moving toward independence, they
are being rewarded, rather than penalized.
3-5
�38. RAISING THE MINIMUM WAGE
Action to Date
•
On February 3, 1995, the President's proposed an increase in the minimum wage
from $4.25 to $5.15 over two years, through two 45 cent increases. The last
increase, passed by an overwhelming, bipartisan vote in 1989,' and implemented
in 1990 and 1991, was also a 90 cent increase in two 45 cent stages.
Background
Americans know a raise in the minimum wage is one way to help make work pay.
A higher minimum wage --a floor to ensure workers that they're getting a fair deal for
their efforts -- provides a foothold into the middle class for many hardworking Americans.
And for those Americans who already rely on the minimum wage, an increase is essential
to their standard of living~
·
Minimum wage work just does not pay. The real value of the minimum wage is
now 27 percent lower than it was in 1979, and by next year -- if it is not increased --the
minimum wage will be at its lowest real level in four decades. Contrary to popular
opinion, the average worker affected by an increase in the minimum wage is not just a
teenager flipping hamburgers. The fact is that the average minimum wage worker brings
home half of his or her family's earnings, and that two-thirds of minimum wage workers
are adults. Furthermore, an increase in· the minimum wage will help working families get
by: for example, just a ninety cent per hour increase in the minimum wage means an
additional $1,800 for a minimum wage earner who works full-time, year-round -- enough
for the average family to pay for groceries for seven months.
$4.25 an hour is not enough earnings to pay the bills, and $8,500, for a year of
full-time work, is not a decent, livable income. At the same time as inflation has stolen
much of the value of the minimum wage, the condition of America's working poor has
declined. The Bureau of Labor Statistics estimates that, adjusted for inflation, the average
hourly wage of male high school graduates fell by 19 percent since 1979, and by 3 percent
for female high school graduates. High school drop outs have fared even worse. This
3- 6
.,
�trend of declining real wages for less-skilled Americans has continued for 15 years.
"
Most disturbing, less-skilled workers have done poorly in times of economic growth
as well as in times of economic downturns. The U.S. economy created more jobs in 1994
than in any other year in the past decade, and the unemployment rate fell to a four year low
while the help wanted index climbed to a four year high. Yet the prosperity of this
recovery, and of the past 15 years, has not been shared by all our citizens.
The Initiative
President Clinton's proposal to increase the minimum wage 90 cents an hour over
two years can help lift the lives of the el~veri million Americans who currently earn less
than $5.15 an hour. For those workers putting in 40 hours a week, all year round, this
minimum wage increase provides $1,800, which is enough money for the average American ·
family to buy groceries for seven months.
The most productive and powerful country in the world does not even guarantee its
people that if you work full-time, year round -- even with the Earned Income Tax Credit
(EITC) --that you can raise a family out of poverty. To that end, President Clinton made a
simple compact with the nation: if you work 40 hours a week, you will not have to bring
up your children in poverty.
In pursuit of this objective, the President expanded the EITC as a way for low and
moderate income families to make ends meet. But expanding the EITC is not enough. In .
order to ensure that there is a strong incentive for work over welfare, there needs to be a
multi-tiered strategy. The EITC has fulfilled its part of this plan, now, the President has
proposed an increase in the minimum wage to make every hour of work pay more.
With a 90-cent minimum wage increase, food stamps, and the EITC, a family of
four with a full-time, year round minimum wage worker would be ·lifted above the poverty
line. Simply, a $5.15 minimum wage would provide every American the simple guarantee
that they could raise a family out of poverty, if they were willing to fulfill their side of the
bargain: to work hard and play by the rules. . ·
. The critics claim, though, that an increase in the minimum wage will not guarantee a
brighter future for working Americans, but will cost jobs for exactly the people that the
President is trying to help. But their criticism is off.;.target. Over a dozen studies have
found that increases in the minimum wage have had an insignificant effect- on employment.
Several of these studies even extended previous ones that had claimed that raising the
3- 7
�minimum wage decreases employment and these studies, when updated, no longer find a
significant impact. This "new view" is gaining support among economists: Professor
Robert Solow, a Nobel laureate in economics, commented: "When the minimum wage has
deteriorated so much fn purchasing power, there are probably enough people who would be
worth the higher wage and would not lose their jobs." Solow also notes that, "[T]he
evidence of job loss is weak. And the fact that the evidence is weak suggests that the
impact on jobs is small." And in a recent review of the literature, Professor Richard
Freeman of Harvard, a widely respected labor economist, wrote: "At the level of the
minimum wage in the late 1980's, moderate legislated increases did not reduce employment
and were, if anything, associated with higher employment in some locales."
If the minimum wage doesn't cost jobs, critics say, then it certainly doesn't help the
neediest workers. They base their views on the conclusion that the typical minimum wage
worker is a middle-class high school student. The facts suggest otherwise. Only one in 14
workers earning between $4.25 and $5.15 per hour is a teenaged student from a family with
above-average earnings. Fully 4 7 percent of workers who would be affected by the
President's proposal have family earnings in the bottom 20 percent of all working families;
families that earn less than $360 per week. The average worker who would be affected by
the President's proposal brings home half of his or her family's earnings; 38 percent of
those affected are the sole breadwinner in their family.
Despite the criticism in some comers, the minimum wage has traditionally had
bipartisan support. In 1989, the minimum wage increase passed the House by a vote of
382 to 37 (with 135 Republicans voting for the bill), and 89 to 8 in the Senate (with
support of 36 Republicans).
The current situation -- with the real minimum wage heading for its lowest real level
in 40 years and with more and more workers fmding that full-time work doesn't pay -- is
unacceptable. And a reasonable remedy is at hand.
·
3- 8
•
�3C. THE FAMILY AND MEDICAL
LEAVE ACT OF 1993
"Family and medical leave is a matter of pure common sense and a matter of
common decency. It will provide Americans what they need most: peace of mind.
Never again will parents have to fear losing their jobs because of their families. "
President Clinton
Remarks on the Signing of the
Family and Medical Leave Act
February 5, 1993
Actions to Date
President Clinton signed the Family and Medical Leave Act into law on February
5, 1993, fulfilling his pledge to "treat families right."
•
The Act guarantees 12 weeks of unpaid, job-guaranteed leave for childbirth,
adoption, or illness of the employee or a family member.
•
The Department of the Treasury estimates that 42.5 million American workers
are covered under the new legislation.
·•
The General Accounting Office estimates that up to 2.539 million workers were
likely to need unpaid leave in 1993.
Background
Until President Clinton signed the Family and Medical Leave Act (FMLA) on
February 5, 1993, the United States was the only country in the industrialized world --with
the exception of South Africa -- that did not provide family leave protection to workers.
The F:MLA replaced measures twice vetoed by former President Bush.
3- 9
�The Initiative
"/ know that men and women are more productive when they are sure they
won't lose their jobs because they're trying to be good parents, good
children. Our businesses should not lose the services of these dedicated
Americas. And over the long run, the lessons of the most productive
companies in the world, here at home and around the world, are that those
that put their people first are those who will triumph in the global economy. "
President Clinton
Remarks on the Signing of the
Family and Medical ·Leave Act
February 5, 1993
The Family and Medical Leave Act promotes "family values" in the fullest sense by
enabling an estimated 40 to 50 million working Americans to balance the demands of their
workplace with the needs of their families. Before they were covered by the Family and
Medical Leave Act, ~uch employees were forced into agonizing choices between keeping
their jobs and· taking care of their loved ones. Hospitalized employees routinely lost their
jobs -- as well as their health insurance --for "excessive absenteeism." Working parents
who had to leave work to take care of ill or aged parents were being frred.
The Family and Medical Leave Act has not only helped workers facing difficult
family or medical situations, it has also proven beneficial to employers. As many of
America's most respected business leaders testified during legislative hearings, there is a
direct correlation between stability in the family and productivity in the workplace. The
costs incurred in providing leave are more than offset by savings realized from lower
turnover, higher productivity, and reducing or avoiding the costs of training new employees.
Despite sensational predictions by FMLA opponents that the Act would prove
ruinous to business, the experience of the first year and a half indicates that the federal
legislation has caused little disruption or expense to employers. As many companies have
discovered, providing family and medical leave is not only the right thing to do; it is also
cost-beneficial.
For example, the software and computer services company Compuserve had a policy
similar to F:MLA in place two years before the Act went into· effect and found it relatively
easy and inexpensive. And it paid offhandsomely in company loyalty. Other companies
have had similar experiences. According to the New York Times. attrition at Aetna Life
3 - 10
"
�and Casualty dropped from 23 percent in 1986 to 9 percent in 1990 after the firm adopted a
family and medical leave policy.
The Family and Medical Leave Act of 1993 became effective on August 5, 1993 for
most private and public sector employees. The legislation allows eligible employees up to
12 weeks of unpaid leave for specific family and medical reasons, such as the birth or
adoption of a child, care of a spouse, child or parent who has a serious health condition, or
when a serious health condition that makes the employee unable to perform his or her job.
An employee returning from Family and ·Medical leave is entitled to the same or an
equivalent position as he or she held before the leave and is entitled to the continuation of
health insurance benefits.
In the first year-an!i-a-half that the Act has been in place, most employers have
demonstrated that they want to do the right thing, once they understand what is required.
The vast majority (91 %) of valid complaints have been easily resolved, usually over the
telephone, without the need for litigation or any complex administrative procedure.
Case Study:Employee Terminated for Attending
to Critically-Ill Husband in Intensive Care
"Jane Smith" and her husband, "Joe," were both involved in a serious car
accident and taken by ambulance to the hospital. Although Jane. was treated and
released, her husband was admitted to the intensive care Unit. When Jane asked her
employer for leave to care for her husband, she was told to take "whatever time she
needed." Each day she called in to work and let her supervisor know the current
situation. When Jane called in on the seventh day and reported that her husband's
condition had worsened, she was told to report to work immediately. Leaving the bed
side of her critically-ill husband, she arrived at the office to be informed that she was
being terminated because of "excessive absences." A desperate Jane called the
Department of Labor (DOL), the federal agency responsible for enforcing the FMLA.
A DOL official explained the law to the employer's lawyer, who understood that Jane
was entitled to Family. and Medical Leave while her husband was seriously ill. Jane
was immediately reinstated and granted leave.
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�Case Study: Employee on Cancer Surgery Leave
Terminated Because Employer Feared Increase
in Insurance Rates
Foil owing her cancer surgery and treatment, "Maria Lopez" had been recovering
at home for a month and four days. Now she was feeling much better and had been
cleared by her doctor to return to work. But when she advised her employer that she
was ready to come back, the employer terminated Maria, instead of restoring her to her
job. Maria contacted the Department of Labor, which discussed the situation with her
employer. The firm readily acknowledged that Maria was an excellent employee, but
had fired her anyway because they were self-insured and feared rising insurance rates if
Maria had a relapse.
The· Department of Labor explained that under the FMLA, the employer was
required to grant leave to an eligible employee with a serious health condition -- such as
Maria's· -- and to reinstate her to the same or a comparable position when she returned.
The employer agreed to reinstate Maria, but fired her three weeks later. DOL once
again contacted the employer and advised the firm that employees may not be
discriminated against for filing FMLA complaints. Maria was not only reinstated, but
was also compensated for the pay she lost during the time she was not allowed to return
to work.
3 - 12
�30. WELFARE-TO-WORK
•
Last year I introduced the most sweeping welfare reform plan ever presented by an
Administration. We have to make welfare what it was meant to be -- a second chance,
not a way of life. We have to help those on welfare move to work as quickly as possible,
to provide child.care and.teach them skills if that's what they need for up to two years.
And after that, there ought to be a simple hard rule: anyone who can work must go to
work.
President Clinton
State of the Union Address
January 24, 1995
'
3 - 13
�Actions to Date
•
To date, the Clinton Administration granted welfare reform waivers to 25
states -- more than the previous two administrations had granted in 12 years.
These waivers cut through federal rules and red tape so that states can launch
. their own initiatives to reform welfare.
•
After a year of bipartisan consultation with state and local officials, members of
Congress, reform experts, citizens, and people on welfare, the Administration
introduced a sweeping welfare reform plan in June 1994. The New York Times
called the Clinton plan "a genuine attempt to impose the toughest work
requirements ever attached to welfare, the first serious effort by any President,
Democrat or Republican, to stop the disastrous generational cycle of America's
dole society." (NYT Magazine, 7/31194)
•
President Clinton has pledged to launch a National Campaign Against Teen
Pregnancy. The welfare reform plan the ·Administration proposed in 1994
included challenge grants for teen pregnancy prevention programs at 1,000
schools around the country. The President has also challenged business, civic,
and religious leaders, foundations, and parents to join in an initiative outside
government to attack the growing problem of teen pregnancy and births ·outside
marnage.
•
President Clinton hosted a national bipartisan working session on welfare reform
in January 1995 with leading governors, members of Congress, and local
officials from both parties. The session produced a bipartisan agreement to work
together to pass sweeping welfare reform legislation this year that will move
people from welfare to work, discourage teen pregnancy and encourage
responsible parenting, set the toughest possible national standards for child
support enforcement, and give states more flexibility in return for more
accountability.
•
i
3- 14
�Background
•
"Last year I introduced the most sweeping welfare reform plan ever
presented by an Administration. . We have to make welfare what it was meant
to be -- a second chance, not a way of life. We have to help those on welfare
move to work as quickly as possible, to provide child care and teach them
skills if that's what they need for up to two years. And after that, there. ought
to be a simple hard rule: anyone who can work must go to work."
)
President Clinton
State of the Union' Address
January 24, 1995
There is near universal consensus that the present welfare system is broken. The
public disdain is clear in polls and talk shows alike. And the harshest critics of all are the
supposed beneficiaries-- welfare recipients themselves. They talk of a system which isolates
and stigmatizes. A system that seems to penalize them when they try to go to work, and
sends the message that welfare recipients should not work.
President Clinton has been on the forefront of the effort to fix the welfare system both
as a State Governor and as President. As Governor he led the effort, along with Senator
Moynihan, to pass the Family Support Act of 1988 (FSA). As President he has led the way
with the introduction of the Work and Respoilsibility Act of 1994.
·
· The 1988 reforin reflected a growing expectation that welfare should be a transitional
period of preparation for work and self-sufficiency. For those without sufficient work skills
or education it would provide the necessary education, training and job search assistance
activities through the Job Opportunities and Basic Skills (JOBS) Training program. For
many welfare recipients, the JOBS program has worked, and they have moved off welfare
and into the workforce. Unfortunately, the FSA did not change the welfare system as much
as was intended. Many states did not have the ability to draw down the full amount of
available funds as a weak economy in the initial years after enactment put additional demands
on state budgets and AFDC caseloads mushroomed. Broad exemptions also limited the
program participation. Even after 1988, the welfare system was primarily a system designed
to get money to people who were not working, rather than one designed to move people to
self-support.
As the President has pledged, it is time to end welfare as we know it, and to create a
system that is based on work and responsibility designed to heip people help themselves. We
need to move beyond the old debates and offer a simple compact that gives people more
opportunity in return for more responsibility. Work is the best social program this country
has ever devised; it gives people hope and structure and meaning to their daily lives.
3 - 15
�i'
Responsibility is the value that will enable individuals and parents to do what programs
cannot --because governments don't raise children, people do. And ultimately, we need to
change the very culture of welfare offices, from writing checks to helping people move off
welfare. It's time for the welfare system to reflect our values as Americans.
I
The Initiative
The Administration vision is straightforward: People should not have children until
they are ready to support them. Parents - both parents - have responsibilities to support .
their children. Government has an important role to give people a hand up and give people
access to the skills they need - but we· can and should expect work in return. And support
should be limited to a maximum of two years of cash assistance during which time the
recipients should be in job placement or training or education so as to move off aid as
quickly as possible. After two years people should be expected to work, preferably in the
private sector, but in community service jobs if necessary. Anyone who is willing to work
ought to be able to support their family. But those who are able but not willing to work,
should not be eligible for welfare.
In June of 1993, President Clinton formed a Working Group to develop a welfare
reform plan. The Working Group actively sought input from State Governors, State
administrators and the public. Five hearings were held throughout the country in Illinois, ·
Washington, D.C., New Jersey, California and Tennessee. Members of the Working Group
and staff met with some 250 different organizations and took testimony from 150 groups.
The Working Group visited many welfare offices to observe first hand the problems with
the existing system and to discuss these problems with caseworkers. Most importantly,
perhaps, the Working Group sought input from those most affected by welfare reform welfare recipients themselves. The Working Group met with over 100 welfare recipients
and heard about the struggles they endure daily: with poverty, with the welfare system that
is often demeaning, stigmatizing and isolating, and with the difficulties in leaving welfare
and fmding work that can support their families.
The plan, which was introduced in Congress in June, 1994 as the Work and
Responsibility Act of 1994, has four major principles: 1) work, 2) responsibility, and
3) reducing teen pregnancy and births outside of marriage; and 4) state flexibility and
accountability.
1. Work
Making Welfare a Transition to Work: The plan the Administration proposed last year
3 - 16
I
�. ii, I
!
~
I
changes the focus of welfare to helping people get jobs, not writing them checks for life.
From the first day, the new system would focus on making recipients self-sufficient.
Working with a caseworker, each recipient will develop an employability plan identifying
the education, training, and job placement services needed to move into the workforce.
Participants who are job-ready would be immediately. oriented to the workplace. Parents
who refuse to stay in school, look for work, or attend job training programs would be
sanctioned. For the first time, time limits would be imposed - receiving welfare cash
benefits, without work, would end after two years. (While there would be appropriate
exceptions for the disabled or those with disabled children, existing exemptions would be
reduced.)
·
Those people unable to find work at the end of two years must go to work,
preferably in the private sector, but in a community service job if necessary. People would
be paid for the hours they work - this is work, not workfare .
. Supporting Working Families: The EITC, Health reform, Child Care and Minimum
Wage. -- Work must pay so that a person leaving welfare for work is better off than on
welfare. The earned income tax credit (EITC) expansion, enacted by the Administration in
1993, is one important way to help support working families. Under the welfare reform
proposal, four states would be able to work with the Treasury Department to issue the EITC
on a monthly basis. Health care reform remains vitally important - we have to ensure that
those leaving. welfare for work don't lose health care coverage. We should expand child
care for those leaving welfare for work and for low-income working families. Finally,
increasing the minimum wage would make every hour of work pay more and guarantee that
a worker willing to work hard can raise a family out of poverty.
2. Responsibility
"We should demand responsibility from parents who bring children into the
· world, not let them off the hook and expect the taxpayers to pick up the tab
for their neglect. "
President .Clinton
National Association of Counties
March 7, 1995
....
Parental Responsibility. -- Both parents have a responsibility to support their children.
The plan calls for the toughest child support enforcement measures in the history of this
3 - 17
�country. This includes universal paternity establishment efforts and education and outreach
efforts aimed at stressing the importance of paternity establishment. Young people should
be taught that parenting a child brings real responsibilities, and that they should not become
parents until they are able to nurture and support their children. The plan also provides for
regular awards updating, a national child support clearinghouse to track delinquent· parents
across state lines, and tough enforcement measures such as license revocations.
Accountability for Taxpayers. -- To eliminate fraud and ensure that every dollar is used
productively, welfare reform will coordinate programs, automate files, and monitor receipt
of benefits through a national public assistance clearinghouse and state tracking systems.
Performance, Not Process. -- The plan the Administration proposed last year demands
greater responsibility of the welfare office itself, existing programs will be better
coordinated and simplified and improved incentives will be directly linked to performance.
Under a separate initiative developed by Vice President Gore, States will be encouraged to
move toward Electronic Benefit Transfer, leading to reduced fraud and substantial savings
in administrative costs. The plan also calls for increased state flexibility - allowing states to
try innovative approaches within broad parameters designed to ensure that children are
appropriately protected.
3. Reducing Teen Pregnancy
"We must discourage irresponsible behavior that lands people on welfare in
the first place. We must tell our children not to have children until they are
married and ready to be good parents. "
President Clinton
National Association of Counties
March 7, 1995
Preventing Teen Pregnancy. -- To prevent welfare dependency in the frrst place, teenagers
must get the message that staying in school, postponing pregnancy, and preparing to work
are the right things to do. The President has called for a National Campaign Against Teen
Pregnancy, with a national clearinghouse on teen pregnancy, mobilization grants and
demonstrations in middle and high schools, and most important, an initiative outside
government that brings parents, religious, civic, and business leaders, and foundations
together to change the signals we send the next generation.
A Clear Message for Teen Parents. --Teenagers who have children will face
responsibility- they will be required to stay in school, live at home or with a responsible
adult, and identify the fathers. At the same time, caseworkers will work closely with them,
3 - 18
�•
••
offering them encouragement and support, assisting them with living situations, and helping
them access services such as parenting classes and child care .
4. State Flexibility and Accountability
"In the last two years we made a good start in continuing the work of welfare
reform. Our Administration gave two dozen states the right to slash through
federal rules and regulations to reform their own welfare systems, and to try
to promote work and responsibility over welfare and dependency. "
President Clinton
State of the Union Address
January 24, 1995
As a former governor, President Clinton has worked hard to give states the
flexibility they need to reform the welfare system. In its first two years, the Clinton
Administration granted welfare reform waivers to 25 states -- more than the previous ·two
administrations had granted in 12 years. These waivers cut through federal rules and red
tape so that states can launch their own initiatives to reform welfare.
The welfare reform plan. the Administration proposed last year provided
unprecedented flexibility to the states. Under the plan, many initiatives that currently
require a waiver -- such as expanding work incentives, removing penalties for two-parent
families, and denying additional benefits for additional children conceived on welfare -would become options that states could carry out on their own, without having to ask
special permission from Washington.
The Clinton Administration is committed through welfare reform and many other
initiatives to giving the states much greater flexibility, and changing the way Washington
works to begin holding the states accountable for real results, instead of dictating all the
processes by which states achieve those results.
The plan the Administration proposed last year would dramatically change the nature
of the welfare system from one that just writes checks to one that helps people get
paychecks. By the year 2000, under this reform proposal, 2.4 million adults would be
subject to the new rules, including time limits and work requirements; almost one million
people would either be off of welfare or working; 873,000 recipients would be in school or
training programs leading toward employment; and federal child support collections would
more than double to $20 billion. Most importantly, children will be better off.
3 - 19
�Case Study: Ohio's "State of Opportunity" program
•
Ohio received approval from the Clinton Administration to implement its State of
Opportunity 11 welfare reform program on March 7, 1995. The goal of the new project is
to increase the incentives for welfare recipients to go to work. The key elements of the
State of Opportunity program include working with the private sector to create wagesupplemented jobs for welfare recipients, expanding eligibility for two parent families,
extending transitional child care for those moving from welfare to work, increasing
earnings disregards, and encouraging education by requiring school attendance for
dependent children. The project builds on Ohio's Learning, Earning and Parenting
(LEAP) Program, implemented in 1989, in which teen parents are encouraged to stay in,
or return to school. The demonstration will operate for five years.
II
Case Study: Florida's Family Transition Program
Florida's Family Transition Program is testing time limits for achieving fmancial
independence, combining the threat of benefit loss with intensive case management and
assistance in preparing for and fmding work. The project encourages families to work
and get off of welfare by increasing earnings disregards and asset limits, and extending
transitional medical care and child care benefits. To encourage parental responsibility,
the demonstration requires dependent children to be immunized and attend school
regularly. The Family Transition Program began operating in February of 1994.
Case Study: Indiana's Manpower Placement and Comprehensive
Training Program (IMPACT)
Indiana's IMPACT embodies President Clinton's ideal that welfare should be a
transitional support system, not a way of life, which provides opportunity, but demands
responsibility in return. Through IMPACT, Indiana is promoting work and responsibility
by imposing time limits on cash benefits; requiring recipients to create a personal
responsibility plan; increasing asset limits and earnings disregards; extending transitional
management; eliminating the 100 hour rule for recipients
.support services, including
in the AFDC Unemployed Parents (AFDC-UP) program; and requiring children to stay in
school and be immunized. Indiana's welfare reform program, approved in December,
1994, makes work pay and provides assistance families need to move from dependence to
independence.
case
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••
�3E. CHILD SUPPORT
•
We have to make responsibility a way of life. If deadbeat parents paid all
the child support they should in this country, we could immediately move
over 800,000 mothers and childten off welfare.
President Clinton
Radio Address
March 18, 1995
.. .,
3 - 21
�Actions to Date
In June 1994, President Clinton introduced the Work and Responsibility Act of
1994, which contains the toughest child support enforcement measures ever in the history
of the country. The plan would collect billions more in support, and send a clear signal
that both parents have a responsibility to raise the children they bring into this world.
The plan w~uld:
1)
require that AFDC mothers fully cooperate with efforts to establish paternity
before they can receive welfare benefits;
2)
expand outreach and education programs aimed at voluntary paternity
establishment;
3)
streamline the paternity establishment process and impose tough paternity
establishment requirements on the states;
4)
ensure fair child support award levels that are regularly updated;
5)
create a more uniform and service-oriented program by giving all states the
effective enforcement tools and techniques that the best states have used and
proven to be successful -- such as denying drivers and professional licenses to
parents who refuse to pay;
6)
create a National Clearinghouse to track delinquent parents across state lines and·
ensure that states can efficiently collect support in these cases;
7)
create a state option to make money available for work and training programs for
noncustodial parents who earn too little to meet their child support obligations. ·
In February 1995, the President signed an executive order to crack down on federal
employees who owe child support.
In 1993, the federal government collected a record $9 billion in child support-- a
12% increase over the previous year.
·
Background
Almost everyone agrees that the child support system is badly in need of overhaul.
According to a recent Urban Institute study, there. is a gap between what is currently
received in child ·support and what could potentially be collected of $34 billion dollars
annually. Child support enforcement is vitally important for millions of families - in 1991,
14.6 million children lived iri a female headed family, almost triple the number in 1960,
3- 22
�and 56 percent of them lived in poverty.
The present child support system, initiated in 1975, involves a joint federal and state
effort. The Federal government provides partial funding for state child support enforcement
programs, and the Federal Office of Child Support Enforcement provides technical
assistance to states and operates the Federal Parent Locator Service. States are required to
provide child support enforcement services, although the way they do this varies
tremendously.
The Family Support Act of 1988, championed by then Governor Clinton,
strengthened the Child Support program considerably. The Omnibus Reconciliation Act of
1993, signed by President Clinton, requires states to implement in-hospital paternity
establishment programs, a proven cost-effective way of establishing paternity .
. These recent legislative initiatives are having an impact, but they still don't ensure
that millions of parents who should be paying child support are doing so. In 1989, of the
over ten million women potentially eligible for child support, 42 percent did not even have
an award, and another 12 percent had an award, but actually received nothing. Indeed only
26 percent of those potentially eligible both had an award and received the full amount.
Thus, millions of noncustodial parents do pay support, often because they care deeply about
the well being of their children. But many more do not pay, or pay less than they .should.
Unfortunately the child support system seems to be sending the message in all sorts of
ways that once a parent ceases living with their child, their responsibilities for supporting
and nurturing the child· end.
One of the major reasons for this failure is the lack of paternity establishment.
Paternity is established in only about one-third of cases, in large part because efforts do not
keep up with the continuing increase in out-of-wedlock births. Because the enforcement
systems are often weak, many noncustodial parents who do not pay support have been able
to elude state officials, leaving a perception that the system can be beat. Interstate cases,
which represent about one-third of all child support awards, continue to pose a major
problem because states do not have similar laws governing essential functions, and there is
~o effective way to track delinquent parents across state lines.
...
Child support must be treated as a central element of social policy, not only because
it will save welfare dollars, but also because children have a fundamental right to--and need
for-- support from both their parents. It is central to a new concept of government, one
where the role of government is to aid and reinforce the proper efforts of parents to provide
for and nurture their children, rather than the government substituting for them.
3- 23
�The Initiative
President Clinton introduced his child support reform plan to Congress as part of his
welfare to work proposal, the Work and Responsibility Act of 1994. The plan truly does
contain the toughest child support enforcement measures ever in the history of the country.
It will collect billions more in support. And it contains a few simple elements.
Paternity Establishment. The first principle is that paternity establishment ought to be
the starting point for child support that works. We need to send a clear message to parents especially young parents - that bringing a child into this world brings with it real
responsibilities. For fathers this means that fathering a child will bring real and immediate
fmancial consequences. Paternity establishment ought to be seen as a right of the child- a
right to fmancial support, absolutely - but perhaps even more importantly, a right to the
emotional connection and the chance for a nurturing relationship with the father.
And mothers should cooperate in establishing paternity. Our system should say to
mothers, "Help us identify and locate the father, or you cannot get public aid, because
parents have the primary responsibility for supporting their children." But at the same time,
we also need to hold the state child support agencies responsible, and if the mother has done
her part, they should be held accountable for having effective programs to get paternity
established.
The child support plan builds on the in-hospital paternity establishment programs
passed as part of the Omnibus Reconciliation Act of 1993. The plan requires that AFDC
mothers fully cooperate with efforts to establish paternity before they can receive welfare
benefits. It expands outreach and education programs aimed at voluntary paternity
establishment and promoting the importance of paternity establishment as both a parental
responsibility and a right of the child. It streamlines the paternity establishment process so
that paternity can be established more quickly and easily. Performance incentives will
encourage states to establish paternity for all births.
Fair Awards. Once paternity is established, we need to ensure that the child support
award amount is fair. This means that it considers the needs of the child first, but that it
also reflects the current ability of the noncustodial parent to pay support. A commission will
study whether national awards guildelines should be adopted. States will automatically
update awards for families as non-custodial parents' incomes change.
Tough penalties to ensure collection. And once a fair child support obligation is
established it ought to be paid - no exceptions, no excuses, no. way out. Once fair child
support awards are set they will be collected through a more uniform and service-oriented ~
program. All states will be given the effective enforcement tools and techniques that the best
3- 24
......
�states have used and proven to be successful. States will be able to use central registries of
child support orders to track cases, making use of economies of scale and modem technology
to handle routine cases in volume. Wage withholding orders will commence immediately at
the time the obligor is hired and states will withhold drivers and professional licenses if .
parents who are able to pay support refuse to do so. Changes in the funding and incentive
structure would encourage and reward states for good performance.
Interstate tracking. Finally, interstate cases ought to receive the same attention as
other cases. We need the capability to track parents _across state lines so that people are
unable to evade their responsibility simply by moving to the next state.
Under the President's plan, the federal government will assist in tracking the
interstate cases to ensure efficient location and enforcement when people cross state
boundaries. A National Clearinghouse will track delinquent parents across state lines and
uniform laws for interstate cases will ensure that states can efficiently collect support in these
cases.
Work reguirements. The reform plan would, for the first time, create a state option
to make money available for work and training programs for noncustodial parents who earn
too little to meet their child support obligations. Ultimately, anything we ask of mothers we
should also ask of fathers. States can choose to make these programs mandatory - so that
noncustodial parents work off what they owe. At the same time, demonstration grants for
parenting and access programs- providing mediation, counseling, education, and visitation
enforcement- would foster noncustodial parents' ongoing involvement in their children's
lives.
Case Study -Maine
.•
The State of Maine recently enacted a "Deadbeat Dads" bill to withhold licenses
from parents who are delinquent on their child support obligations. The State found that
the threat of suspension is really the most powerful deterrent, absent parents usually pay
after receiving ·warning letters. "The Maine plan is designed not to suspend thousands
of licenses," says State representative Sean Faircloth, "but rather to create a credible
sanction that will motivate deadbeat parents to pay up." Maine's program expects to
collect an additional $4.7 million biennially for AFDC families and $12 million for
families not on welfare. The Clinton plan would give every state the authority to follow
Maine's lead in denying driver's and professional licenses to those who refuse to pay
the child support they owe.
3- 25
�4. LIFELONG LEARNING
Introduction
•
"We can do all these things -- put our economic house in order, expand world
trade, target the jobs of the futur.e, guarantee equal opportunity -- but if we 're
honest, we '/I 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. "
President Clinton
State of the Union Address
January 25, 1994
Pre-School and Parenting, so that every child starts school ready to learn.
•
•
•
Reformed Head Start· to create tough new quality standards, reduce child-to-teacher
ratios, expand services, and create the new Early Head Start for infants and toddlers.
Expanded Head Start to enable over 130,000 more children to participate in 1995
than in 1992 --with a proposed increase of 31,500 for 1996.
Introduced the new Early Head Start for infants and toddlers.
Goals 2000 and School Improvement, to enable our K-12 students to pursue challenging
academic standards--and meet them.
•
•
•
Signed the Goals 2000: Educate America Act, including the Safe Schools Act, and.
the Improving America's Schools Act, to provide top-down support for bottom-up
·
reform.
Empowered teachers, principals, and parents to change the way schools work -- With
cutting-edge technology, challenging academic standards for what students should
know, renewed commitment to involving parents in schools, and new, flexible
partnerships with states and communities -- cutting red tape so that communities can
tailor their schools to meet their children's needs.
Kicked off an anti-crime initiative inside schools to make sure students can learn in
safety, not fear.
Scbool..;to-Work Opportunities, to prepare all young people for further education and first
jobs that lead to high-wage, high-skill careers.
4-1
�•
•
Signed the School-to-Work Opportunities Act to support efforts in all 50 states to
create and reform school-to-work systems. The Act has sunsets in 2001 -- a limited
national catalyst for local initiatives.
Every school-to-work initiative will enable all participants to develop high-level
academic and technical skills, obtain a high school diploma and an occupational
skills certificate, and move toward further training and first jobs that lead to highskill, high-wage careers.
· National Service, so young people have a change to help their communities -- and help pay
for college, too.
·
•
•
•
•
Signed the National and Community Service Trust Act, creating AmeriCorps, the
new national service initiative.
AmeriCorps gives young people the chance to spend a year or more in tough, direct
award of
service making our people safer, smarter and healthier --while earning
nearly $5,000 per year to pay for college or job training.
AmeriCorps already engages 20,000 Americans as AmeriCorps Members in more
than 350 community efforts around the country.
AmeriCorps relies on the initiative of communities and the support of states to
change communities from the inside out-- not with bureaucracy, but with citizens
helping each other and building voluntary organizations -- getting things done.
an
College Loans, so that every American is ·able to borrow the money to pay for college and
pay it back on an affordable schedule. ·
•
•
•
•
Signed into law the biggest change in student loans ever--a new direct lending
program which takes the middlemen out of the process.
Will enable any student to get loans for college or job training and repay them in
one of four ways, including "pay-as-you-can" repayment as a small percentage of
income over time. Students can change repayment plans throughout the life of their
loans, and '"pay-as-you-can" gives them more freedom to choose careers without
repayment as a dominant concern.
Dramatically cut back red tape, making it faster and easier for students to get the
money to pay for college.
Will save taxpayers more than $6 billion by the year 2000.
Training and Reemployment, so Americans can continuously learn to obtain better jobs
and better wages.
President Clinton has signed into law major reforms in the first five areas. In the
sixth, training and reemployment, be has taken major strides --and proposed comprehensive
reforms for this Congress to enact.
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...
�4A. PRE-SCHOOL: HEAD START REFORM
"Head Start reminds us that our country cannot afford to waste its young or
ignore their families. We must value every child and help every parent succeed.
Head Start creates the sense of community that all of us need i~J our lives. The
dedication of thousands of volunteers, staff, and parents helps create the special
relationship that defines the Head Start program. Head Start is indeed a
celebration of human diversity and creativity. "
President Clinton
May 18, 1994
Actions ·to Date
President Clinton has promised to improve and expand preschooling initiatives
for America's youngest citizens. The budget reconciliation act that President Clinton
signed in 1993 authorized $1 billion in new family preservation and support efforts,
and on May 18, 1994, the President signed legislation reforming and enlarging Head
Start, America's leading program preparing children for school. In two years, President
Clinton has increased investment in our children through Head Start by more than $750
million, and taken together, his efforts will:
-
..
•
Create tough new quality standards for Head Start.
•
Enable Head Start programs to improve staff training arid reduce child-toteacher ratios.
•
Allow Head Start Centers to expand their services to include more full-day and
full-year programs.
•
Create the new Early Head Start program for infants and toddlers .
•
Expand Head Start to enable over 130,000 more children to participate in 1995
than in 1992 -- with a proposed increase of 31 ,500 for 1996 -- while also
moving many students from part:-time to full-time enrollment.
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�Background
"I've often said that governments can't raise children, that people have to do that. .
But parents need help in a lot of places in this country today, just like they did in
1992."
President Clinton
May 18, 1994
Launched in 1965, Head Start has helped almost 14 million children to prepare for
the challenges ahead with education, health care, and parental education. Yet the world of
Head Start today is very difff~rent from thirty years ago -- with more children who have
lived with violence and substance abuse, and more families with linked· problems of
homelessness, poor education, and unemployment. The ranks of those needing help have
expanded to include more single parents, and increasingly, more working parents as well.
President Clinton promised to expand and improve Head Start to meet the needs of
pre-school children in the twenty-frrst .century. In the first months of the new
Administration, President Clinton and Secretary of Health and Human Services Donna
Shalala convened a bipartisan team of experts to form the Advisory Committee on Head
Start Quality and Expansion. Six months later, that Committee issued a Final Report -- a
blueprint for reforms to coin:e.
Echoing parents and scientific studies, the Report noted that Head Start improves the
cognitive ability and school readiness of the children who participate. Yet the Report also
found that quality in Head Start is uneven, and that the 30-year-old program has not
entirely adjusted to the changing needs of America's families. With more parents single and
more working full-time, full-day and infant and toddler programs are in rising demand. Yet
Head Start has remained primarily a half-day program for three- and four-year-olds. And
even in this traditional niche, demand increasingly outstrips supply: less than half of eligible
three- and four-year olds participate.
The Report made three major recommendations. First, make quality the centerpiece
of the ·new Head Start. Second, become more responsive. serving more children, but also
serving them differently in a way that better answers to parents' changing needs. And third,
forge new partnerships--to build on what works and build a more caring community for
children and parents.
These recommendations formed the basis of the Head Start reform signed into law
by President Clinton on May 18, 1994.
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•
�The Initiative
"This is not a program involving bureaucrats in Washington making decisions that
individuals and families and teachers have to live by. This is a program that is built
at the grassroots by families and teachers and communities. "
President Clinton
May 18, 1994
Last year's reform of Head Start, the biggest change·in years, makes improvements in
five major areas. ·
First, the legislation requires tough performance standards to defme the scope and
quality of Head Start. services. For the frrst time, the past performance of applicants will be
a key factor in determining future funding. Head Start is demanding results, and programs
that do not show them will be cut off.
Second, Head Start programs will now have the resources to raise levels of quality
dramatically. Programs can invest in staff training and raise staff salaries in order to
increase morale, attract qualified staff, and reduce turnover. They can increase the number
of staff on site, to provide more individualized attention to both children and parents. And
programs can invest in basic necessities, like quality equipment and transportation services,
in order to provide more opportunities for children to grow.
Third, more children will be served under the reform. Enrollment is up 27,000 in
1994, and between 1992 and 1995, the total number of children served is rising from
621,000 to 752,000. The President's 1996 Budget proposes to increase participation in the
Head Start program by an additional 31,500 children, for a total of 784,000 in 1996.
Fourth, programs gain the freedom to expand the scope of their services. Under the
new legislation, Head Start centers ~an provide full-day, full-year services to meet the needs
of parents who work full-time. More services aren't a requirement, but they are an option:
the decision rests with the community itself, not the federal bureaucracy.
Finally, the reform recognizes that ch1ldren from birth to age three also need positive
early chiid development ezc,periences. The new Early Head Start represents a turning point in
America's commitment to our youngest children. Drawing on the lessons of Head Start,
Early Head Start will dedicate new resources to high-quality services promoting healthy child
and family development. Families and communities will have the flexibility to develop
·programs that meet their own needs, but also satisfy tough national standards. Early Head
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�Start should join Head Start in lasting well into the next century--always changing to provide
high-quality, resp<:>nsive, and respectful services to America's youngest children and families.
·Case Study: Rachel DeBruler and her son Michael
Six years ago, Rachel DeBruler and her oldest son, Michael, began to chart a
bright new future by walking through the door of a Head Start center in Olympia,
Washington.
Michael quickly came to love Head Start. He told his mother that the best part
was passing around bowls, family style, at lunch time. Michael liked sharing with the
other children.
While her son benefitted from Head Start, Rachel DeBruler contributed to it.
She was continuously engaged in improving the Head Start center. She attended parent
meetings. She got involved with fundraising for her program. She even participated in
Head Start's state association.
Her commitment--and the commitment of the teachers and staff in Olympia-produced real results. Today Rachel DeBruler's three children are doing very well in
school. As she wrote in a letter of thanks, "I never knew that there was a program that
wo:uld ask parents to be so involved in their child's education. "
Case Study: The Results of Head Start Reforms
With the new resources from the Head Start reauthorization, here are a few
things that Head Start programs are doing:·
•
•
•
•
•
•
Reducing average class size .
Hiring mental health staff to work individually with children experiencing
behavioral difficulties.
Adding bus aides-- to make sure there are always two adults with every busload
of children.
Replacing outdated and potentially unsafe playground equipment and facilities .
Expanding part-time programs to run full-day in order to meet the needs of
parents who are working or in job-training.
Hiring additional family workers to reduce unacceptably high caseloads .
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�•
Pre-School-Addendum: Family Support and Preservation
Summary
President Clinton recognizes that government doesn't raise children-- parents do.
But he also knows that sometimes parents need a helping hand in their communities and has
promised to support them in their efforts to raise their children. As President, he signed the
Family Preservation and Family Support Act. This legislation authorizes almost $1 billiqn
over 5 years to help states to develop a continuum of services to assist families with children
at risk, including:
•
Help for parents of all backgrounds to strengthen their parenting skills, before
crisis hits;
•
Referrals and improved access to other important services; and
•
In emergencies, crisis intervention in order to prevent family breakup
whenever possible.
Background
While the vast majority of parents are committed to doing right by their children,
many parents can use help with child-rearing. These needs exist everywhere, but they're
particularly great for parents who have few resources and little education, and face
neighborhoods tom by crime, drugs, and gangs. Smart investments that teach parents to
teach their children can yield. tremendous dividends in the lives of parents and children
alike.
While the movement to maintain intact families dates back at least to the turn of the
century in the United States, the goal of helping parents moved on to the national agenda
once more during the 1970s and 1980s, as incomes stagnated and millions of parents
struggled to balance the demands of work and family. Starting in the 1970s, states ·and
communities developed a range of promising initiatives to use home visits, classes,
referrals, and other services to help parents with their own efforts to raise their children.
President Clinton has promised to support programs that support families. President
Clinton and Mrs. Clinton know the success of these programs frrst-hand; in Arkansas, they
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�helped to bring from Israel the Home Instructional Program for Pre-school Youngsters
(HIPPY), now a model for family support nationwide.
Recognizing. the variety of successful efforts at the grassroots, President Clinton
endorsed the emerging consensus that services for families with young children ought to
cover a wide continuum. At one end, programs would help parents of all backgrounds to
enhance their own parenting skills in areas such as education, health and nutrition, and
child safety. These· "family support" services would prevent crises by helping equip parents
in advance. At the other end of the continuum, for families under deep stress, family ·
preservation efforts would offer emergency services designed to prevent imminent breakups
when possible. By keeping children in the home and out of foster care whenever possible,
these would save families from wrenching experiences and could also save the government
money.
The Initiative
In his first months in office, President Clinton worked together with Congress to
enact the Family Preservation and Support Act. Included in the Omnibus Budget
Reconciliation Act signed in August 1993, the legislation authorizes close to $1 billion over 5
years for states and communities to develop a continuum of care for families. The program
is designed not only to offer direct support to successful programs, but also to help states to
redesign their family services--eliminating dupliCation, connecting efforts, and offering
parents easier access to an array of services. The law brings the principles of reinventing
government to bear on programs directly affecting our families and children.
Already, all 50 states are developing plans to redesign their family preservation and
support services, and in future years, the funds will support a range of models. Models like
mPPY and Parents as Teachers center on home visits in which parents receive individualized
help in areas like child development and education. In these programs, parents also attend
classes where they can meet other p.arents addressing similar issues, and their children
receive screening to track their developmental success. Other model programs, called family
resource centers, focus on helping patents gain access to the help they need, including job
search and job training, health care, and substance abuse treatment. And still other efforts,
such as Homebuilders, offer intensive short-term services and access to 24-hour assistance
for families in crisis.
These and other models supported by the new legislation promise to help a new
generation of parents achieve their own highest hope--raising their children successfully.
4-8
�..
48. GOALS 2000
"Goals 2000 is a new way of doing business in America. It represents the
direction our government must.take with many problems in the 21st century."
President Clinton
May 16, 1994
Actions to Date
President Clinton promised to transform our public schools by offering "topdown support for bottom-up reform." In 1994, President Clinton signed the two acts
that constitute the most important school reform legislation in a generation: on March
31, the Goals 2000: Educate America Act, including the Safe Schools Act; and on
October 20, the Improving America's Schools Act, reauthorizing the Elementary and
Secondary Education Act. These Acts are already empowering teachers, principalS, and
schools to change the way we teach children with: ·
•
Challenging academic standards for what students should know and how well
they should know it.
•
Violence prevention initiatives inside schools to make sure that the academic
environment is conducive to learning, not fighting.
•
Cutting-edge technology to create new opportunities and new excitement in
learning.
•
Strong parental involvement so that parents help their children learn and schools
reinforce parents' efforts.
•
Less red tape, so communities can offer challenging and tailored opportunities to
children and government can help-not hinder--their efforts.
Already, 47 states have applied for and received grants to develop plans to
reform their schools -- and better educate millions of children.
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�Background
"Our states and communities have always taken the lead in public education, and
they'// continue to do so. But the national government can do more to help.
President Clinton
February 22, 1994
Americans take pride in a public school system that strives to give all our children
the education they need to make the most of themselves. Community control of schools
and parental involvement in education have made America's schools uniquely successful in
the world. But since the 1980s, a series of studies confirmed what many parents already
knew: America's schools have not" been doing their jobs.
The problems are diverse. Many schools have stopped demanding high achievement
from students: in "the tyranny of low expectations," students are asked for little and deliver
less. Some teachers are inadequately prepared for the demands of the classroom and
inadequately assisted once inside it. The curriculum often fails to engage students or their
teachers. Technology inside the schools has not kept pace with changes outside them.
Violence in communities has entered the hallways and engulfed many schools. And
complicated bureaucracies create a government octopus that tends to slow change down.
Red tape stifles the very people--the parents--whose involvement is most essential to
children's educational success.
While researchers studying schools have found the problems, educators have gone to
work solving them. Governor Clinton made education the centerpiece of his program to
prepare a rural state for a complex economy. He pursued comprehensive school reform-including a tough new curriculum, incentives and requirements for parental involvement,
statewide testing of students and teachers, and mandatory reporting on school performance.
The results were impressive: in 1992, at a time when educational performance in many
states was declining, Arkansas boasted rising student scores on standardized tests and the
highest high school graduation rate in the region. Other states pursuing similar reforms
scored equally striking victories.
The movement for school reform picked up national support in 1988. As ·head of
the National Governors' Association, Governor Clinton joined President George Bush to
convene a national Education Summit. Participants together hammered· out six goals for ·
American education. These represent a lighthouse to guide the efforts of communities and
states to improve education. (See box for the goals, now totalling eight, as formalized in
law by the Goals 2000 Act passed last year.)
jl
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�National Education Goals
•
By the year 2000:
1)
School Readiness: All children in America will start school ready to learn.
2)
School Completion: The high school graduation rate will increase to at least 90
percent.
3)
Student Achievement and Citizenship: American students in America will leave
grades four, eight, and twelve having demonstrated competency in challenging
subject matter:--including English, mathematics, science foreign languages, civics
and government, economics, arts, history, and geography--prepared for
responsible citizenship, further learning, and productive employment.
4)
Teacher Education and Professional Development: The nation's teaching force
will have access to programs for the continued improvement of their professional
skills and the opportunity to acquire the knowledge and skills needed to prepare
students for the next century.
5)
Mathematics and Science: U.S. students will be first in the world in science and
mathematics achievement.
6)
Adult Literacy and Lifelong Learning: Every adult American will be literate and
will possess the knowledge and skills necessary to compete in a global economy
and exercise the rights and responsibilities of citizenship.
7)
Safe. Disciplined. and Alcohol- and Drug-Free Schools: Every school in America
will be free of drugs, violence, and the unauthorized pr~sence of frrearms and
alcohol and will offer a disciplined environment conducive to learning.
8)
Parental Participation: Every school will promote partnerships that will increase
parental involvement and participation in promoting the social, emotioDal, and
academic growth of children.
4-11
�The Initiative
"[We set world-class standards of excellence} because we believe every child can
and must learn at world-class standards of excellence. And those of us who are
older believe we have a practical and moral obligation to see that you have a
chance to do it. "
President Clinton
March 31, 1994
President Clinton has initiated national reforms that bolster community efforts,
offering "top-down support for bottom...:up reform." The reforms are embodied in two key
pieces of legislation, both passed with broad bipartisan support in 1994: the Goals 2000:
Educate America Act, and the Improving America's Schools Act, reauthorizing the
Elementary and Secondary Education Act (ESEA).
The centerpiece of the program is Goals 2000. At the national level, the Act revises
and codifies the National Education Goals, making them the official benchmarks for
educational excellence in America. The legislation then challenges states and local school
districts to set their own high standards -- and to design plans to help all children reach
them. Goals 2000 will offers financial support for the implementation of those plans -with 90 percent of the funds going to the local level.
At the state and local level, the Act offers assistance to states and school districts to
establish broad-based panels to develop reform plans for their schools. If the plans meet
broad national guidelines, Goals 2000 will then offer financial support for their
implementation.
·
The state and local provisions of Goals 2000 are voluntary and designed entirely to
achieve each state's and community's own goals and challenging standards. States need not
participate -- although 4 7 states already are. The legislation specifically prohibits federal
mandates. The Goals 2000 application is a simple, four-page document with no
accompanying regulations. And Goals 2000 gives the Secretary of Education authority to
waive some federal requirements and delegate waiver authority for promising reform plans.
The key features of the reform process fall into five areas:
High Standards
America's students will need to meet new and challenging academic standards in
order to meet the high demands of the new economy. And high standards do more than set
benchmarks; they galva.riize young people. The more you ask of our nation's students, the
more you get back from them.
4-12
�•
•
Goals 2000 encourages every state to develop challenging content standards (what
students should know) and performance standards (how well students should know it) .
Through the reauthorization of the Elementary and Secondary Education Act, the
Administration has taken another stand for standards. For many years, economicallydisadvantaged students, those helped by "Chapter 1" (now called "Title I"), were not
expected to reach the same levels of achievement as other students. Instead, these students
were often taken out of their regular classes, placed in remedial classes, and offered a
watered-down curriculum. The new Title I raises expectations again: schools will once
more expect students in the program to learn to meet challenging academic standards like
all other students.
Under Goals 2000, standards should be much more than abstract ideals cut off from
the day-to-day activities of the schooL Rather, standards can become guidelines around
which states and localities align virtually everything in their education system, including
curriculum and professional development. Replacing the tangle of goals inside schools
today, challenging standards can act as a fixed star to orient every effort.
Parental Involvement
Parents are the most important teachers of their children. Without dedicated help
from parents, good schools will not be enough. Study after study shows that parents who
play an active role in their children's le8ming boost their children's grades--and their
lifelong commitment to education.
Parents need to be involved in both the education of their children and the life of
their schools. They can talk to children about school, especially homework. They can read
with children and keep books around the house. In addition, parents can take personal
responsibility for their children's attendance at school--while limiting the time kids spend in
front of the television. And finally, parents can get to know their children's teachers and
their schools' administrators, and help to shape the way schools teach children.
....
The Administration is working to help parents get involved. With the strong support
of the President and the national PTA, the new National Education Goals establish
increased parental participation as one of two new goals. The Improving America's
Schools Act requires schools participating in Title I to develop written compacts with
parents that spell out the goals, expectations, and shared responsibilities of schools and
parents. The Administration is supporting new initiatives designed to help parents act as
teachers for their pre-schoolers (see Family Support and Preservation section) .. Education
Secretary Riley is leading a national partnership--with an aggressive public campaign--to
encourage parents to become more active. He and· his staff have met with more than 125
different parent, religious, education, community-based and business groups to discuss ways
4-13
�to promote parental iiwolvement in children's education.
Important as these efforts are, their limits are clear. No law nor initiative can do the
work of a family. In the end, the responsibility for teaching children to learn rests with
every parent.
Teacher Training
If we are going to demand high achievement from students, we have to expect a lot
from teachers, too. Improving student performance means improving teacher training, too.
With Goals 2000, teachers play a crucial part in developing the new standards that students
will pursue. Because teachers are "in on the ground floor," reforms will reflect the needs
that students demonstrate inside the classroom. And under the new legislation, teachers·
will also get the improved training they need to help students achieve high standards.
·Technology Development
Computers and other advanced technology offer exciting ways for students to learn
traditional subjects. They also provide hands-on training in the work skills that an
Information Age demands. Goals 2000 funds can be used to integrate technology into
school improvement· efforts. And the reauthorized ESEA will help more schools get on the
emerging Information Superhighway.
Safe Schools
If schools aren't safe, children aren't going to reach high standards. The Goals 2000:
Educate America Act and the Improving America's Schools Act include provisions to
prevent violence in schools. The programs are flexible, giving schools the power to meet
their unique safety needs. One school might focus on teaching students how to resolve
conflicts without violence. Another might encourage parents and community leaders to
come together and stop school violence. A third school might focus on safe after-school
programs for all students. All three schools could add other efforts to these, including
acquiring metal detectors, hiring security personnel, and developing safe zones around
school.
...
4-14
�Case Study of High Standards: Oceanside High School, Los
Angeles
The Improving America's Schools Act says that all students should aspire to
challenging standards--whatever their backgrounds. Some say that's too much to ask.
The experience at Oceanside High School suggests otherwise.
It wasn't long ago that a proposal· at Oceanside to place disadvantaged
. underachievers in a college-prep course sparked fierce opposition among some teachers
and administrators. Says teacher Lennie Noordhoorn, "They thought it was a
disservice to the kids--that they couldn't handle" advanced classes. But the AVID
program ("Advancement Via Individual Determination") has students doing better in
their classes--and skeptics becoming believers.
AVID teaches underachievers how to take notes, improve their writing,
participate in class discussions, and develop other skills needed to reach college and
succeed there. "What they're really doing," says University of California-San Diego
· Professor of Education· Hugh Mehan, "is teaching kids about this culture of the
schools.... how to study, how to use libraries... the kind of things that middle-income
kids often receive implicitly at home." Today, more than 90 percent of AVID
graduates go on to postsecondary education--50 percent of those at four-year colleges.
4-15
�Case Study of Technology: Christopher Columbus Middle
School, Union City, NJ
As part of a comprehensive refonn proposal, new computers in the classroom can
transform education--for all students.
In the late 1980s, the Union City school district was in crisis, and on the verge of state
takeover. This densely-populated, poor, urban, predominantly Latino district was having
difficulty meeting New Jersey State education goals. At Christopher Columbus Middle School,
student attendance and scores on standardized tests were well-below state averages, while
dropout and transfer rates were far above the state norm.
All that began to change in the 1989-90 school year. The school developed a
restructuring plan, teachers created an innovative new curriculum, staff were retrained, and
extended periods for core subjects were instituted. With added money from New Jersey's
Quality Education Act, the schools installed 775 computers. ·That was when Bell Atlantic
offered to institute an intensive "technology trial" at the school. In addition to each classroom
having several computers, Bell placed computers in a new media resource room, the science
laboratory, and the computer laboratory. The company installed high-level computer
equipment with graphics and voice capabilities in the schools and homes of all seventh-grade
students and their teachers. All the computers were tied into local- and wide-area networks.
Computers are now an integral part of the curriculum, helping students learn to
research and work together better. For example, when students study the American
Revolution, they fonn teams that can conduct research in new ways: by going to the media
center and using the Grolier multimedia encyclopedia; by using the computer to research
George Washington through a CD-ROM information disc; and by using e-mail to access
critical essays now on the network. Teams that don't finish their work in school can continue
working at home, communicating by computer.
Teachers receive support for using the computers from Bell Atlantic and a local
Education Development Center. They, in tum, have helped run workshops that introduce
parents to the new technology.
Today, Union City students in grades K-8 are performing above-average work in math
and other areas. The transfer rate is down dramatically at Christopher Columbus. Students are
using the media resource room during lunch time and after school. They are actually eager to
hand in their homework, neatly typed on the computer. And they're lining up before the
formal school day begins, so they can start learning early.
4-16
"'
,
�w
"11(
Case Study of Safe Schools: James P. Timilty Middle School,
Roxbury, MA
Because they are led by schools, not government, Safe Schools efforts can
transform even the most dangerous schools into safe havens.
Timilty Middle School was once considered one of the weakest schools in
Boston. Violence was rampant, and the quality of education suffered. Then a group of
Timilty students, guided by their teachers, sponsored a forum to discuss ways to stop
the violence. Student councils from eight schools joined and agreed that conflict
resolution should become a part of the curriculum. All students and staff would make
a written commitment to bring the violence under control. And with hard work, the
levels of violence in the school dropped dramatically.
With the guns and gangs under control, Timilty focused on improving academic
achievement. The school implemented "Project Promise," which adds 90 minutes of
reading and math instruction four days a week for all students--more than twice the
time many students spend in these areas. The result of these and other reforms have
been the highest reading and math scores in Boston Middle Schools for the last five
years.
Other innovations are now under way. The school has four clusters of 80 to
100 students, each led by a team of nine teachers who together design and offer
interdisciplinary instruction. Parents serve on Timilty's management council. A staff
member works half-time on parent outreach. Doctors, nurses, and engineers from
M~sachusetts General Hospital help students with science projects and career
exploration. Three new summer programs provide continued academic instruction and
community Service to the ·elderly in the area. And an adult literacy program helps
Spanish-only parents learn English..
Once a hotbed of violence, Timilty is now an engine of reform inside the
Boston schools.
·
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�4C. SCHOOL-TO-WORK OPPORTUNITIES
"School-to-work is central to our efforts to guarantee lifetime learning for every
citizen. In a rapidly changing world economy, what you earn increasingly depends on
what you learn. "
· President Clinton
April 21, 1994
Actions to Date
In 1994, President Clinton's School-to-Work Opportunities Act passed Congress
with bipartisan support, fulfilling his pledge to create a school-to-work system. With
$250 million appropriated in 1995, the new initiative will build on efforts begun in 1994
with $100 million. School-to-Work is:
•
Allowing states and communities to design diverse programs.
•
Enabling all participants to develop high-level academic .and technical skills,
obtain a high school diploma and an occupational skills certificate, and move
toward further training and first jobs that lead to high-skill, high-wage careers.
•
Expanding the number of states receiving implementation funding from 8 in
1994 to 28 in 1995 to overhaul their systems to create better and broader schoolto-work opportunities. ·
•
Offering support for every state to create school-to-work opportunities by 1997.
•
Will end in 2001 --because President Clinton wanted the is program to provide a
catalyst for .local initiative and not a new federal bureaucracy.
j
4-18
�Background
Too many American high school students have few options today. Not every young
person wants to go straight to college after high school. The education offered· to the vast
majority of young Americans (both "general" and "vocational") provides neither access to
jobs nor solid grounding in academic fundamentals. The wage gap between workers with
and without college degrees has literally doubled. For young people without four-year
degrees, this means frustration and anxiety· as good jobs become more scarce. For the
national economy, it means a tragic waste of talent and potential.
In America, many skilled trades have long been passed on from master to youth
through a structured system of apprentices. A range of models for combining meaningful
education and career paths for young people flourishes throughout western Europe and other
industrialized nations. The President's school-to-work legislation not only launches new
innovations in work and learning, but also reaffnms the tradition of "work-based learning."
The Initiative
The culmination. of a national dialogue involving leaders from business, labor, and
education as well as students, parents, .and Administration officials, the School-to-Work
Opportunities Act will renew for millions of Americans our nation's promise that anyone
who works hard and plays by the rules can enjoy economic security.
During the last two years of high school, and typically for at least one year beyond,
young people participating in school-to-work programs receive classroom instruction and
structured work experience that relates to what they learn in school. They may not know at
any one moment whether they are forinally iii "schooling," "training," or "higher education"
--but it doesn't matter. What matters is that they are following well-marked pathways
between school and careers and are developing the confidence, competence and connections
required to succeed in the global economy.
The school-to-work legislation is remarkable for what it contains: the framework for
a national system of community work and learning partnerships. But the legislation is
nearly as remarkable for what it leaves out. Rather than attempting to force change with
flood of money from Washington, or dictating a single design for all schools to follow, the
Act encourages states and communities to take the lead. The federal role in School-toWork is crucial, but limited. A joint enterprise by the Labor and Education Departments
a
•
4-19
�manages a pool of venture capital that empowers state and local innovators.
The Act builds on a common-sense, three-part consensus: first, young Americans
need paths to prosperity -that don't require a conventional four;..year degree, but do meet the
need for practical post-secondary training to prepare for new middle-class careers; second,
· almost all students, college-bound or not, learn better when their studies are linked to
relevant contexts like the working world; third, no single path suits every student -- there
must be a range of school-to-work opportunities, with plenty of room for local diversity and
experimentation. There are many vatid models, including youth apprenticeships, innovative
vocational education programs, career academies, and cooperative education.
The legislation ensures, however, that all school-to-work programs share four key
elements. Every participant receives high-level academic and technical skills; a high school
diploma that keeps the door open to college; an occupational skills certificate reflecting
mastery of an industry skill; and preparation for further education and first jobs that lead to
high-skill, high-wage careers.
•
•
•
•
A Work-based learning experience;
An integrated cu"iculum of academic and occupational skills;
A high school diploma that keeps the door open to college;
An occupational skills certificate offering access to a first job with a real
future.
Small planning grants have already gone to every state. Reform is now moving
forward in "waves" as individual states complete their own blueprints for change. Eight
states won implementation grants in the first year, 1994, and in the second year, Congress
approved funding for as many as 20 more states to implement reform plans. By 1997,
every state will have a chance to implement school-to-work reforms. Then, having
achieved its goal of sparking local change and creating new programs, the School-to-Work
Opportunities Act will be phased out by 2001.
In its early stages, the school-:to-work movement has yielded impressive results. At
Roosevelt High School in Oregon, students choose from among six "career majors" which
serve as themes for applying academic learning and open opportunities for work-based
learning. The freshman dropout rate has plummeted by 62 percent. At the Rindge School
of Technical Arts in Cambridge, Massachusetts, 85 percent of the youth apprentices are
entering college -- compare..d with the district's average college placement rate of 67%. In
Boston, all 38 seniors from Project ProTech who graduated at the end of the 1992-93
school year enrolled in postsecondary programs.
But the power and promise of school-to-work programs is best expressed by the
4-20
.
�"
students themselves, who testify to its impact in changing their lives. Said one graduate of
the Oakland Health and Bioscience Academy, now a professional RN: "The best thing
about this program is learning through high school the hands-on experience that I needed in
terms of focusing on what I really wanted to do in the nursing field. It gave me exposure
and clinical experience and networking with the professionals and I was able to project
myself in five years.-- that this was how I wanted to be and who I wanted to associate
with." Or as another school-to-work participant has said, "This program taught me
responsibility -- you can do anything you put your mind to."
F===================================================~
Case Study: Siemens Stromberg-Carlson Electronics
Technicians Apprenticeship Program
Siemens Stromberg-Carlson, an international company based in Germany, has
years of experience training young people for high~skill, high-wage jobs. Their
Electronics Technicians project in Florida translates some of the best features of the
· famed German youth apprenticeship model -- such as master teachers at the company,
high academic standards, and employer involvement in curriculum -- to create· a schoolto-work opportunity that works for young Americans and their communities. The
program is a partnership between local high schools and community colleges, government
and industry.
The results so far have not only equaled, but actually exceeded those of the
German model. For two years in a row, Siemens students in the U.S. llave scored the
highest of all Siemens apprentices worldwide. In fact, despite having five months less
training, American Siemens apprentices outscored their German counterparts on the same
exam.
4-21
�Case Study: Chris Brady
When Chris Brady decided to drop out of school, it seemed like a logical step.
The South Boston native was so turned off by school he rarely made it to any classes.
But he saw that his friends who had dropped out were sweeping floors and stocking
grocery shelves -- and not making enough money to pay the rent. He wanted something ,
better.
So uistead of leaving school for good, Chris found his way into the Project
ProTech school-to-work program in fmancial services. For the frrst four months, he
learned the basics of banking and what. work was all about. Then he started to work
part-time in the "large currency" department at Fleet Financial Group, one of the nation's
largest banks. The job required him to pay close attention to detail, communicate with
other branch offices, use a computer to enter data and retrieve information. In the
afternoon, he would attend classes that were set up to relate to his job -- learning math
and English with lessons on word processing, data bases, and spreadsheets.
In the process, Chris started to see the connection between work and school and,
as he says, once he "got a taste of the business world, something just clicked" for him.
He is now in college, where he is studying business administration.
.
4-22
..
�40. NATIONAL SERVICE
y
"Beyond the concrete achievements of AmeriCorps, beyond the expanded
educational opportunities those achievements will earn, national service will
help us to strengthen the cords that bind us together as a people--to remember
in the quiet of every night, that what each of us can become is to some extent
determined by whether all of us can become what God meant us to be. "
President Clinton
September 21, 1993
Actions to Date
President Clinton promised to enable Americans to earn money for education by
engaging in service to America. On ~e lOOth day of his administration, President
Clinton sent to Congress the National and Community Service Trust Act. With
bipartisan majorities, Congress passed that Act, and on September 21, 1993, President
Clinton signed the legislation and created AmeriCorps. With a $300 million first-year
investment, AmeriCorps fulfllls his promise by:
• Giving young people the chance to spend a year· or more making our people·
safer, smarter, and healthier--while earning an award of nearly $5,000 per year
to pay for college or job training.
• Engaging 20,000 Americans as AmeriCorps Members in its frrst year--more
than the Peace Corps at its height.
• Combining existing Federal agencies and relying on communities to design
their own initiatives.
·
..
4-23
�Background
"The lesson of our whole history is that honoring service and rewarding responsibility
is the best investment America can make. "
President Clinton
March 1, 1993
"/believe .... that national service will remain throughout the· life of America not a
series of promises, but a series of challenges, across all the generations and all walks
of life, to help us to rebuild our troubled but wonderful land. "
President Clinton
September 21, 1993
America has a long tradition of civic service. The nation was founded by citizens
who came together in order to build a foundation for freedom. "A debt of service," said
Thomas Jefferson, "is owed by every [citizen] to [our] country." In the 19th century, Alexis
de Tocqueville found that in America as nowhere else, people joined in religious,
educational, and civic organizations in order to solve problems.
Programs of service organized at the national level have built on this rich tradition.
During the Great Depression, Franklin D. Roosevelt created the first major national service
program, the Civilian Conservation Corps (CCC). Four million young people joined-restoring the nation's parks, revitalizing our economy, and supporting their families and
themselves. A generation later, President Kennedy created the Peace Corps as the concrete
embodiment of his most famous words: "Ask not what your country can do for you, ask
what you can do for your country." Responding to that call, thousands of Peace Corps
Volunteers have left the comforts of home and traveled to the poorest comers of the globe,
building schools where none existed, helping farmers feed the hungry, and creating hospitals
to care for the sick.
In developing a program of national service for a new generation, President Clinton
has drawn on two vital principles from these programs. First, service is important because
there is a lot of work to do right now in America. If national service is to meet any other
objective, it frrst has to meet real needs: ensuring immunizations for infants, teaching
children to read, making neighborhoods safe for families, and keeping the elderly safe in
their homes.
Second, a new program of national service should
4-24
~trengthen
the spirit of citizenship.
�Too often today, young people speak about rights, but not about responsibilities. Yet an
ethic of entitlement without obligation doesn't work--and it certainly isn't what has always
made America great. A program of national service shows those who serve and those who
don't that Americans can--and should--give back to their communities and country.
And in return for their contribution to our country, those who make a long-term
commitment to service can get something in return for themselves. This idea is reciprocity:
more opportunity in return for more responsibility. And for young people near the beginning
.of their careers, there is no greater source of opportunity than education. The model here is
. the GI Bill, passed during World War II to enable returning veterans to get a college
education. Through the GI Bill, millions of Americans contributed to their own future and to
America's productivity at the same time. National service here at home offers a new way
for young people who help others to help themselves.
A final important principle is that national service ought to strengthen the voluntary
associations that have always made America strong. In recent years, social scientists and
community leaders alike have worried that Americans are working. together less than we once
did. National service can provide a steady source of new help for America's civic
organizations, helping them to solve community problems from the grassroots up. And those
participating can help to draw other communi,ty members back into service. The program
becomes a catalyst for communities to come together, draw new volunteers and support from .
the community, and solve problems.
·The Initiative
''National service recognizes a simple but powerful truth, that we make progress not
by governmental action alone, but we do best when the people and their government
work at the grassroots in genuine partnership. "
President Clinton
March 1, 1993
President Clinton's pledge to create a "domestic· Peace Corps" excited as much
interest as any proposal. Young people were especially energized; in the first 100 days of
the Clinton Administration, the White House was flooded with thousands of postcards and
phone calls about the shape of the new program. On the 1OOth day, President Clinton
detailed his program to fulfill that promise, and a few months later, Congress passed the
National and Community Service Trust Act creating the new program, dubbed
"AmeriCorps." Today, in its first year, more people are participating in AmeriCorps than
4-25
�joined the Peace Corps at its height.
Designed with bipartisan support in the Congress and from the Governors,
AmeriCorps is simple enough. Anyone over age 17 ·may participate, although in practice
most AmeriCorps Members are young people. Members agree to make a significant
commitinent to service--either a year or two full-time, or a longer period part-time.
Through their service, they meet important needs in four areas: education, public safety, the
environment, and human needs (including health and housing). Service ranges from
improving our schools, housing the homeless, and making our streets safe and our
environment clean. In return for their service, they earn a small stipend and, at the end of
their service, an education award worth nearly $5,000 per term--nearly the average cost of a
year at a four-year, public university. The education award can be used to repay existing
loans or to pay for current or future. expenses at any accredited four-year, two-year, or
vocational institution.
As the .first program of its kind in a generation, AmeriCorps had to be .on the
cutting-edge of reinventing government. And it is. The Corporation for National Service-a combination of existing agencies, not a new one--oversees the effort. The idea, as
Corporation Chief Executive Officer Eli Segal says, is to "translate national service from
the poetry to the prose." The Corporation sets broad standards, tracks cost-effectiveness,
and monitors progress toward basic goals. But the real power is in the hands of states and
communities, which design programs to meet their own special needs.
Today, in more than 350 communities around the country, nearly 20,000 Americans
are getting things done right now. They are from every state in the union and every
background under the sun. What they share is a commitinent to helping themselves and
improving our country--not with the heavy hand of government, but with the helpirig hand
of service. In Texas, AmeriCorps Members have helped immunize more than 200,000
infants, saving taxpayers millions of dollars--and saving untold lives. From the floods in
California to the fires in the Pacific Northwest, AmeriCorps Members have helped limit the
toll of natural disaster and helped the displaced get back on their feet. And in Kentucky
today, AmeriCorps Members are raising reading levels from two years behind to one year
ahead of standards.
Beyond these direct results, AmeriCorps helps transform communities. AmeriCorps
Members devel~p the skills and the spirit to make a lifetime of active citizenship. And
their communities come together again as well. When AmeriCorps Members help a church
set up regular neighborhood cleanups or tutoring programs, neighbors get to know each
other again. And they learn that they don't need to wait for anyone else to help them--that
they can help themselves. AmeriCorps is helping bring America together and move
America ahead--neighborhood by. neighborhood, and block by block.
4-26
..
�•
Case Study: AmeriCorps Cadet Program
...
A unique partnership among the New York City. Police Department (NYPD),
the John Jay College of Criminal Justice, and the Corporation for National Service,
AmeriCorps Cadets enables young people to fight crime in their communities and
become police officers themselves. The Cadet term is similar to the Reserve Officer
Training Corps (and the Police Corps, discussed elsewhere). During the school-year,
Cadets attend classes full-time, including those of the police academy, and serve with
the NYPD part-time. During the summer, they serve full-time in their communities.
On completing both their college education and their AmeriCorps experience, the
Cadets become sworn police officers.
The AmeriCorps Cadets program builds on the existing Cadet program of the
· NYPD, but it adds an especially· strong commitment to community-based problemsolving, using insights from the community policing movement. Teams of six to eight
cadets are assigned to 15 of the highest crime precincts in New York City. There, they
work with police officers and community members to address specific problems.
Projects include reducing "quality-of-life crimes" in Lower Manhattan by cutting ·
loitering and drug and alcohol violations; establishing a "Safe Corridor" for commuting
schoolchildren in mid-Manhattan; taking back a drug-infested block in East Harlem by
recruiting blockwatchers, enlisting landlords, and coordinating patrols; patrolling parks
across Brooklyn to report and reduce crimes; and more.
·
During the 1994 "Summer Of Safety" (SOS), a pilot for the AmeriCorps
program, the first 100 AmeriCorps Cadets made striking advances ·against crime in
New York City. The positive accomplishments are many, but the most notable is
something that didn't happen: for the first summer in memory, there were no sexual
assaults reported at New York City's public swimming pools, thanks largely to
AmeriCorps Cadet patrols there. All 100 SOS Cadets, as diverse as New York City
itself, have re-enrolled this year.
4-27
�Case Study: David Trevino
When David Trevino sees teachers send children to the comer for bad behavior,
he tells himself, "That was me." After his parents split up in his early childhood, David
struggled. Teachers said David was learning disabled and placed him in special
education classes. In an example of the "tyranny of low expectations," David recalls
teachers telling him he "wasn't going to make it." For a long time, David believed-them and scored poorly.
One key figure in David Trevino's life was a fourth grade teacher who took a
special interest in him and taught him, for the first time, to enjoy learning and believe in
himself. David graduated from high school and went on to attend Austin Community
College, where he is currently a sophomore. Still inspired by his former teacher's
example, David has become a teacher himself, as part of the AmeriCorps for Math and
Literacy program in Austin, Texas. There, David teaches basic skills like reading,
writing, and mathematics to disadvantaged children--the kinds of children he once was.
David is passionate about giving back the caring and inspiration given him in his
childhood. He says his goal this year is to change as many lives as he can. One life he
· is sure to change is his own. David will use his education award next year when he
transfers to the University of Texas to begin pursuing a degree in environmental studies
with a concentration in water quality.
4-28
�. 4E. INDIVIDUAL EDUCATION
ACCOUNTS/COLLEGE LOANS
"We already give Americans looking forward to their retirement the chance to save
in what we call an Individual Retirement Account. Now, we offer people at the
beginning of their careers the chance to pay for college in what we call Individual
Education Accounts."
President Clinton
October 21, 1994
Actions to Date
College has always been a gateway to the American Dream, but in the 1980s,
college costs soared while students dropped out because they couldn't repay their
loans. President Clinton has promised to reform the system--so all Americans could
borrow the money for· college and repay it as a percentage of their income over time.
As part of the budget reconciliation passed by Congress and signed by the President in
1993, President Clinton fulfilled his commitment and enacted the biggest change in
student loans ever. The reform is already in place at 104 schools, and will eventually
be available to every student in college, graduate school, or job training nationwide-over 20 million Americans. Under President Clinton's plan, over the next five years:
• Any student can get loans for college or job training, and repay them in one of
four ways, including "pay-as-you-cann repayment as a small percentage of
income over time.
• Defaults will decline--they are already down from $2 billion to $1 billion per
year--because borrowers have better service and more flexibility to repay their
loans at a manageable pace.
• Borrowers can choose among different repayment schedules and change
schedules over the life of their loan--reducing the burden of debt on the choice
of a career.
.
• Red tape and loaa-processing time are cut back dramatically as students can
borrow directly through their schools, not from multiple "middlemen."
• Taxpayers are saving more..than $6 billion--with another $5 billion in savings
planned in the 1996 budget.
4-29
�"'
Background
"'
"I got interested in this because I got tired of hearing young people in my own state
tell me they were going to drop out of college because they couldn't afford to take out
another loan; or tell me that they wouldn't go until they had some money because they
knew they'd never be. able to repay the 'loan. And I think we've changed all that now. "
President Clinton
November 1, 1994
Higher education has enabled millions of Americans to step into the middle class.
And now more than ever, getting a college education is a key to getting ahead in the world
economy. Today's new technologies and global competition make high demands on
workers' skills, driving an economic wedge between those who have more education and
those who don't. In 1994, the average unemployment rate for Americans without a high
school diploma was 12.6 percent; in 1992, the average income, less than $22,000. For
Americans with a four-year college degree, the unemployment rate dropped to 2.9 percent,
while the average income shot up to more than $57,000.
Because nothing is more important to America's economic future than college
opportunity, nothing could be more troubling than key trends in higher education during the
1980s. At a time when middle-class incomes were stagnating, college costs were rising far
faster than inflation--even more rapidly than health care costs. The college dropout rate
climbed to more than twice the high school dropout rate, with many of the casualties
leaving school because they just couldn't afford it any longer. As always, families
struggled and sacrificed to pay for the cost of a single child's higher education. But for
many, the cost was just too great.
Throughout this period, the student loan system made matters worse. Thousands of
banks, secondary markets, and guaranty agencies formed a maze that made borrowing as
complicated as any college exam. These "middlemen" imposed enormous burdens and
inefficiencies--with billions of dollars in costs passed along to taxpayers. Rigid repayment
schedules and high monthly payments often forced borrowers just out of school to change
their career decisions--forsaking rewarding work in public service for less interesting jobs
that might pay more. Those decisions didn't serve America's young people, and the defaults
didn't help America's economy, either.
President Clinton promised to reform the student loan system so that all Americans
would have the opportunity to borrow for college and pay off their loans on a manageable
4-30
...
-"
�•
timetable--as a small percentage of their income over time. Rather than make repayments
according to a fixed schedule linked only to the size of their loan, .Young people fresh from
college could pay less at first, when they were likely at their lowest levels of income, and
more in subsequent years, when they might be earning more. This idea was not new. As
early as 1949, Nobel laureate Milton Friedman advocated such "income-contingent" or "payas-you-can" repayment of student loans.
The second component of Clinton's program called for the Federal government to
lend money ditectly to students, bypassing '!middlemen" and passing along savings to both
students and taxpayers. On a limited scale, the Federal government began "direct lending"
in 1959 through the Perkins Lo~ Program. And beginning in the 1980s, Senators
Durenberger, Bradley, and Simon, along with Congressman Petri, proposed a much broader
direct-lending program along with income-contingent repayment. In 1992, Congress
established a small demonstration to test the idea; it was superseded by President Clinton's
initiative, introduced in 1993 and passed as part of the budget reconciliation act of that year.
The Initiative
Under the new program, students set up Individual Education Accounts to pay for
education. These enable borrowers to pay off their loans in one of four ways--a:nd to switch
plans as their fmancial situations change. With the new options, borrowers have greater
freedom to take risks and pursue personal interests that eventually benefit us all. They can
start their own businesses. They can accept lower-paying ·public service jobs--as teachers,
nurses, or police officers. Or they can take time off to care for a child or sick relative. The
new options promise to bring defaults down while dramatically expanding. opportunities for
young people to pursue their dreams.
With Individual Education Accounts, standard, fixed payments over ten years are
still available. But in addition, borrowers can choose two other repayment plans that allow
them to extend payments over 12 to 30 years.· (One requires fixed payments, the other
offers lower payments at first that increase over time.) And borrowers can also choose the
"pay-as-you-can plan" that links a borrower's monthly payment to his or her annual income
and loan amount.
·
.,.
Individual Education Accounts are part of the new Direct Student Loan program that
offers a variety of other benefits to students and taxpayers. The system eliminates seas of
red tape. and enables borrowers to obtain loans directly through schools. This way, students
needonly deal with one institution--"one-stop shopping" for student loans. Borrowers will
4-31
�pay only one loan servicer and receive one monthly statement throughout the life of their
loans.
Because of its·. siinpler structure, the new program will save more .than $6 billion by
the year 2000. Savings are already being passed along to students through lower fees and
interest rates. And that means millions of Americans will have an easier time paying for
college.
Already, 104 colleges and schools are participating in the Direct Loan Program, with
more than 300,000 students receiying loans totalling $1.2 billion. By Fall 1995, about 40
percent of new student loan volume will be in the new program. Individuals also are now
able to consolidate their federal student loans in Individual Education Accounts. Over the
ne~t five years, every post-secondary student --over 20 million Americans --will have the
opportunity to participate in the Direct Loan program.
Early reports on the effort are very positive. Colleges and universities--and the U.S.
Department of Education--have implemented the program by reassigning staff, needing little
or no new hiring. The President of the University of Michigan has reported that loans are
up43 percent on his campus. "With one-stop shopping," he says, "students have been able
to obtain their loans in record time." And the American Council on Education says the
reforms "will benefit millions of American students and their families for years to come. In
the final analysis, they will help ensure that the United States has a more highly-educated
citizenry and a work force better prepared for the challenges the nation will face in the next
century."
Comments from Students
On November 1, 1994, at the University of Michigan's Dearborn campus, a group of
students (including Stacy Tenderson, Alex Vincent, and Charles Tisdale) discussed the new
program with President Clinton. Here are selections from their comments.
"The new system is much easier. It works out great. I particularly appreciate the income
contingency of repayments. I'm going into the library profession, and as everybody knows,
it's not as lucrative as some of the other fields. I'd like to start out by repaying my loans
that way, and the move to .a more standardized payment plan as my salary potential
increases."
"Plans change, and in order to move with the things that happen in your life, having the
options is always a plus."
4-32
·"
�"It's less cumbersome, as far as getting your checks."
"
"From my perspective, it's what allowed me to dedicate my life to education and
community service within higher education."
•
"One of the nice things about this new process and this new procedure is that there's a lot
less paperWork. In the years before, we had a lot of paperwork; we had a lot of things to
fill out-- a lot of forms. It was very cumbersome .... With less paperwork, I can manage
my own time. I'm able to take more classes. I have a part~time job now."
"It has really made a difference in my life and I've seen it made a difference in a lot of
other young Americans lives."
Four Repayment Options .
•
Pay-As-You-Can Plan: A borrower's monthly payment is based on his or her
annual income and loan amount. Since repayment is a fixed percentage,
repayments rise when income goes up and decline when income decreases.
•
Standard Repayment Plan: Borrowers can still choose the standard fixed
payments over ten years.
• . Extended Repayment Plan: Borrowers can extend their repayments over 12-30
years depending on loan amounts.
•
Graduated Repayment Plan: Borrowers have lower monthly payments initially,
with payments increased every two years over a period of 12-30 years .
•
4-33
�Composite Borrowers with Better Options under lEA
1. Entrepreneur. Jane Smith, a recent graduate with a degree in computer science and
$25,000 in loans, wants to start her own business. Jane realizes that she will have high start-up
costs for the first few years, and chooses to draw a minimal salary of $12,500.
Without lEA under the standard repayment plan, Jane would face monthly payments of about
$300--nearly 30 percent of her income.
With lEA, she can still choose standard repayment, but also has three additional options:
Pay-as-you-can, with monthly payments around $85,
~hich
is a little more than 8 percent of her
income.
Graduated payments, with initial monthly payments that are less than $160, but gradually
increase to almost $300 near the end of the 20-year repayment period.
Extended repayment, with monthly payments of about $200 for 20 years.
2. Teacher. David Blackwell, a teacher, graduates from a private university. He borrowed
$35,000 to finance his undergraduate and graduate degrees, and his starting salary as a teacher is
$30,000.
Without lEA under the standard repayment plan, David's monthly payment would be $415 over
ten years, or almost 17 percent of his initial income.
With lEA, he can still choose standard repayment, but also has these other choices:
Pay~-you-can, with initial monthly payments of about $270 (less than 11 percent of his initial
income) would retire his loan in about 13 years.
Extended repayments with monthly payments of about $280 for a 20-year term.
Graduated payments with initial payments of about $220 that gradually increase to a little more
than $400 per month near the end of the 20-year term.
3. Professional with Temporary Hardship. A lawyer, Shirley Anderson, borrowed $60,000
to finance her undergraduate and law degrees .. She easily managed her $700+ monthly payment
while working at a law firm. After several years, she chooses to work part-time for $20,000
annually in order to care for an ailing relative.
Without lEA, Shirley would have to continue the high monthly payments.
With lEA, she can change to a pay-as-you-can plan requiring monthly payments of only $250.
Shirley would pay more when her income rose again, and she could change plans again to
accommodate a new job situation.
)I
4-34
�4F. NEW SKILLS FOR NEW ECONOMY
•
"We do not need all ofthese separate government programs telling people whatto
do. We ought to just give you the money if you're eligible for it and let you bring
it and get a good education."
President Clinton
Remarks at Sandburg Community College
January 10, 1995
.
. 4-35
�Actions to Date
President Clinton has aggressively deployed existing authority and resources to
begin building a reemployment system. Reemployment reforms already achieved
include:
•
About half of the states -- empowered with federal grants -- are planning or
assembling networks of one-stop ·career centers.
•
Funding for reemployment services has increased 150 percent from 1993 to $1.3
billion this year, increasing the number of workers who receive support to find
new jobs from 297,000 in 1993 to 679,000 in 1995.
•
Workers applying for unemployment insurance are getting individual
assessments of their skills, so that each can quickly fmd the kind of help they
need for rapid reemployment.
•
Administration-sponsored changes in unemployment insurance are encouraging
laid-off workers to start their own businesses.
Building on this progress, President ·Clinton has proposed a plan to provide every
American worker who is willing to learn and work with the tools. to build a better
future. Specifically, the President is proposing:
•
creating individual skill grants of $2,620 for unemployed and low-income
workers to enable individuals to take responsibility, acquire skills, select
services, and fmd rewarding work;
•
consolidating some 70 federal programs for dislocated and low-income workers,
and empowering states to create tailored, flexible systems for job search and
training;
•
offering tax deductions so that working Americans can afford the training they
need to acquire new skills;
•
making sure that Individual Education Accounts are available to every working
American to borrow money to fmance new learning and repay the loan as they
are able from future earnings;
•
making readily available better information on skills, jobs, and the quality of
training providers~-so that all. workers can learn new skills and fmd good jobs.
4-36
•
�•
Background
•
In the closing years of the 20th century, America's workforce is riding a rollercoaster of economic change.. New technologies and global competition are changing the
growth centers on the industrial landscape, from muscle-driven mass production plants
producing uniform goods, to brain-driven ·flexible fJ.PD.S producing customized goods and
services. This is mostly good for America: overall, we are well-equipped to prosper in a
fast-paced, increasingly integrated world economy.
But the unfortunate truth is that America's workforce is increasingly divided
according to skills. Just 15 years ago, a male college graduate earned less than 40 percent
more than a man with only a high-school diploma; today, he outearns the high-school
graduate by 80 percent. That's the story: for the most part, well-educated and skilled
workers are prospering, with the American dream of upward mobility still within their grasp.
But those whose skills don't match the changing economy contemplate their prospects with
anxiety. And Americans without education or skills drift further and further away from the
economic mainstream. Partly because so many Americans are unprepared for the new
economy, between 1973 and 1993 the average hourly wages of all workers actually fell.
In today' s economy, America's central challenge is to enable workers to get the skills
they need for rewarding work. The good news is that those skills can be learned, not just in
our school years, but throughout our lives. Every year of education or training beyond high
school-- whenever it occurs in a person's life-- increases future earnings by 6 to 12 percent.
We have many resources to offer new training. Our country is blessed with a rich
array of learning institutions to deliver the skills that workers want. And more and more
fli'IllS are fmding that the surest path to competitive advantage is embedding learning in the
workplace.
·
But the current patchwork of Federal reemployment and retraining programs isn't
doing the job. They're fragmented, full of conflicting rules that confuse the people they're
supposed to help. Many programs empower bureaucracies instead of working people to
choose who gets what training. They don't provide adequate information to those who want
it. And many aren't held accountable for what matters most--equipping America's workers
io fmd rewardmg work.
J
It's time to change the system and make sure that every American worker has access
to the training and information they need. If we do, America's workers and families will
reap the reward: for all who continue to learn and work, a sure path to higher wages and
rising living standards.
4-37
�The Initiatives
Already, President Clinton has aggressively deployed existing resources to begin
building a reemployment system.
•
About half of the states--empowered with federal grants--are planning or assembling
networks of one-stop career centers to offer efficient, customer-driven access to
counseling, job listings, training, education, and other reemployment services.
•
Funding for dislocated worker training and reemployment services has increased 150
percent from 1993 to $1.3 billion this year, giving hundreds of thousands of
additional workers support to fmd new jobs.
•
Workers applying for unemployment insurance, because of.plant closings or defense
conversions, are getting individual assessments of their skills and risks of long-term
unemploymen,t, so that each can quickly fmd the help they need to get new work.
•
Changes the Administration sponsored in unemployment insurance laws encourage
laid-off workers to start their own businesses.
-•
But these accomplishments are on:Iy a beginning. President Clinton has called upon
Congress to join with him and transform the nation's employment and training systems, root
and branch. His plan will take money out of bureaucracies and empower workers .by putting
resources and information in their hands. And it will replace the disorganized welter of
education, training, and job s~arch assistance_ with an efficient, effective s~stem.
Principles of reinventing government inspire President Clinton's initiative. It will
dramatically consolidate Federal programs and hold them newly accountable, and offer new
flexibility to states to tailor their employment systems. The effort will empower the workers
who know better than any bureaucracy just what they need. And it will make business and
labor full partners in the reform program.
.
The first part of President Clinton's initiative aims to put the resources to obtain
training and fmd jobs in the hands of America's workers. His initiative will create individual
Skill Grants for dislocated and low-income workers and job seekers. Valued at up to $2,620
per year, these grants will be payable toward whatever certified training that America's
workers believe they need. And the grants will be supplemented with the right to stUdent
loans guaranteed through President Clinton's already enacted Individual Education Account
program. Together with the skill grants, IndividUal Education Accounts ensure that workers
4-38
...
�..
J ,i
can get the training they need--and repay their loans on an flexible, affordable schedule.
While President Clinton's reform puts new money in the hands of workers, it will
consolidate some 70 Federal programs. In place of the old bureaucracies, the proposal
empowers states to redesign training programs and delivery systems. Cumbersome
regulations will disappear, and. states that eliminate bureaucracies will be able to plow the
money back into training. Within five years, every State is expected to have completed its
reform plan and begun implementation of an efficient, effective system.
The new systems will make sure workers have the information about training and jobs
that they need to make smart choices. The proposal speeds implementation of the One-Stop
Career Centers that will provide comprehensive data about jobs and training. And it will
offer workers new ways to gather this information to make intelligent job and training .
decisions, such as interactive computers.
The President's reforms break down the artificial lines dividing different types of
training programs. The new system will link adult training opportunities to school-to-work
initiatives that are already underway. States will be able to eliminate duplication, use funds
more flexibly, and build cross-cutting partnerships with businesses, higher-education
institutions, and community services.
The system brings the best practices of the private sector to govenunent. The
business and labor communities will help each state to design its strategic plan and enSure the
highest level of quality. Private firms will be encouraged to form consortia to provide
training, and companies that upgrade worker skills in innovative ways will receive special
awards to highlight their successes.
This is not a traditional federal program. Because workers will get "consumer
reports" on the quality and track records of training programs, institutions that don't work
won't survive. States will develop standards of excellence that their programs must meet,
and Federal standards will ensure that unqualified institutions and programs are not
approved, and unsuccessful ones are not continued.
.
The President's initiative will arm every American worker with the tools to learn new
skills, fmd good jobs, and earn higher wages at more rewarding work. It will be up to
individual Americans to make the most of this opportunity--in their own way, to build a
better life for themselves and their families. In every generation, Americans have risen to
that challenge,· and we will do so again. With new skills for a new economy, Americans will
take responsibility for restoring the tradition of middle-class prosperity--and for passing it on
for generations to come .
•
4-39
�Case Study: Deb Woodbury
Deb Woodbury of Bangor, Maine dropped out of high school in the tenth grade
to get married. When her marriage ended a few years later, she found herself .
responsible for supporting her three children. She worked first as a cook and next in a
textile factory. But then her company's fortunes soured and Deb was laid off. And
fmding a new job was difficult. She didn't have a high school diploma, and most of her
skills were fit for an industry that was losing jobs .. So Deb enrolled in a local job
training program, where she earned her OED-- which gave her the momentum to then
earn a certificate in office and computer skills from a local college. Now Deb is a sales
and service representative for a railroad, responsible for pricing nearly half of all
commodities the railroad hauls. Her current salary is four times what she earned in her
frrst job. Deb says that when she finishes putting her fmal two children through college,
she'll return to college herself to pursue an Associates Degree.
..
Case Study: · Antonio Dodero
Antonio Dodero was a 30-year veteran of the defense industry when--like many
of his colleagues in southern California--he lost his job and knew· it was gone for good.
"I did a little soul searching," Mr Dodero wrote in a letter to the President, "and
decided it was time for a ·change. I'm at what you could call a difficult age, too young
to retire but too old to start all over. "
He enrolled in a new-skills program that was part of our emerging reemployment
system. He chose courses in refrigeration, heating, and air conditioning repair that
allowed him to· apply some of the skills he already had. And he supplemented his
experience with extensive classroom training in this new line of work.
Mr. Dodero graduated from his program with honors -- and thanks to job search
assistance provided by his reemployment program, he quickly landed a good job as a
service technician at a local heating and air conditioning company, then an even better
job at a similar frrm.
.
4-40
�5. INTERNATIONAL TRADE
Introduction
"The truth of our age is this -- and must be this: open and competitive
commerce will enrich us as a nation... And so I say to you in the face of all the
pressures to do the reverse, we 'must compete, not retreat. "
President Clinton
American University
February 26, 1993
We live in a new global economy in which people, products, money and ideas crisscross the world with blinding speed, disregarding national boundaries. More than ever
before, the growth of the American economy and the quantity and quality of the jobs it
produces are tied to our ability to compete in this new economy.
Every day, the lives of most Americans are touched by the flows of commerce.
Forty years ago, imports and exports accounted for about $1 in ev~ry $1 0 of our Gross
National Product. Now they represent $1 in every $5 of GNP. Nearly three-quarters of
what we produce in America is subject to competition at home or abroad from foreign
producers. And some 7 million Americans work in export-related jobs.
In recent years, American companies have reemerged as the most competitive in the
world. Once again, we are the world's largest automobile producer and the leading seller
of computers and telecommunications. From movies to microchips, beef to biotechnology,
the world wants to buy the goods and services we produce. Given the opportunity,
American companies can succeed in the global economy.
But to have that opportunity, our companies must be allowed to compete freely and
fairly. That basic assumption lies at the heart of President Clinton's international trade
agenda. During its first two years in office, the Clinton Administration conceived and
implemented a dynamic trade strategy. That strategy has two parts: first, tearing down the
barriers that deny our companies the opportunity to compete fairly while enforcing our
trade laws which ensure that American fnms are not disadvantaged by foreign practices;
and second, helping our· companies take advantage of these opportUnities through a
vigorous National Export Strategy.
The United States already has the most open markets in the world. Foreign
companies have great opportunities in our country, but American firms face more limited
opportunities abroad. In just two y~ars, the Clinton Administration radically leveled the
I
5-1
�playing field. It reduced worldwide trade barriers by completing the Uruguay Round of the
General Agreements on Tariffs and Trade --the largest, most comprehensive trade
agreement ever. It opened markets in our own hemisphere by winning passage of the North
American Free Trade Agreement --which already has increased American exports to
Mexico 20% and created more than 100,000 jobs. And the Administration secured
commitments to make trade more free in Asia and Latin America -- the world's fastest
growing regions -- at the Asia Pacific Economic Cooperation Forum and the Summit of the
Americas.
To take advantage of these new openings, the Administration also launched a
National Export Strategy. At the heart of this strategy lies a coordinated effort by all of the
government's economic agencies to advocate aggressively on behalf of American .business.
The Administration assisted firms with 100 major contracts worth more than $20 billion in
exports -- from a multi-billion dollar Saudi Arabian telecommunications procurement to a
major contract to build an Indonesian power plant. These exports are expected to support
over 300,000 American jobs. Many of these jobs are in small and medium sized
·
compariies, who act as suppliers for major overseas projects. The Administration also acted
aggressively and effectively to provide loans and fmancial guarantees to U.S. exporters. It
streamlined the export licensing system, eliminating over $30 billion of outmoded controls
that handcuffed American business without benefiting our national security. And it
·reorganized the way we provide our services to matce them more readily accessible to small
and medium sized businesses.
Two years ago, the United States stood at a crossroads on how we were going to
deal with the risks and uncertainties of the new global economy. Many Americans wanted
to go backward on the issue of free and open trade. But the Clinton Administration chose
to reach out, not retreat. As a result, we are creating new high paying jobs in the United
States for millions of Americans and making our workers stronger for the century ahead.
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't
.\0
�SA. TEARING DOWN TRADE BARRIERS
Actions to Date
•
For forty years, the United States has had the most open economy in the world, while
faCing unfair trade barriers in foreign markets. The status quo gave foreign countries
and compahies the freedom to compete freely and fairly with American business in the
United States, while limiting opportunities for our companies abroad. In two years, ·
President Clinton led the most successful market opening effort ever. As a result of
these efforts, the Administration:
•
Successfully concluded the Uruguay Round of global trade negotiations under the
General Agreements on Tariffs and Trade round after seven years of negotiations.
The largest, most comprehensive trade agreement ever signed, GATT will level the
playing field between the U.S. and its major trading partners by slashing tariffs and
taking down barriers to trade that had unfairly penalized American business. GATT
creates the largest tax cut in the history of the world through its tariff reductions.
•
Put into effect the North American Free Trade Agreement, which has allowed
American companies to increase sales of U.S. goods and services to the emerging
Mexican market. In just one year, American exports to Mexico increased by 20%,
and exports to Mexico and Canada created more than 100,000 new jobs.
•
Secured a commitment to achieve free trade. in the fastest growing regions of the
world, Asia and Latin America, at the Asia Pacific Economic Cooperation Forum
and at the Summit of the Americas.
"
•
5-3
�1. OPENING WORLD MARKETS --GATT
"No country can escape the global economy, and the greatest, largest, most
powerful country in the world cannot escape the global economy. We must lead it
in a direction that is consistent with our values, consistent with our interests,
cpnsistent with what is necessary to keep the American Dream alive. That 's really
what GATT is all about. "
President Clinton
December 8, 1994
Signing of the Uruguay
Round Agreement Act
Background
In the aftermath of the First World War, there were strong pressures in the United
States to withdraw from the world --politically and economically. The United States raised
barriers and ushered in an era of economic isolationism and protectionism which
exacerbated the Great Depression and helped provoke worldwide economic collapse. The
United States and the other major trading nations learned their lesson and, at the end of the
Second World War, took a the first bold step to establish an open, liberal trading regime:
The General Agreements on Tariffs and Trade ("GATT").
Through successive "rounds" -- a series of negotiations among all its members -:- the
GATT has reduced tariffs worldwide by 85 percent. Nonetheless, the U.S. historically has
maintained the most open markets in the world while other nations were allowed to
preserve higher barriers to trade or to play by different rules. The average U.S. tariff was 4
percent; other countries maintained tariffs as much as ten times higher. U.S. products -some of the most competitive products in the world -- faced an unfair disadvantage& an
extra tax, when exported to another country.
President Clinton was determined to complete the GATT and at long last make the
playing field more level for American business.
·
The Initiative
The new GATT agreement will make trade more free and more fair for American business.
GATT will:
5-4
•
�•
Cut foreign tariffs on manufactured products by more than one-third -- a $744 billion
worldwide reduction in tariffs, the largest international tax cut in history;
•
Protect from piracy the patents, trademarks and copyrights of some of our most
competitive industries, including pharmaceuticals, entertainment and software;
•
Tear down barriers to aid U.S. companies that export services such as accounting,
advertising, architecture, engineering and construction;
•
Greatly expand export opportunities for U.S. farmers by limiting the ability of foreign
governments to distort agricultural trade through tariffs, quotas, subsidies and other
domestic policies and regulations.
•
Ensure that the fast-growing economies in the developing world live by the same trade
rules as the advanced industrialized countries.
Under the agreement, all quantitative restrictions will be converted to tariffs and
capped --preventing other countries from further raising their barriers to U.S. exports. This
will provide about $43 billion in increased export opportunities each year in sectors ranging
from computers to furniture, pharmaceuticals to paper. For example, Japan and Korea are
opening their rice markets for the first time ever.
Taken together, the increased export opportunities generated by this agreement will
create hundreds of thousands of. high-paying jobs -- jobs that pay 13%-17% more on
average than non-export related jobs. When fully implemented, it will add $100-200 billion
·
to the U.S. economy each year.
•
5-5
�Case Studies
•
For American workers who produce farm machinery, GATT is a giant step
forward. Right now, fanil machinery imported into the U.S. faces a "zero" tariff
--no extra taxes. However, tariffs on U.S. farm machinery exports to Europe
range from 3.5 to 9 percent, resulting in an almost two-to-one trade deficit in
favor of European manufacturers. GATT eliminates all tariffs on farm machinery,
saving American exporters tens .of millions of dollars and allowing them to
compete more effectively in the world marketplace.
•
The U.S. exports crops grown on about 1 out of every 3 acres of our cropland.
Because domestic demand for farm products does not grow as fast as farm
productivity, expanding export markets is vital to our farmers ' livelihoods. In
1993, U.S. agricultural exports totaled $42.5 billion. Twenty percent of these
exports went to markets that impose some form of non-tariff trade barrier.
Almost 60 percent were commodities that face subsidized export competition.
And many markets were almost totally inaccessible to U.S. exports. Now, for
the first time, agricultural trade will be brought under GATT rules. Subsidized
exports must be reduced by 21 percent in volume and 36 percent in value over 6
years. Since the European Union subsidizes its exports much more than the
United States, it will have to cut back its subsidies much further than we do.
GATT's successor, the World Trade Organization, will now turn its attention to fully
implementing the GATT obligations, resolving .issues not adequately addressed by the
GATT -- for example, fmancial services -- and taking up new issues on the international
trade agenda.
•
�2. OPENING MARKETS NEXT DOOR -- THE NORTH AMERICAN
FREE TRADE AGREEMENT (NAFTA)
"In a fundamental sense, this debate about NAFTA is a debate about whether we
will embrace these changes and create the jobs of tomorrow, or try to resist these
changes, hoping we can preserve the economic structures of yesterday. "
President Clinton
September 14, 1993
Washington, D.C.
Background
The North American Free Trade Agreement (NAFTA) went into effect on January 1,
1994. · But the potential for developing new markets and free trade with Mexico and
Canada has been increasingly apparent for years.
Under the 1988 bilateral free trade agreement with Canada, our largest trading
partner, U.S. merchandise exports have increased by nearly 60 percent.
In 1986, Mexico undertook a revolutionary program to open its economy. It
privatized industry after industry, cut its budget deficit, and slashed inflation. And it began
-- unilaterally -- to reduce its trade barriers. By 1992, our exports to Mexico -- more than
$40 billion -- and the jobs they supported -- some 700,000 --had tripled.
.
But despite Mexico's more open economy, barriers to many U.S. goods and services
remained high. For example, Mexico's average tariff rate was 10% --a ten cent tax on
every dollar of U.S. exports. The average U.S. tariff on Mexican exports was only 4% and
half of Mexico's exports to the U.S. came in duty-free. And U.S. exporters of services -including telecommunications, insurance, banking· and advertising -- were not allowed to
compete on equal terms with their Mexican competitors.
"
.
Republicans and Democrats alike saw Mexico's potential. President George Bush
began NAFTA negotiations with Mexico and Canada in 1991, and completed negotiations
on trade provisions in August of 1992. President Clinton pledged to support NAFTA -- so
long as it provided adequate protections for workers, farmers and the environment. The
Clinton Administration proceeded to negotiate path-breaking side agreements on labor, the
environment and sudden surges in imported goods. Working with a bipartisan coalition,
President Clinton won approval for NAFTA in November, 1993 .
5-7
�The Initiative
NAFT A went into effect on January 1, 1994, and Mexico began to sweep away
decades of protection and over-regulation. Half of all U.S. exports to Mexico were
immediately made tariff-free. This included some of our most competitive products:
semiconductors; machine tools; aerospace equipment; telecommunications equipment; and
medical devices. Within five years, two-thirds of U.S. industrial exports will enter Mexico
duty-free. After ten years, almost all goods traded between the U.S. and Mexico will be
duty-free.
NAFTA also requires Mexico to open its market to U.S. service exports. And it
rolls away layers of red tape in Mexico, removing licensing requirements that hampered
U.S. exporters. U.S. services exporters will now be able to provide most services crossborder, without having to establish operations in Mexico or Canada, as in the past.
A year after NAFTA entered into force, the results. speak for themselves. U.S.
exports to Mexico are up 22% compared to 1993 -- an average of $1 billion a week.
NAFTA has created tens of thousands of U.S. jobs. Exports to Mexico and Canada now
support 2.7 million U.S. jobs. More than 100,000 of those jobs have been created since
NAFTA went into effect.
NAFTA sets a long-term course for our relations with Mexico. Despite its recent
financial difficulties, the Mexican economy remains fundamentally sound and will continue
· to grow as a major market for our goods and services. Mexico's 90 million citizens sp(mt
70 cents of every import dollar on goods made in the U.S. --even before NAFTA gave
Americans a leg up on our European and Asian competition. NAFTA locks in place
important reforms, including the elimination of tariff taxes on U.S. exports.
Recognizing Mexico's growing importance to the United States, President Clinton
took decisive action to help Mexico overcome its financial crisis before it deepened and
spread to other countries that also buy billions of dollars worth of our goods and services.
The President ·s· plan helped stabilize Mexico in a moment of difficulty -- preserving a huge
export market for American business, securing American jobs, protecting our borders from
an increase in illegal immigration and preventing the crisis from spreading to other
emerging economies.
"
5-8
�Case Studies
•
In Toledo, Ohio, auto workers are producing thousands of Jeeps for export to
Mexico. In fact, Chrysler sold more vehicles to Mexico in the first three months
of 1994 than in all of 1993. Because of NAFTA, Ford is shifting production of
its Mexico-bound Thunderbirds and Cougars from Mexico to Lorain, Ohio. The
Big Three anticipated sales of 55,000 vehicles to Mexico in 1994, compared to
9,479 in 1993.
•
In Washington State, apple farmers are benefiting from NAFTA's elimination of
tariffs and import licenses. They exported 4.1 million boxes of apples to Mexico
in the first four months of 1994, compared to only 2.7 million for all of 1993.
•
NAFTA's success has spread far beyond the borders of the United States,
Canada and Mexico. At the Summit of the Americas in December 1994, Chile -- the
fastest growing economy in Latin America over the past decade -- began the process of
joining NAFTA. Throughout the hemisphere, NAFTA has motivated other countries to
liberalize their own trade regimes. In fact, all of the democratic nations of the
hemisphere have agreed to negotiate a hemispheric free trade area by 2005. In a very
real sense, NAFTA is a gateway to a continent of opportunity .
..
5-9
�3. OPENING REGIONAL MARKETS -- THE SUMMIT OF THE
AMERICAS AND APEC
"The United States has concluded agreements· to push for regional free trade in the two
fastest growing areas of the world --first, at Bogor in Indonesia with the Asian Pacific
economies, and [then] with the free trade agreement at the Summit of the Americas.
These things, along with the implementation of GAIT and the expansion of the NAFTA
agreement, will set the agenda for world trade for years to come, in ways that benefit
ordinary American families,' that generate more high-wage jobs in this country and
more opportunity in the countries of our trading partners. "
President Clinton
December 12, 1994
Miami, Florida
Background
As we approach a .new century, we must rethink our traditional notions about trade
priorities. While markets in Europe and Japan will continue to be important, the future lies
in the developing economies of Latin America and Asia. The Western Hemisphere already
is our most important export market, with 1994 exports totaling $207 billion, one third of
our world-wide total: And nearly another third of our exports now go to Asia, supporting
more than two million jobs. As the countries in these regions develop, their demand for
U.S. goods and services will rise dramatically, which will support mill1ons of jobs
throughout the United States.
But our competitors in Europe and Japan also seek to develop these markets. And
significant barriers to free trade remain. One of the greatest challenges we face in the trade
arena is opening the door for U.S. exporters to these emerging markets of the future.
The Initiative
Two major U.S. initiatives demonstrate the Administration's commitment to opening the
markets of tomorrow.
The Summit of the Americas
"This is more than words; this is a commitment to deeds. Free trade in our
5-10
•
�•
hemisphere has been talked about for years, but because of this process we 've
launched this weekend it will now become a reality. Free trade will yield dramatic
benefits in terms of growth and jobs and higher incomes . . . and reaffirm our
commitment to promote the rights and interests of our workers so that all our people
have the chance to benefit from free trade. "
President Clinton
December 11, 1994
Miami, Florida
Over the next decade, American companies have exceptional opportunities in Latin
America. In preliminary studies, the World Bank estimates that Latin America will need
infrastructure investment on the order of $24 billion for power generation, $14 billion for
transport, $12 billion for water and sewerage, and $12 billion for telecommunications in
each year for the rest of the decade. Adding investments in natural gas, flood control and
other urban infrastructure brings the total of needed investment to more than $60 billion per
year. And Latin America is a region where the U.S. has a leg up on the competition. The
countries of Latin America already import 43% of their goods from the U.S., compared to
13% from Asia and 20% from Europe. By the year 2000, it is likely that Latin America
alone will be a larger customer for U.S. exports than Western Europe.
Over the past few years, Latin America has embarked on a historic effort to
liberalize its economies. Despite great strides, much of the region's potential remains
locked behind the walls of tariffs and other barriers. For example, Chile's average tariff-the border tax it applies to U.S. goods -- is around 11%. That's more than 250% higher
than the average U.S. tariff. Argentina maintains average tariffs of 10%; Brazil 14%.
These are major markets, but U.S. access is disadvantaged compared to local producers.
New trade agreements could bring down barriers to U.S. exporters.
Trade topped the agenda in December 1994, when President Clinton hosted the
democratically elected leaders of the Western Hemisphere at the "Summit of the Americas"
-- the first meeting .of hemispheric leaders in three decades. At the Summit, the President
secured agreement from all 34 nations to negotiate a "Free Trade Area of the Americas" by
2005. Hemispheric integration would create the world's largest free trade area-- a $13
trillion market with more than 850 million consumers by 2003. The nations of the
hemisphere used the Summit to adopt an action plan for achieving this goal. Trade
ministers from each of the participating countries will meet in June to discuss and adopt
concrete steps for moving forward.
•
As a first step toward integration, the United States, Mexico, Canada and Chile at
the Summit of the Americas announced their intention to extend NAFTA 's benefits to
Chile. With its· high economic growth, low inflation and commitment to high labor and
environmental standards, Chile represents a valuable opportunity to U.S. exporters. In
5-11
�addition to opening a key emerging market, successfully completing a free trade agreement
with Chile would send an important signal to the hemisphere that economic and political
liberalization pays real dividends.
•
The Asia Pacific Economic Cooperation <APEC)
•
"We want the Pacific Ocean to unite us, not to divide us ... We sought to give this
incredibly diverse Asian Pacific region a co7JZmon identity rooted in a common
purpose, committed to free trade and investment. "
President Clinton
November 16, 1994
Jakarta, Indonesia
Asia boasts the fastest growing economies in the world. Between now and the year
2000, Asia will account for one-third of the global growth in imports. U.S. workers and
farmers are particularly well-positioned to take advantage of this growth. Already, the
region absorbs $135 billion, or nearly one-third, of all U.S. merchandise exports and
supports more than 2 million U.S. jobs. Increasing our market share by just 1% in Asia
would create more than 100,000 new U.S. jobs.
That's why President Clinton -- through the Asia Pacific Economic Forum -- has
made Asia a top priority for our economic engagement. At the 1993 APEC meeting hosted
by the President in Seattle, the leaders of the 15 APEC member economies sought to give
this extraordinarily diverse region a common purpose: that of a community committed to
free trade and investment. At the 1994 APEC summit in Indonesia, President Clinton led
the effort to transform the vision set out in Seattle into reality by securing a commitment to
achieve free trade and investment in the Asia Pacific region by 2020.
Two examples among many underscore the importance of President Clinton's initiative.
•
By the year 2020, auto sales in Indonesia, Malaysia, Thailand and the Philippines will
equal the current market in Canada and Mexico combined and exceed the current
market in the UK. However, tariffs on autos being imported into these countries range
as high as 60%. The APEC initiative -- by eliminating these tariffs -- Will allow
American companies to compete fairly for their share of this huge market.
•
Between now and 2020, APEC countries have plans to construct $1.1 trillion in
infrastructure projects -- or the entire annual Gross Domestic Products of Greece,
Portugal and Ireland combined. Once completed, the APEC agreement will reduce the
barriers facing U.S. exporters of products that are essential to building these projects.
5-12
•
�In the months ahead, APEC members will develop a blueprint for achieving free and open
trade and investment throughout the region. The Leaders will review this blueprint at their
next meeting in November 1995 in Osaka, Japan .
•
5-13
�58. HELPING AMERICAN BUSINESS
DO BUSINESS
.
.
•
.
"I have long believed that America has a bright future in this rapidly changing
global economy. We are now positioning ourselves to compete for new markets
and the jobs they will create at home as never before. The implementation of
NAFTA and the passage of the GAIT are critical to opening markets abroad.
The National Export Strategy is essential to make sure that we do in fact take
advantage of those openings. "
President Clinton,
October 1994
. National Export Strategy Report to Congress
Actions to Date
Opening new markets for American business around the world is only half the
story of the Clinton Administration's international trade initiative. Through its National
Export Strategy, the Administration has also done more than any of its predecessors to
help American business take advantage of these new opportunities.
The Clinton Administration's National Export Strategy:
•
Supports U.S. bidders in global competition through a coordinated government
advocacy program. The program ensures that U.S. companies receive a full and fair
hearing as they compete for contracts around the world.
• Improves trade finance by facilitating our companies' access .to loans, loan
guarantees,
and feasibility study funding while successfully fighting foreign "tied aid"
that unfairly handicaps U.S. business.
•
Reduces and eliminates counterproductive export control regulations -- freeing more ·
than $32 billion of high technology exports from restrictive and outdated controls.
•
Establishes U.S. Export Assistance Centers which provide comprehensive export
financing and marketing information to small and medium sized firms in "one-stop
shops" throughout the U.S.
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,
�1. SUPPORTING U.S. BIDDERS IN GLOBAL COMPETITION
•
"[We are] changing the culture of our [government] and getting [it] in country after
country much more involved in trying to promote commercial activities... We will
continue to work hard at home and abroad to help our people thrive in ·the global
economy. "
President Clinton
February 16, 1994
Background
The competition for major contracts by foreign countries is fierce. Most of our major
trading partners -- including Japan, Germany, France and many others --aggressively help
their firms expand exports, especially by using high level officials as advocates to close a
deal. Until the Clinton Administration took office, the United States was the exception to
this rule. As a result, American business was losing billions of dollars in sales every year,
largely because U.S. government advocacy efforts were not as effective as those of foreign
governments.
The Initiative
Recognizing the crucial role government can play in helping American business reap
the many benefits of the new world economy, the Clinton Adniinistration launched a
comprehensive advocacy program to give American bidders a full and fair opportunity in
global competition. Since November, 1993, this program assisted American firms
competing for over 120 major contracts --contracts that are worth over $24 billion in U.S.
exports and support more than 360,000 jobs in the United States.
None of these deals would have advanced if the companies in question did not offer
top quality products and services, arid without their hard work and skillful marketing. But
the American government was able to play an important -- and sometimes crucial -supporting role in helping these companies close their deals or move them forward despite
strong competition.
,
.
The advocacy progiam coordinates resources from across the U.S. government in a
full court press on behalf of American business. American ambassadors, commercial
attaches and visiting officials go to bat for our companies with foreign governments and
businesses. A new Advocacy Center established at the Department of Commerce works
5-15
�closely with U.S. bidders. ·Its computer database tracks pending projects around the world.
When assistance on a particular'project is needed, interagency teams are quickly mobilized
to develop project-specific strategies.
All of the government's economic agencies -- including the Departments of
Commerce, Treasury and State and the Export/Import Bank, the Overseas Private
Investment Corporation, and the Trade and Development Agency -- meet on a regular basis
to develop and coordinate strategies for American companies seeking help. And top
Administration officials, starting with the President and his Cabinet, have demonstrated an
unprecedented willingness to lend their support --including face-to-face meetings with
foreign decision-makers both here and abroad -- American exporters competing for major
overseas contracts.
•
•
Case Studies
•
With the help of the Trade and Development Agency, last May, Hughes Space &
Communications Company signed a multi-million dollar deal with Malaysia for the
East Asia Satellite. The project supports jobs for about 400 people at Hughes'
facilities in El Segundo, California.
•
With strong personal support from President Clinton, Secretary of State Christopher
and Secretary of Commerce Brown, AT&T won a $4 billion contract to modernize
Saudi Arabia's telecommunications system -- beating out major competitors from
Germany, France, Canada and Sweden. The majority of manufacturing for the
project will take place at AT&T's plants in Oklahoma City, OK, Andover, MA and
Columbus, OH. Software for the system will be created at facilities in Illinois and
New Jersey.
•
Following a trade mission to Brazil, Argentina and Chile led by Secretary Brown
and 20 American CEOs, contracts and d~ memos worth more than $1.7 billion
were signed -- including a $1.4 billion Amazon ·rain forest protection program
contract awarded to Raytheon Corp., a defense contractor moving into non-defense
related activity. The Commerce Department's International Trade Administration
and the National Oceanic and Atmospheric Administration provided technical and
scientific expertise and critical links to Brazilian agencies to help Raytheon win the
contract, and the U.S. Export-Import Bank provided a critically important
competitive fmancing package for the deal.
•
With the help of sustained advocacy by the Clinton Administration, in the six
months from March to August 1994, American firms won 34 major contracts in Asia
--from turbine generators in China to waste incinerator technology in Taiwan.
These contracts will generate $5.3 billion in U.S. exports and support 85,000 jobs
across the United States.
5-16
..
�\
•
In addition to these advocacy efforts, we are targeting our export promotion efforts
on those regions with the greatest growth potential for American exporters. We will focus ·
on the big emerging markets -- Argentina, Brazil, Mexico, the Chinese Economic Area,
India, Indonesia, South Korea, Poland, Turkey and South Africa -- that are expected to
account for over 40 percent of total global imports over the next 20 years. To improve our
competitive position in these markets, we will establish bilateral forums to discuss
commercial cooperation; open new U.S. Commercial Centers to provide U.S. exporters easy
access to the. full array of government export promotion and financial services for small to
medium sized exporters and larger companies as well; expand cabinet and sub-cabinet
travel to these markets to strengthen commercial ties; and craft long term export strategies
for each country, to be directed by interagency teams.
2. IMPROVING TRADE FINANCE
Background
The availability and terms of trade fmancing often play a decisive role in securing
export contracts. Foreign governments give their companies a leg up through subsidies,
loans and loan guarantees. They also provide "tied aid" -- loans or grants that are only
available to recipient governments if they buy goods and services for the project in question
from the donor country. In 1994, tied aid totaled $7 billion worldwide and seriously
handicapped American companies bidding for foreign capital projects.
Working together through the National Export Strategy, the Clinton
Administration 's trade and economic agencies have responded to this challenge. As a
result, companies have easier access to more capital. And the Administration has taken
effective action to counter fmancing practices by other countries that make trade unfair.
The Initiative
,
•
The Administration increased the Overseas Private Investment Corporation's project
fmancing limit from $50 million to $200 million and doubled its per project insurance limit
to $200 million. The higher limits have already made support available for 15 major
projects -- in power, energy, telecommunications and transportation --that OPIC might not
otherwise have been able to support. All told,· thes~ and other projects OPIC supported in
1994 are expected to produce more than $3 billion in U.S. exports over the first five years
of the lives of those projects.
The Administration also initiated
~ovative
5-17
cooperative ventures with state and
�local governments to take advantage of new opportunities. Last year, f~ur U.S. Export
Assistance Centers were opened in Baltimore, Miami, Chicago, and Long Beach to colocate the marketing, counseling and trade fmance services of Commerce, the Small
Business Administration, and the Export/Import Bank. Eleven more "one-stop shops" will
open in 1995, creating a comprehensive national network. The Small Business
Administration now co-guarantees export loans with state and local governments. These
arrangements leverage both SBA and the local finance entities' guaranty capacity and allow
the SBA to benefit from local expertise and loan-packaging capabilities. The Export/Import
Bank's City/State Program assists small and less experienced exporters through the entire
export financing process: from counseling to drafting proposals .to securing commercial
bank loans and guaranties. In FY 1993, the program supported $75 million in U.S. exports.
•
•
By reinvigorating and consolidating funding for feasibility studies in the Trade and
Development Agency, the U.S. government has enabled American business to become more
easily involved in the planning stage of infrastructure projects. The studies include advice to
a host country about the availability of appropriate U.S. equipment and services -- advice
that often leads to follow-up contracts for the feasibility contractor and to U.S. exports
during the project's implementation.
In tandem with its efforts to improve access to capital, the Administration worked
within the Organization for Economic Cooperation and Development to adopt new tied aid
guidelines. As a result, tied aid has decreased dramatically --from $15.5 billion in 1992 to
$7 billion in 1994. To eliminate trade distortions arising from the use of tied aid credits,
the Administration established the Tied Aid Capital Projects Fund. The Fund, managed by
the Export/Import Bank, does not initiate tied aid credits -- indeed, Exportll~port seeks to
convince foreign countries not to provide trade distorting tied aid. Nonetheless, the Fund
is available to counter tied aid used by foreign competitors which disadvantages American
competitors.
"'·
.
5-18
�Case Studies
..
•
• · OPIC supported dozens of projects in Central Europe, including the International
Paper Company's acquisition of a major mill in Poland and U.S. West's venture to
bring cellular telephones to Hungary. These two deals will each generate about $30
million in U.S. exports and support hundreds of jobs in America.
•
With the support of a joint SBA/State of California loan guaranty, Laub Engineering,
a IS-employee producer of liquid filling systems, secured a contract to supply its ·
tecluiology to a major motor oil plant in Indonesia. As a result, the company
doubled its work force, and all the new employees will stay on after the contract is
completed.
•
Armed with $300,000 from the Trade and Development Agency to help fund a
feasibility study on health care in. the Republic of Tatarstan; Rlissia, HCR, a
Rochester, NY company, generated orders to purchase medical equipment from
several U.S. suppliers and is pursuing several spin-off projects as a result of the
.
study.
This year, the Administration will concentrate on a new initiative with the potential
to help increase exports. Project finance, a type of financing where repayment is based
on the revenue flow of the project rather than external guarantees, is becoming a
significant method of funding major projects, especially in emerging markets where
infrastructure investment is a priority. OPIC and Export/Import Bank are arranging new
ways to provide project finance to support U.S. exporters.
3. REMOVING OBSTACLES TO EXPORTING
"
"We have on too many occasions, for too many years, not had a coordinated, effective
[export control} strategy... Streamlining unnecessary controls will make the rest of the
system more responsive and more efficient. "
President Clinton
September 29, 1993
Remarks announcing a National
Export Strategy
5-19
�Background
Over the course of the Cold War, the United States imposed export prohibitions and
licensing requirements on thousands of products that could be of strategic value to
communist countries. Successive administrations sought to balance national security
concerns against the burden these restrictions placed on American business.
..
•
While our security interests require that· we maintain some export controls -- for
example, to prevent the proliferation of nuclear materials -- with the end of the Cold War,
many licensing restrictions became obsolete and counter-productive. They imposed
additional costs on American companies and hindered their ability to fill orders as rapidly
as their competitors, without benefit to America's national security.
The Initiative
In just one year, the Clinton Administration has made major progress in eliminating
unnecessary and ineffective ·export controls and in streamlining the licensing process for
those products that still require an export permit. As a result, the value of goods requiring
an individual export license already has dropped from $6 billion per quarter to $2 billion -an annualized reduction of more than $16 billion.
The computer industry was one of the major beneficiaries of the liberalization of
export controls. The United States had required a· license to sell computers operating at a
processing speed of over 12.5 MTOPS. This covered virtually every computer above the
level of a desktop personal computer and even restricted the export of some desktop models
that are available in most electronics stores. The Administration raised the MTOP ceiling
to 1000 -- this will free some $30 billion of American computer exports per year from
licensing requirements.
Reducing the number of licenses required has had the added· benefit of eliminating
gridlock for those products that still require export permits. To further streamline the
licensing process, the Administration will continue to simplify :regulations and further
improve interagency coordination, which would speed decision making at all levels of
review and reduce the maximum processing time by 25 percent.
•
5-20
�Case Study
.
Before the liberalization of export controls that began in 1993, the licensing lead
time for exports by Silicon Graphics, a computer software maker, averaged 150
days. Within a year, the lead time dropped to less than thirty days, enabling the
company to double its volume shipped.
,
5-21
�•
6 .. BUILDING SAFER COMMUNITIES
•
Introduction
100,000 New Police Officers
•
President Clinton's landmark Crime Bill, signed on September 13, 1994, is putting
100,000 new police officers on our streets, funded by savings realized through
reducing federal employment by 272,900. Already, the President's plan has helped
half the nation's law enforcement agencies hire nearly 17,000 new officers.
The Brady Act
•
President Clinton supported and signed the Brady Act, an historic piece of
legislation, which requires a five-day waiting period during which all potential
purchasers are required to submit to a background check. A one-year progress
report on the Brady Act estimates that approximately 41,000 fugitives, felons and
other prohibited purchasers have been stopped from buying a handgun.
•
The President also won passage of the Brady Act Implementation Program to
upgrade state criminal history records. This will ensure that states can comply the
Act, that sales are not made to ineligible. purchasers, and that the national instant
check system can become a reality. $100 million dollars has been appropriated in
FY 1995, and another $50 million is authorized· for the next fiscal year. Already,
5 states with few or no automated criminal history records have received up to
$1 million each.
Assault Weapons Ban
•
"
The President successfully fought for the historic Assault Weapons Ban, which was
included in the Crime Bill. The law prohibits the manufacture, transfer, or
possession of semiautomatic assault weapons not lawfully possessed under federal
law on the date of enactment. The ban covers 19 military-style assault weapons,
assault weapons with specific combat features, and "copy-cat" models. The Act
specifically exempts over 600 frrearm models used for hunting and sporting
purposes.
•
6-1
�•
Stiffer Penalties for Violent Offenders
•
The President's program for imposing stiffer penalties on violent criminals was also
embodied in the Crime Bill. It:
•
Imposes the death penalty for more than 60 federal offenses, making it
available for most homicides prosecuted in federal court;
•
Makes "three strikes and you're out" the law of the land, requiring this
punishment for repeat violent offenders;
.•
-•
Authorizes $1 0 billion for new state and local prisons to house violent
criminals -- with half the funding reserved for states that work towards tough,
"truth in sentencing" guidelines.
Violence Against Women Act
•
•
Finally, the President won passage of the Violence Against Women Act as part of
the Crime Bill. The act includes four key components:
•
Safe Streets for Women -- Funding more prosecutions and police patrols to
combat sexual assaults against women, and increasing penalties for such
crimes;
•
Safe Homes for Women-- Launching programs to combat domestic violence,
and to give battered women a safe place to go;
•
Civil Rights for Women-- Giving women who are the victims of genderbased attacks the right to sue their attackers·;
•
Safe Schools for Women -- Promoting sex assault prevention on college
campuses, and making campuses safer with common-sense answers like more
and better lighting.
On March 21st, the Justice Department awarded $26 million --up to $426,000 for
each state --to bolster law enforcement, prosecution and victims' services related to
violence against women.
"
6-2
�National Police Corps
•
•
The Crime Bill also includes the Police Corps Act, setting up a national Police
Corps program which offers a maximum grant of $30,000 to each student, with an
average of $7,500 per year. Students who receive the scholarships must commit to
four years of service with their state or local police.
6-3
�. 6A. 100,000 NEW POLICE ENGAGED
IN COMMUNITY POLICING
"When I signed this crime bill, we [took] a big step toward bringing the
laws of our land back into line with the values of our people."
President Clinton
Signing of the Crime Bill
September 13, 1994
Actions to Date
President Clinton fought for and won passage of the Violent Crime and Law
Enforcement Act, the "Crime Bill," which he signed on September 13, 1994.
•
The Crime Bill will put 100,000 new police officers on our streets, funded by
savings realized through reducing federal employment by 272,900.
•
Already the program is under way: awards for more than 16,000 new police
officers have already been granted. Smaller towns are allowed to file one page
applications for their new police officers; bigger cities are being given grants to
get officers out of headquarters and back on the streets.
•
On December 19, 1994, President Clinton named a 20-year police veteran, Police
Chief Joe Brann of Heyward, California, as the Director of the Community
Oriented Policing program --the COPS program. Under Chief Brann's
leadership, plans to put the 100,000 police on our streets will be implemented
with efficiency and intelligence.
6-4
•
�Background
•
In the 1950s, there were three times the number of police as there were violent
offenses. But today, the ratio is reversed: in 1993, there were four violent crimes for each
officer.
Notwithstanding this fact, the federal government did nothing during the 1980s to
reverse these two terrible trends. In fact, in 1981, the Reagan administration cut all federal
aid to local police departments by more than 80%. While the Congress gradually upped such
aid (now known as the Byrne Grant program) over the course of the 1980s, these funds were
not used to hire more police officers. Thus, at the start of the Clinton Administration, there ·
was no federal effort in place to do anything to reverse the dramatic erosion of our effective
police strength in America's cities. Nor was there any substantial effort to expand or
promote community policing around the country.
While Washington ignored the problem, local officials did not have the same luxury.
They stretched their resources where possible to put more police on the streets, and
developed innovative ways to deploy the limited number of police on their forces. One of
the innovations, started by creative police leaders like Chief Rueben Greenberg in Columbia,
.south Carolina, and Chief Lee Brown in New York, became known as "community
policing." The idea was to have cops "walk the beat:" patrol local communities, get to know
the residents, and get involved with the neighborhood. An old-fashioned idea whose time
had come again, community policing helped prevent crimes by fmding trouble spots -- and
trouble makers-- before they got worse.
President Clinton articulated a clear vision for reversing these trends. In a speech in
March of 1992, he noted the declining ratio of police to crimes in our country, and offered a
clear answer: the federal government should put 100,000 more police on our nation's streets.
Moreover, in his speech at the Democratic National Convention in July, he linked it to
another promise: his pledge to cut the federal bureaucracy by 100,000 workers. Why not,
Clinton asked, cut 100,000 bureauc.rats in Washington, and use the savings to put 100,000
more police on the streets? The idea, which won popular support, was doubted by the cynics
who thought that as President, Clinton would never deliver on the pledge.
But President Clinton's vision did not end there. As he stressed time and again, the
. 100,000 new police would be engaged in community policing-- not stuck behind desks or in
squad cars. As a result, ~ese 100,000 new officers would represent almost a one-fifth
increase in the number of street level cops in this country.
6-5
�•
The Initiative
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.
President Clinton
State of the Union Address, 1125/94
Shortly after taking office, in March of 1993, the President had an unexpected
opportunity to launch a small beginning to his plan: he won funding in a Supplemental
Appropriations bill for a program to begin hiring 2,000 new police officers. By November,
the first round of grants -- for the first new police officers hired with federal assistance in
more than IS years --where on their way.
Winning Congressional·· passage of the larger program was more difficult, of course.
The President offered an initial plan to hire 50,000 new police officers over flve years in a
comprehensive anti-crime bill in August of 1993; it passed the House a month later. Still,
the program provided only one-half the promised officers -- and its funding was uncertain.
Following Vice President Gore's Reinventing Government report, and passage of
Congressional legislation to implement the President's recommendation that government
employnient be cut by 250,000, the opportunity to make the President's original vision a
reality reemerged. In November of 1993, Senate Democrats and Republicans jointly
approved a plan to take the savings from the 250,000 reduction in government employment
and put it in a Trust Fund to fund a comprehensive Crime Bill -- including the President's
plan to put 100,000 new community police officers on the street.
It took almost another year of wrangling to get the Bill fmally passed by Congress.
Some wanted the money shift~d to other purposes; others wanted to strip away assurances
that more police would be hired. But in the end, in September of 1994, President Clinton
signed the landmark Violent Crime and Law Enforcement Act, which embodied his pledge
to put 100,000 more police on the streets, in community policing, paid for_ by cuts in the
federal workforce over the next six years.
6-6
•
�The commitment was now law. But much work was left to be done to implement
that promise. Just one month later, the first grants of 2,800 new police officers were made.
In December of 1994, 4, 700 more police were awarded -- the program was well on its way.
Smaller towns were allowed to file one page applications for their new police officers;
bigger cities were given grants to get officers out of headquarters and back on the streets.
In February of 1995, additional awards were announced which will enable smaller cities
and towns to add 7, 100 officers.
And on December 19, 1994, President Clinton named a 20-year police veteran,
Police Chief Joe Brann of Heyward, California, as the Director of the Community Oriented
Policing program --the COPS program. Under Chief Brann's leadership, plans to put the
100,000 police on our streets will be implemented with efficiency and intelligence.
Case Study: Ocean City, Maryland
One of the first cities to win a police hiring grant from the Clinton Administration
was Ocean City, Maryland -- a small resort town with a population that ballooned during
summer months. Just a few weeks after the frrst of the three new officers given to that
town were on the job, the results were clear.
On an early July day, one of the police on patrol as a result of the grant; Officer
Bill Stamps, was on bike patrol in Ocean City. Hearing a noise, he rushed to the scene of
an assault on a young woman. The man Officer Stamps arrested in the attack turned out
to be a serial rapist, wanted in a large number of sex criines in the area.
6-7
�Case Study: Albany, Georgia
Another early winner of a police hiring grant was the mid-sized town of Albany,
Georgia. Albany, .like many smaller cities, was experiencing serious crime problems: the
emergence of gangs, a growth in youth violence, more burglaries --problems that needed
to be attacked before they got worse.
..
Albany got a police hiring grant in November 1993, and. had 12 new officers on
patrol by early the next year. Albany's new cops proved to be heroes beyond just
fighting crime. After just a few months on the job, Albany found itself with another
deluge -- the terrible 1994 floods that decimated many cities and towns in the South.
Albany's new community police officers pitched in, fighting the floods with sandbags,
and helping to save much of the small city's beleaguered downtown.
. .Jr
6-8
�68. THE BRADY ACT·
•
This is the only country, the only advanced country in the world, the only
country I know of where we would permit children access to weapons that
make them better armed than police forces. So I'll tell you what we
ought to do. I've asked the Congress to pass the Brady Bill, which would
give us a national system, a waiting period to check the backgrounds of
people for age, criminal records, and mental health before we sell them
weapons.
President Clinton
October 3, 1993
Actions to Date
After stalling for several years in Congress, the Brady Bill became law under the
leadership of President Clinton.
•
Signed by the President on November 30, 1993, the Brady Act requires a fiveday waiting period during which potential handgun purchasers are required to
submit to a background check.
•
The Brady Act also provides funding to upgrade state criminal history records.
•
$100 million dollars has been appropriated in FY 1995, and another $50 million
is authorized for the next fiscal year to upgrade and automate state criminal
history records.
...
6-9
--------------
- - - - - - - -
�Background
On March 3, 1981, during an assassination attempt against President Reagan, Press
Secretary James Brady was tragically and critically shot in the head. His arduous road to
recovery brought well wishes and support from all Americans. ·But Jim Brady and his wife
Sarah felt tha~ there was more to be won than just one man's survival, or one family's
recovery. At stake was nothing less than a national commitment to conquer the unreasonable
·
and unimaginable proliferation of violence in America. And so they set out to seek
Congressional passage of a five-day waiting period and background check for the purchase of
handguns, so that guns would not be put in the hands of criminals and mentally unstable
individuals. On February 4, 1987, Congressman Ed Feighan of Ohio introduced the Brady
Bill.
The Brady Bill became a lightning rod for organized gun lobbies and others who
opposed any meaningful anti-crime legislation. And in 1988, 1991 and 1992, the Brady Bill
could not muster enough votes for passage because of the powerful chilling effect gun lobbies
and others had on the Congress and the President.
The challenge was to build the sort of coalition required to overcome the· special
interests and obstructionists. The coalition took shape when President Clinton assumed the
mantle of leadership and announced during his campaign his commitment to a partnership
with law enforcement to "make the people of this country safer, and to make our policies
saner, and to bring us closer to the kind of country we ought to have by supporting law
enforcement, and doing the things we know will work" --such as the Brady Bill.
The President told the American people the hard facts about violence in our nation.
He made clear that it was simply unacceptable that one person is gunned down every 20
minutes by gunfrre; and that it was unacceptable that in the seven years that Sarah and Jim
Brady had fought for reform, more than 150,000 Americans had been killed with handguns,
and countless others wounded.
The coalition gained momentum when states and law enforcement began to see the
clear difference a waiting period and background check could make. Under the existing gun
control statute there were several categories of persons who were prohibited from purchasing
or owning frrearms. However, there was no way to determine whether a prospective
handgun purchaser fell within one of the prohibited categories. Sales· were made on the
honor system. By the time the Brady Bill had fmally been passed, four states who had
already enacted versions of the Bill, had in four years, prevented some 50,000 people from
buying a handgun because they were legally forbidden to purchase such weapons.
6-10
•
�•
Congress finally passed, and the President triumphantly signed into law the Brady Bill
on November 30, 1993. Efforts were already underway to improve the Act by upgrading the
criminal history record keeping systems and expanding the categories of persons prohibited
from possessing firearms to include those convicted of domestic violence or subject to a
restraining order for alleged acts of domestic violence. This was accomplished in the 1994
Violent Crime Control and Law Enforcement Act.
The Initiative
The Brady Law, an historic piece of legislation, requires a five-day waiting period
during which potential hand gun purchasers are required to submit to a background check.
And it works. A recently-completed Bureau of Alcohol, Tobacco and Firearms' ("ATF")
survey of 30 law enforcement authorities reveals that from March 1994 through
January 1995, more than 15,500 persons in the surveyed jurisdictions who applied to
purchase handguns had their applications denied. The officials polled constitute a cross
section of the national law enforcement scene. Drawn from every region of the country,
they represent communities large and small, rural and urban.
The "bad guys" blocked by the Brady Act from obtaining handguns included:
•
•
4,365 convicted felons;
• ·
945 fugitives;
•
97 persons under indictment;
•
649 illegal drug users;
•
~ojuveniles;
•
63 persons under restraining order for alleged· stalking, harassment or other
forms of domestic threats or intimidation.
and
The more than 15,500 Brady applications denied represent only 3.5 percent of the
total number of applications submitted in the surveyed jurisdictions (more than 440,000).
Further, ATF has confirmed through discussions with the firearms industry that the overall
volume of handgun sales remained relatively constant during that time. This suggests that
the Brady Law is doing what it was designed to do -- keeping handguns out of the reach
of that small percentage of persons who use handguns criminally, while not unduly
6-11
�infringing on the rights of legitimate handgun owners.
..
·National estimates of the number of prohibited persons who were prevented by the
Brady Act from purchasing a handgun in states affected -- based on information supplied by
the FBI's.criminal history data base was approximately 41,000 from March 1, 1994
through January 31, 1995. This estimate was corroborated generally by a CBS News public
polling unit which estimated that more than 44,000, or approximately two percent, of the
applications to purchase handguns submitted during the one year period following the Brady
Law's effective date were denied.
The Brady Law also provided funding to upgrade state criminal history records.
This will ensure that states can comply with Brady, that sale·s are not made to ineligible
purchasers, and that the national instant check. system can become a reality. $100 million
dollars has been appropriated in FY 1995, and another $50 million is authorized for the next
fiscal year.
This grant program gives preference to states with the lowest level of automated
complete records. The reality is that under half of all states have fully automated records
systems, and four state systems are not even partially automated. The success of the Brady
La:w and other crime fighting provisions such as the "Three Strikes" law depend upon quick
access to criminal history records.
Guidelines have been published and states may now apply for these grants and for the
National Criminal History Improvement Program (NCHIP), which will help states speed up
their connections with the FBI's National Instant Criminal Backgrotind Check System. This
· will permit firearm dealers to obtain immediate information about potential handgun
purchasers to see if they are disqualified by law. Already, 5 states with few or no automated
criminal history records have received up to $1 million each.
The categories to limit those eligible to purchase a handgun under the Brady Law
have also been expanded to include persons under restraining orders stemming from domestic
abuse situations.
..
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�•
Case Studies: Prairie Village, Kansas and San Antonio, Texas
In March 1994, the Brady Law prevented an accused stalker in Prairie Village,
Kansas, from purchasing a handgun. The attempted handgun purchase was stopped by
the Prairie Village Police Department when a Brady background check revealed that the
prospective purchaser, who was the subject of a restraining order for allegedly stalking
his wife and threatening to kill her, was a resident of Missouri, not Kansas, as he had
represented in his Brady form.
In April 1994, a suspected drug dealer was arrested in 8@.11 Antonio, Texas after a
Brady background check performed by the Uvalde County Sheriffs Office indicated
that the alleged dealer was the subject of outstanding warrants for possession of cocaine
with intent to distribute, possession of heroin with intent to distribute and failure to
appear in court.
•
..
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�6C.ASSAULTWEAPONS BAN
Hunters· must always be free to hunt. Law-abiding adults should always
be free to own guns and protect. their homes. I respect that part of our
culture; I grew up on it. But I want to ask the sportsmen and others who
lawfully own guns to join us in this campa.ign to reduce gun violence. I
say to you, I know you didn't create this problem, but we need your help
to solve it. There is no sporting purpose on Earth thqt should stop the
United States Congress from banishing assault weapons that out-gun
police and cut down children.
President Clinton
State of the Union Address, 1125/94
.Actions to Date
President ·Clinton fought for and won passage of the Violent Crime Control and
Law Enforcement Act, the "Crime Bill," which he signed on September 13, 1994.
Included in the Crime Bill, the Assault Weapons Ban:
•
prohibits the manufacture, transfer, or possession of semiautomatic assault
weapons and large capacity feeding devices not lawfully possessed under federal
law on the date of enactment;
•
covers 19 military-style assault weapons, assault weapons with specific combat
features, and "copy-cat" models; and
•
specifically exempts over 600 frrearm models used for hunting and sporting
purposes.
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•
�•
Background
America enjoys a rich tradition of sportsmanship and appreciation for the great
outdoors. Part of that tradition includes the freedom to enjoy hunting and gaming at parks
and reserves throughout the country. President Clinton, like so many Americans, has
memories from his boyhood of taking his first shot at a can on a fencepost and learning the
responsible way to use hunting and recreational weapons.
Before the Assault Weapons Ban, however, highly-dangerous weapons with no
legitimate civilian use were available to the public. Along with hunting rifles, gun dealers
sold uzis, street sweepers, and other assault weapons designed for rapid fire, close quarter
shooting of human targets. Because of their inaccuracy, assault weapons are of no value
for hunting or target practice. Their firepower and military features, though, make them of
great value to criminals. Assault weapons represent only one percent of privately owned
firearms in this country, yet account for eight percent of firearms traced to crime.
Assault weapons, then, pose a grave threat to. public safety. Police risk being
outgunned and citizens face exposure to the random spray of gunfire in America's streets.
On January 17, 1989, a deranged man wandered into a school yard in Stockton,
California and opened fire with an AK-47. In just a matter of seconds Patrick Purdy had
killed five children and wounded 29 others. This horrific event galvanized public opinion
and inspired action. In 1989 Congress banned the importation of semiautomatic assault
weapons.
Yet, the law did not effect American-made assault style weapons or copy cat
versions of the foreign models. And soon after the imposition of the ban, the status quo
returned, with law makers unable to overcome the gun lobby and advance the effort to get
assault weapons off the gun store shelves and streets of America. A House Bill in 1991 to
ban assault weapons was defeated by a 70 vote margin, even though 70 percent of
Americans indicated they were in favor of gun control.
President Clinton stated unequivocally during the 1992 campaign that lie favored an
assault weapons ban. "We ought not to have assault weapons whose only purpose is to kill
... when the police don't have a chance.. It's wrong ... And it's time we took the side of
people in law enforcement." {»resident Clinton drew upon the unified support of law
enforcement. He knew full well that it was wrong to ask them to risk their lives in the
fight against crime -- and then deny them the help they need .
•
6-15
�The Initiative
.
The Violent Crime Control and Law Enforcement Act, signed into law by President
Clinton in September 1994, prohibits the manufacture, transfer, and possession of
semiautomatic assault weapons not lawfully possessed under federal law on the date of
enactment. The ban covers 19 named assault weapons, copies and duplicates of such
weapons, and semiautomatic rifles, semiautomatic pistols, and semiautomatic shotguns with
specified features. The Act specifically exempts over 600 firearm models used for hunting
and sporting purposes.
The Act also prohibits the transfer or possession of large capacity ammunition feeding
devices not lawfully possessed on the date of enactment. Such devices are defmed to include
a magazine, feed strip, or similar device that can accept more than 10 rounds of ammunition
or can be readily restored or converted to accept more than 10 rounds.
The ban on both semiautomatic assault weapons and large capacity ammunition
feeding devices is subject to a sunset provision that will cause its repeal in ten years. In
addition, semiautomatic assault weapons and large· capacity ammunition feeding devices
lawfully possessed on the date of enactment may be lawfully transferred to another
individual.
Case Study: Stephen Sposato
In July 1993, a man entered a doWntown San Francisco office building, and went
to the 34th floor law offices of Pettit & Martin. He was carrying two 9mm lntratec
TEC-9 pistols, a .45 caliber semiautomatic handgun and hundreds of rounds of
ammunition. Gunman Gian Luigi Ferri, apparently motivated by a disagreement with the
fu:ril, opened fire randomly shooting at employees, and murdered eight j>eople. One
victim was Jodie Sposato, wife of Steven and mother of 10-month-old Meghan.
In the wake of this inexpressible tragedy, Steven Sposato channeled his own
personal loss and worked tirelessly to fight for a ban on the type of weapon that had
taken the life of his wife. "Murders like this could have been prevented," said Steven
Sposato; last August in Washington. "The killer had no prior record. His fU'St crime
was his last crime, and then he killed himself... In 1991, if Congress had passed an
assault weapons ban, this terrible tragedy would have been prevented."
"
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�•
•
60. STIFF PENALTIES FOR VIOLENT OFFENDERS
"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, and put away for
good Three strikes and you are out. "
President Clinton
State of tqe Union Address, 1/25/94
Actions to Date
President Clinton fought for and won passage of the Violent Crime and Law
Enforcement Act, the "Crime Bill," which he signed on September 13, 1994. The
President's program for imposing stiffer penalties on violent criminals was embodied in
his anti-crime legislation which:
•
•
imposes the death penalty for more than 60 federal offenses, making it available
for most homicides prosecuted in federal court;
•
makes "three strikes and you're out" the law of the land, requiring this
punishment for repeat violent offenders; and
•
authorizes $1 0 billion for new stafe and local prisons to house violent criminals - with half the funding reserved for states that work towards tough, "truth in
sentencing" guidelines.
•
6-17 .
�Background
While a wide variety of tools are needed to combat crime-- more police, more
prevention programs, more efforts to help young people before they become violent -- stiff
punishments for violent offenders is a vital part of the solution.
.
•
Over twenty years ago, the U.S. Supreme Court struck down the ultimate penalty-the death penalty -- as then-existing under ·state and federal law. While most states
responded with modified death penalty laws to permit them to reinstitute 'that penalty,
Congress was unable to reach agreement on any such legislation.
Even many state criminal justice systems with a death penalty found themselves faced
with the "revolving door" syndrome: violent criminals sentenced to apparently long terms,
only to be let back out again -- and only to commit more crimes once released. Complex
and ambiguous sentencing schemes accounted for some of this; a lack of adequate prison
space was another factor.
As a former Attorney General, President Clinton knew how important stiff
punishments for violent offenders are, as part of a comprehensive attack on this critical
problem. And President Clinton had authoriZed the imposition of the death penalty in four
cases during his tenure as Governor of Arkansas.
Consequently, President Clinton endorsed a renewed federal death penalty as part of a
comprehensive anti-crime package. He also backed additional, stiff penalties for violent
criminals.
Another part of this plan came into focus when, in 1993, a young girl named Polly
Klass was kidnapped from her home in California, and killed by a repeat violent offender
who had been released. The Klass family vowed to make sure such incidents would not be
repeated, and Polly's father, Mark Klass, led a movement in California to pass the nation's
first "three strikes and you're out" law-- a law to insure that three-time violent offenders
serve real life in prison.
President Clinton met with Mark Klass in December of ·1993, and the next month, in
his State of the Union address, called on Congress to pass a federal version of that law.
Early in February of 1994, the. President submitted a legislative proposal to make "three
strikes and you're out" the law of the land.
President Clinton fought hard to end 20 years of inaction, and six years of gridlock,
to get the federal death penalty reinstated. Though four Presidents-- Nixon, Ford, Reagan,
and Bush -- had proposed legisl~tion to have a federal death penalty, none had been able to
. 6-18
•
�..
win passage of that legislation by the Congress .
The Initiative
The }:>resident's program for imposing stiffer penalties on violent criminals was
embodied in his anti-crime legislation, that he fought hard to get passed by the Congress. As
signed by the President in September 1994, this Violent Crime Bill:
Imposed the death penalty for more than 60 federal offenses, making it available for
most homicides prosecuted in federal court;
Made "three strikes and you're out" the law of.the land, requiring this punishment
for repeat violent offenders;
•
Authorized $10 billion for new state and local prisons to house violent criminals -with half the funding reserved for states that have tough, "truth in.sentencing"
guidelines.
Taken as a whole, the Crime Bill signed by the President in September contains the
toughest package of penalties for violent offenders in our nation's history .
•
•
6-19
�6E. VIOLENCE AGAINST WOMEN
.
Actions to Date
President Clinton fought for and won passage of the Violent Crime Control and
Law Enforcement Act, the "Crime Bill," which he signed on September 13, 1994..
Included as part of the Crime Bill, the Violence Against Women Act includes four key
components:
•
Safe Streets for Women -- Funding more prosecutions and police patrols to
combat sexual assaults against women -- and increasing penalties for such
crimes;
•
Safe Homes for Women -- Launching programs to combat domestic violence,
and to give battered women a safe place to go;
•
Civil Rights for Women --Giving women who are the victims of gender-based
attacks the right to sue their attackers;
•
Safe Schools for Women --Promoting sex assault prevention on college
campuses, and making campuses safer with common-sense answers like more
and better lighting.
Background
Since 1970, an unheralded but dramatic trend in American society has been a sharp
increase in violent crimes against women. Violent crimes· against women have risen at four
times the rate of increase of such crimes against men -- an increase fueled by growing rates
of sexual assault and domestic violence.
During the 1980s, ·an increasing number of women said "enough is enough." On
college campuses around the country, "Take Back the Night" rallies were held to demand
an end to the violence against women, and to demand action. Local governments formed
special sex crimes prosecution units; others tackled the problem of domestic violence with
special training for police and pro-arrest policies in such cases.
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•
.If
�..
Still, the toll of these crimes continued to mount. Highly publicized instances of
stalking of women, assaults against women, and even misogynistic slayings of women
spurred some action -- but no comprehensive response.
Domestic violence, too, was escalating. Many women found that they were stuck in
abusive homes because they had nowhere to go -- America had three animal shelters for
each one battered women's shelter. Fewer than 10 cities had specialized domestic violence
prosecution units.
On college campuses, a 1988 study found that rape was the number one reason that
freshmen women dropped out of college not to return. And in the workplace, a 1990 study
found that homicide was the number one cause of death among women on the job.
As usual, Washington was sluggish to respond. The Reagan and Bush Justice
Departments offered little or nothing in the way of reaction to these· developments.
In 1990, Senator Joseph Biden and then-Representative Barbara Boxer proposed the
first "Violence Against Women" Act. Despite broad, bi-partisan support for the legislation,
President Bush refused to endorse the bill. As a result, the bill languished for more than
·two years.
By contrast, President Clinton endorsed the Violence Against Women Act, and
pledged to sign it as President. In August of 1993, President Clinton called on Congress to
include the Act in any Crime Bill it passed -- and continued to speak out for this important
law.
·
The Initiative
Finally in August of 1994, Congress passed an administration backed proposal that
contained elements drafted by Senator Biden, Senator Dole, and the )ustice Department.
The President signed the legislation as part of the Violent Crime Control and Law
Enforcement Act in September 1994.
•
•
The Violence Against Women Act includes four key components originally included
in the Biden-Boxer proposal:
•
Safe Streets for Women -- Funding more prosecutions and police patrols to combat
sexual assaults against women -- and increasing penalties for such crimes;
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�•
Safe Homes for Women -- Launching programs to combat domestic violence, and to
give battered women a safe place to go;
•
Civil Rights for Women -- Giving women who are the victims of gender-based
attacks the right to sue their attackers;
•
Safe Schools for Women -- Promoting sex assault prevention on college campuses,
and m~g campuses safer with common-sense answers like more and better
"lighting.
In addition, the Act includes provisions, that will insure HIV -testing of accused
rapiSts and permit expanded use of prior crimes evidence against sex criminals.
On March 21, 1995, the Justice Department awarded $26 million --or up to
$426,000 for each state -- to bolster law enforcement, prosecution, and victims' services
related to violence against women.
..
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�6F. NATIONAL POLICE CORPS
•
.
"In our toughest neighborhoods, on our meanest streets, in our poorest
rural areas, we have seen a stunning and simultaneous breakdown of
community, family, and work, the heart and soul of civilized society. This
has created a vast vacuum which has been filled by violence and drugs and
gangs. So I ask you to remember that even as we say 'no' to crime, we
must give people, especially our young people, something to say 'yes' to. "
President Clinton
State of the Union Address, 1125/94
Actions to Date
President Clinton fought for and won passage of the Violent Crime and Law
Enforcement Act, the "Crime Bill," which he signed on September 13, 1994. Included
in the Crime Bill, the Police Corps Act:
•
•
offers a maximum grant of $30,000 to each student in the Police Corps Program,
for an average of $7,500 per year;
•
grants each state or locality that employs members of the Police Corps $10,000 .
each year per hire for the life of the grant to help defray the cost of the new
·
officers; and
•
includes $20 million per year in funding due to begin in FY 1996 and to
continue for the following five years.
Background
The idea for a National Police Corps existed for many years and enjoyed broad
bipartisan support, but it was not until President Clinton pushed the proposal to the front of
the national agenda that its legislative fate resulted in law. Over ten years ago, a former
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�aide to Robert Kennedy first proposed the idea for a Police Corps, drawing upon the same
motivations that created the Reserve Officers Training Corps (ROTC). There was and is a·
burning desire among young Americans to contribute to their country while, at the same
time, improving their lives through higher education.
..
The need for an increasing number of smart, tough law enforcement officers has
never been greater.
President Clinton embraced this proposal when he was still Governor of Arkansas.
The idea was first expressed by him in his bid for reelection in 1990, and, in 1992,
Arkansas awarded the first scholarships under its newly created State Police Corps.
The President has said many times that the American people do not only expect our
police officers to shoot straight, but to think straight, too. This philosophy is also in
keeping with President Clinton's long held belief that the key to America's future lies in
the education and well-being of young Americans. It was -in that spirit that he proposed the
revamping of the student loan program and the establishment of AmeriCorps, in which
young Americans serve their country in return for a college education.
This same commitment to encollraging public service and creating a highly educated
and highly motivated generation of Americans is what prompted the President to identify
the National Police Corps as a means of offering college scholarships if students serve as
police officers in their communities. In addition to the obvious benefit of education, this
program helps to facilitate the promise of 100,000 police officers on the streets of America, ·
and communities benefit from the increased police presence in their neighborhoods.
The Initiative
On August 11, 1993, the President announced the parameters of a comprehensive
anti-crime package that included the Police Corps Program. The Police Corps Act offers a
maximum of $30,000 to each student, with an average of $7,500 per year. Those states and
localities that employ members of the Police Corps will receive, for the life of the grant,
$10,000 each year per hire to help defray the cost Of the new officers.
Just over a year later, Congress passed -- and President Clinton signed -- the Police
Corps Act (as part of the Omnibus Violent Crime and Control Act). Funding is due to
begin in FY 1996, with $20 million designated for each of the next five years.
6-24
•
�•
In return for the scholarship money, the Police Corp student must complete, in good
standing, an undergraduate course or receive credit for one or more graduate courses. The
s~dent must also complete 16 weeks of a rigorous Feqeral law enforcement training
program. And, upon receipt of an undergraduate degree, the student must commit to four
years of ser-Vice on his state or local police force. The Police Corps will develop a new
group of well-educated police officers annually available for recruitment by police
departments across the country .
•
6-25
�7. COMMUNITY EMPOWERMENT
Ill
Introduction
...
"For a long time the government really thought that if we just had
a solution designed here in Washington that was properly funded,
we could solve the problems of every community in the country.
Well, we learned that that wasn't true. But we've also learned ...
that neglect is not a very good policy either. {There] needs to be
a new partnership between Washington and the communities and
the individuals of this country, and there needs to be a way of
doing business in which' we try to create the conditions in which
people can seize opportunities for themselves. "
President Clinton
January 17, 1994
Remarks on Empowerment Zones
and Enterprise Communities
Empowerment Zones and Enterprise, Communities
•
•
In 1993, President Clinton's Empowerment Zones and Enterprise Communities
("EZIEC") legislation passed Congress, offering $2.5 billion in tax incentives and $1
billion in-flexible block grants to more than 100 communities. The initiative is
designed to create jobs and help communities to rebuild themselves from the inside
out.
•
526 communities around the country engaged in long planning processes and
submitted EZIEC applications to the Administration.
•
After a lengthy and thorough review process, on December 21, 1994, President
Clinton and Vice President Gore announced nine EZs and two supplemental urban
zones, along with the 95 ECs, four of which received enhanced grants.
The Community Development Banking and Financial Institutions Act
•
In 1994, the President's Community Development Banking and Financial Institutions
Act became law, the ftrst step to fulfilling his pledge to create a national network of
community development financial institutions (CDFis). In 1995, Congress
7-1
�appropriated $125 million for the initiative, and the Administration has requested an
additional $375 million over the next four years.
•
The Act creates a fund to provide equity investments, deposits, grants, loans,
technical and training assistance to CDFis that are starting lip or expanding.
•
When fully leveraged, the Act could create about $2 billion in new investments by
homeowners, businesspeople and others who are building up low- and moderateincome communities.
•
The Act will provide as many as 40,000 loans to entrepreneurs,· expanding
businesses, homeowners, and others who might not otherwise be able to obtain
credit.
..
•
...
7-2
�•
7A. EMPOWERMENT ZONES AND ENTERPRISE
COMMUNITIES
"I do not believe we can repair the. basic fabric of society until people
who are willing to work have work. Work organizes life. It gives
structure and discipline to life. It gives a role model to children.... We
cannot ... repair the American community and restore the American
family until we provide the structure, the value, the discipline and the
rewar,d that work gives. "
President Clinton
November 13, 1993
Memphis, Tennessee
0
•
...
7-3
�Actions to Date
In 1993, President Clinton persuaded Congress to approve his Empowerment
Zones and Enterprise Communities legislation, realizing his pledge to help revitalize
distressed urban and rural communities across America. The legislation called for the
designation of 9 Empowerment Zones (EZs) and 95 Enterprise Communities (ECs),
which will receive $2.5 billion in tax incentives and $1 billion in flexible block grants.
0
•
To assist in the implementation of the EZ/EC initiative, the President signed on
September 9, 1993, a memorandum establishing the Community Empowerment
Board, which is _chaired by the Vice President and comprised of the heads of 15
federal agencies.
•
In January of 1994, applications were sent out to communities interested in
applying for designation as an EZ or EC. Within six months, 526 places from
across the country had submitted EZ/EC applications to the Administration.
•
After a lengthy and thorough review process, on December 21, 1994, President
Clinton and Vice President Gore announced nine EZs and two supplemenW
urban zones, along with the 95 ECs, four of which received enhanced grants.
Urban Empowerment Zones: Atlanta, GA; Baltimore, MD; Chicago, IL;
Detroit, MI; New York, NY; and Philadelphia PA/Camden NJ.
Urban Supplemental Zones: Los Angeles, CA; and Cleveland, OH.
Rural Empowerment Zones: Kentucky Highlands; Mid-Delta Mississippi; and
Rio Grande Valley Texas.
Urban Enhanced Enterprise Communities: Boston, MA; Houston, TX; Kansas
City KS/Kansas City MO; and Oakland, CA.
7-4
�*'
Background
"While the great battles of the decades ahead are likely to be economic, the greatest
challenge to our economic strength is certainly not competition from the Pacific Rim
or Europe. No; the greatest challenge to our economic strength is here at home -where the decaying cores of too many inner-cities and the poverty-stricken
heartlands of rural America threaten to erode our dynamic regional economies from
within. That is what we intend to change. I believe we can do it. "
Vice President Al Gore
December 6, 1993
Boston, Massachusetts
Many American communities today badly need to renew themselves. As traditional
·industries have shut down and emerging flrms have lo~ated in suburbs, crime and drugs
have replaced jobs and hope in many of America's cities. For rural areas with inadequate
electricity or sewage, the reality of poverty has changed little in the past generation. Child
care may be available for some children and job training for some adults, but services are
seldom coordinated to meet neighborhoods' specific needs. Communities with powerful
resources in their schools and religious institutions may not fully use them. In areas where
citizens working together could create jobs and renew hope, individuals on their own aren't
able to make the most of themselves.
·
The concept of Enterprise Zones first originated in Britain in the late 1970s as a
free-market approach to urban revitalization to allow· entrepreneurs in targeted areas to
pursue proflt with minimum governmental restrictions. Evaluations of the British enterprise
zone combination of tax incentives and regulatory relief found it to be a slightly helpful but
not decisive tool for distressed communities. The lesson for the Clinton Administration
was that free-market incentives standing .by themselves could not revitalize distressed urban
communities.
•
..
The experience of state enterprise zones in America reinforced this lesson. During
the 1980s, many states initiated their own enterprise zone programs. By 1993, 37 states
had enterprise zone legislation in place, producing more than 3000 zones across the
country. The number of zones in each state range from one in Michigan to 1,553 in
Louisiana, with some states designating entire counties and others having zones as small as
50 acres. The results with state enterprise zones have been mixed as well. The most
successful state zone programs required strong development potential in the targeted areas,
public/private cooperation and the availability of other development tools beyond tax
incentives. Local managers of state enterprise zones found that the power of the zone
concept lay not in the tax incentives, but in the usefulness of zones as a catalyst for
7-5
�attracting a wide variety of tools and commitments to support growth in a targeted area.
The Clinton Administration developed its EZ legislation with these lessons in mind.
Prior to enactment. of the Clinton EZ bill, Congress had debated enterprise zones bills
annually since 1982. The Clinton bill was the first federal enterprise zone bill with tax
incentives to become law.
The Initiative
Thirteen years after the first federal enterprise zone legislation was introduced,
President Clinton signed Empowerment Zone legislation that included $2.5 billion in tax
incentives and $1 billion in flexible block grants that would spur local communities to
address barriers to economic growth beyond tax costs -- such as crime and worker skills.
The Clinton Administration embraced empowerment zones ·as a catalyst and
framework for bringing new and existing resources and partnerships into a new partnership
in support of a common vision for change in each community. To be selected under the
Clinton EZ program, communities had to submit a strategic plan for revitalization of their
targeted area developed with participation of the entire community. Community residents,
private and non-profit sectors, schools and universities, churches and local and state
government were asked to participate.
Recognizing that ali of these partners have assets to offer, the application required
communities to think comprehensively. How could their fragmented economic, human and
physical development resources be coordinated and integrated to support common goals for
economic growth and job creation? Rather than addressing a laundry list of concerns,
applicants had to develop a vision of what their community could become -- for example, a
center for emerging technologies or an export center for farm products -- if they built upon
the unique assets already in place. . The communities also had to set goals and benchmarks
for how they would achieve this vision and measure progress toward their goals.
To enhance federal agency commitment and responsiveness to community needs, on
September 1993, the President used his executive powers to create the Community
Empowerment Board with Vice President Gore as chair.
The Board has worked to identify additional ·resources available for community
revitalization and to grant waivers to help communities achieve their vision. Given the cost
of the initiative, the Administration also focused the experiment on a limited number of
7-6
•
�·•
places. Nine empowerment zones (six urban and three rural) receive the bulk of the tax
incentives as well as block grants of $100 million and $40 million each, respectively. A
second tier of communities -- 95 Enterprise Communities --receive tax-exempt fmancing
for certain zone activities and block grants of approximately $3 million. In addition to
these benefits, EZ and EC designees receive priority consideration for existing federal
programs and special assistance in removing bureaucratic red tape, regulatory and statutory
barriers that prevent innovative uses of existing federal. dollars.
Summary of Benefits
Empowerment Zones. The 9 EZs will each receive the following benefits:
•
•
•
•
•
Social Services Block Grant. Social services block grants of between $40
million and $100 million.
Wage Credits. To encourage hiring, businesses located in an EZ will receive a
wage credit of up to $3000 per year per employee for the cost of wages and
training for employees who are zone residents.
Tax Deductions for Capital Investments. To encourage capital investment,
smaller zone businesses can claim extra expensing tax deductions for the cost of
plant and equipment.
·
Tax-Exempt Bond Financing. Access to tax-exempt bond financing for certain
private· business activiti~s in the targeted conununities.
Federal Partnership. Priority consideration. for existing federal programs and
special assistance in removing bureaucratic red tape, regulatory and statutory
barriers that prevent innovative uses of existing federal dollars.
Enterprise Communities. The 95 ECs will receive:
•
•
•
•
Social Services Block Grant. Social Services block grants of approximately
$3 million.
Tax-Exempt Bond Financing. Access to tax-exempt bond fmancing for certain
private business activities in the targeted communities.
Federal Partnership. Priority consideration for existing federal programs and
special assistance in removing bureaucratic red tape, regulatory and statutory
barriers that prevent innovative uses of existing federal dollars .
Supplemental Zones and Enhanced ECs. These. communities will receive additional
economic development grants ranging from $22 to $125 million.
7-7
�Communities had six months to develop their strategic plans. By June 30, 1994 -the application deadline -- over 500 places from across the country submitted EZIEC
applications to the Administration. An interagency review team of over 100 federal
executives from the agencies of the Community Empowerment Board thoroughly analyzed
the applications. Using the results of this review process, Secretary Cisneros of the
Department of Housing and Urban Development selected the urban EZIECs and Secretary
Espy of the Department of Agriculture selected the rural EZ!ECs.
.
The Qverwhelming majority of applicants reported that the six-month planning
process forged unprecedented strategies and partnerships for community renewal that ~ade
all the applicants winners, whether or not they were designated. The effort brought
together diverse groups which had rarely cooperated in the past. Many communities have
for the flrst time developed a "holistic" approach to economic revitalization which
encompasses both capital formation strategies and the provision of social services such a5
child care, job training, education and health care. And new public-private partnerships will
be a force for change far into the future. A few examples of the commitments from the ·
EZIEC initiative:
•
In Detroit, more than $2 billion in private sector commitments have been pledged.
Major automobile companies will train and hire EZ residents. Growing industries
will locate and expand in the Detroit zone. Banks will invest more than $1 billion
in homeownership and small businesses in the zone. Lawyers and accountants will
donate their services to start-up businesses locating in the zone.
•
Baltimore's plan leverages $8 in outside resources for every $1 of federal funds.
Six local banks have committed over $50 million for a variety of business and
residential loans to the targeted· zone. Seven foundations have committed 1% of the
value of their assets for each of the next 5 years for activities within the zone.
•
In Boston, seven banks have committed $5 million each for commercial lending in
the proposed zone and will provide $625,000 for minority and small business
technical assistance. Boston Edison will offer deep utility discounts to new
businesses that commit to employ zone residents.
•
In Kentucky, the Kentucky Highlands Investment Corporation has attracted
$33 million in commitments from state and local banks to create the Development
Venture· Capital fund and $11 million from local banks for free-range chicken
farming.
•
...
7-8
�Case Study:
Detroit, Michigan
.
The Philadelphia Inquirer highlights the success of.the application process in Detroit:
"Some places seem to truly grasp the spirit and potential of the new deal the feds are
offering. Consider the example of America's most ravished great city, in the nation's
most segregated region -- Detroit. With the bait of empowerment zone designation, and
anxious to bolster freshmen Mayor Dennis Archer, the big institutions of the Detroit
region have produced startling set of initiatives.
a
"A consortium of lead universities -- Wayne State, Michigan State and the University of
Michigan -- have agreed to focus resources of multiple departments, including their
schools of business development, urban studies and architecture, on Detroit's zone, and
to keep up the effort whether Detroit 'wins' in the competition or not.
"Detroit Renaissance -- the chief executives of the region's 50 largest business,
including GM, Chrysler and Ford-- are launching a community development bank
somewhat akin to Chicago's famed South 'Shore Bank, aiming for almost $50 million in
capitalization.... Just a dozen or two cities emulating Detroit's verve in building new
coalitions to combat poverty and inner-city depression would justify the whole effort."
Neil Pierce, "The Cities Are Lining Up to Get Empowerment Zones," Philadelphia
Inquirer. May 16, 1994.
•
. 7-9
�Case Study:
Mid-Delta, Mississippi
In the Mississippi River Delta region, where people struggle with average wages of only
$7000 per year, an inspiring alliance between the black and white communities was
formed to develop a strategy to revitalize some of the most distressed areas in
Mississippi. The Delta Council, a century-old association of large landowners, worked
jointly for the first time with the Delta Foundation, a successful community
development organization born of the civil rights movement. The two groups set up a
steering committee that includes a wide spectrum of community-based organizations,
planning and development districts, local and regional development groups, businesses
and the banking industry. Formed out of this partnership, the Mid-Delta Empowerment
Zone Alliance worked hand in hand with citizens, elected officials, local, state, and
federal agencies to create a new vision for this portion of the Mississippi Delta.
•
The Alliance set a goal of making the existing fmancial· infrastructure work in attacking
poverty by creating jobs for zone residents. The strategy is to build on existing
community resources -- such as river ports, railroads, fmancial and other institutions -that can support business and entrepreneurship and maximize available resources
affecting the quality of life for zone residents. Efforts will be made to preserve
agriculture as a significant element of the local economy by exploiting opportunities for
local processing of agricultural products. The Alliance, which will manage the ·
implementation of the strategic plan, attracted almost $136 million in cash, credit and
in-kind services committed to.the Zone over a ten year period. Local colleges and
universities will contribute over $200,000 toward operating a One Stop Capital Shop, a
center for loans and technical assistance for small businesses that will include a mobile
unit to "circuit ride" the area of Northwest Mississippi. The State of Mississippi will
commit $5 million for the construction of an adult vocational-technical training facility,
which will be matched with $5 million from the local .Chamber of Commerce. With the
Alliance providing forums for continued coordination of existing assets and continuing
input from zone residents, the process of renewal has already begun in the Mid-Delta
reg1on.
•
7-10
�...
78. CREATING A NATIONWIDE NETWORK OF
COMMUNITY DEVELOPMENT BANKS AND
FINANCIAL INSTITUTIONS
"! 've long admired the way [Community Development Financial Institutions}
steered private investment into previously underprivileged neighborhoods, to
previously undercapitalized and underutilized Americans, proving that a bank
can be a remarkable source of hope and still make money in the free enterprise
system."
President Clinton
September 23, 1994
Signing the Riegle Community Development
and Regulatory Improvement Act of 1994
•
•
7-11
�Actions to Date
In 1994, the President's Community Development Banking and Financial Institutions
Act ("CDBFI Act") became law, the first step to fulfilling his pledge to create a national
network of community development financial institutions. Banks and community
development financial institutions have a primary mission of providing loans and basic
banking services in low and moderate income communities.
-.
With $125 million already appropriated for 1995, and $500 million requested in the
President's Budget over four years, the Act:
•·
provides financial and other assistance to create and expand new and existing
Community Development Financial Institutions ("CDFis") across the country.
•
provides financial incentives to traditional insured depository· initiatives to
increase lending and other financial services to distressed communities and to
"·make investments in CDFis.
•
creates the CDFI Fund, which will provide equity investments, deposits, grants,
loans, and technical and training assistance to CDFis that qualify for funding;
and will administer the incentive program for traditional lenders.
•
will, when fully leveraged, create about $5 billion in new investments in low and
moderate income communities.
•
will provide as many as 40,000 loans to entrepreneurs, expanding businesses,
homeowners, and others who might not otherwise be able to obtain credit.
Background
Across the country, many rural and lirban communities are starved for affordable
loans, investment capital, and basic banking services. Millions of Americans in low- and
moderate-income neighborhoods have no bank where they can cash a check, borrow money
to buy a home, or get a small loan to start a business or keep one going. They live in
neighborhoods with no ATM machines and no bank branches. Instead, they are forced to
deal with cash-checking operations that charge exorbitant fees for simple services.
Most commercial lenders shun low-income communities because small loans have
7-12
•
•
�•
lower profit margins. Profitable lending in low-income communities can also require
specialized expertise, credit products and loan counseling. In addition, studies suggest that
racial ·discrimination leads some lenders ·to avoid doing business in minority areas .
As a result, in too many low- and moderate-income neighborhoods, loans are
unavailable for even the most credit-worthy housing and business purposes. A recent study
found $360 million in unmet demand for credit-worthy smail business loans in Oakland
alone. In New York City's distressed communities, individuals and institutions with several
billion dollars in demand for housing loans that would qualify for federal insurance could
not fmd lenders. Economic revitalization cannot take root in communities where good risks
and sound businesses cannot get loans.
In a few fortunate low and moderate income communities, comprehensive
development institutions like the South Shore Bank of Chicago, and the Elkhorn Bank in
Arkansas, have developed successful, for-profit and not-for-profit affiliates that meet acute
borrowing, banking and counseling needs. In addition, they develop affordable housing and
commercial space for small businesses in their communities. Following the pioneering
work of the Grameen Bank of Bangladesh, these institutions are based on a simple idea.
Low- and moderate-income people will build their future and pay back loans on a timely
basis if given the counseling and small loans they need to get ahead.
In addition to the few comprehensive community development banks and credit
unions in the country, many enterprising communities have created a variety of promising
alternatives to provide credit in underserved communities. Community development credit
unions --financial cooperatives owned and operated by low-income people --provide
banking services and small loans to their members. Hundreds of community development
corporations and loan funds, while not taking deposits, focus on providing equity, bridge
loans, or below-market fmancing for affordable housing, revitalization of retail stores and
small businesses in low-income communities.
Passage of the "Community Development Banking and Financial Institutions Act of
1994" fulfills the President's commitment to build on these efforts by supporting the
creation of a network of community development fmancial institutions.
7-13
�The Initiative
"This bill is not about bureaucracies [or] distributing handouts. It's about new
opportunity for people to assume responsibility to make good lives for themselves by
making the private sector work in places where it had not gone before. "
President Clinton
September 23, 1994
Signing the Riegle Community Development
and Regulatory Improvement Act of 1994
Signed by President Clinton, the Community Development Banking and Financial ·
Institutions Act· creates a Community Developm,ent Financial Institutions Fund that will
invest in community development banks and other institutions whose primary mission ·is
development and lending to distressed, underserved communities. The Fund will promote
the CDFI industry by serving as an information clearinghouse and provide assistance to
CDFis in the foriii. of equity; credit union shares, grants, deposits, or technical and training
services.
Capital assistance from the fund is only seed capital, and must be matched with
private funds. All types of new and existing CDFis will be eligible for assistance,
including community development banks and credit unions, micro-enterprise and revolving
loan funds, minority-owned banks and community development corporations. The
legislation authorizes $382 million or such higher sums as necessary. over four years. The
President's budget requests funding of $500 million over four years for this program.
Congress has appropriated $125 million for 1995.
The bill also authorizes a new financial incentive program, built largely on
Congressman Floyd Flake's Bank Enterprise Act, to provide incentives to traditional
insured lenders aJ;ld insured community development banks to increase lending and services
in economically distressed communities and to increase equity investments in CDFis.
Based on qualified increases in such activity, these lenders may receive direct incentive
payments from the CDFI Fund.
Currently, the community development fmancial institution industry is capitalized with
approximately $700 million and has extended more than $2 billion in loans. The $500
million requested for the CDFI program will greatly expand the capacity of the CDFI
industry and, when fully leveraged, will:
•
•
Create approximately $5 billion in new credit for economically distressed
communities.
Support as many as 75 new insured community development banks and credit
7-14
•
�•
•
•
uruons.
Support as many as 900 new, well-capitalized community
development corporations and over 4,000 community development
loan funds.
Support nearly 40,000 in new loans to individuals and small businesses.
Result in as many as 150,000 new jobs in low-income communities.
Case Study:
The Self Help Credit Union of North Carolina
When the Self-Help Credit Union in Durham, North Carolina began in 1983 with
funds from a bake sale, its founders Martin Eakes and Bonnie Wright had no idea the
Credit Union would make over 1300 loans totalling over $50 million by 1994. Self
Help, as a "community development bank" serves the kind of borrowers traditional
. lenders shun. Beginning with a specialty in lending to employee-owned companies,
Self-Help lends to small rural and other businesses that otherwise would have difficulty
accessing credit. Self-Help has also expanded into many other areas of need. Working
with the State, it developed a program to lend to low-income homebuyers, offering them
low-down payments. It lends to urban and rural microenterprises, enabling many lowincome women to start or expand a small business with a loan as small as $500. SelfHelp also helps non-profit organizations fmance the construction of community facilities
such as group homes for the homeless. In addition, Self Help is an active real estate
developer, having developed over 225,000 feet of space. Its buildings now house more
than 45 non-profits and 30 small businesses, serving as incubators that allow
organizations and businesses to share space and ideas.
·
Operating statewide and focusing on building the wealth of its clients, Self-Help has
expanded the definition of acceptable lending -- with 1.1egligible loan defaults. It also
serves as a bank and has attracted deposits from individuals, religious groups and other
organizations across the country. As a result, Self-Help is a self-sustaining, non-profit
entity that is an engine of growth in North Carolina.
7-15
�Case Study:
The Workers· Owned Sewing Company of
Rural Eastern North Carolina
•
The. Workers Owned Sewing Company (WOSCO), located in rural Bertie County, is
a cooperative owned primarily by African-American women employees of the company.
Founded by Tim Bazemore, when the company started, its. "cut-and-sew" business came
primarily from overflow work from other clothing companies. This type of business
proved sporadic, unpredictable, and highly competitive, operating on very thin margins.
In 1985, WOSCO was in trouble. In order to survive, the company needed to grow and
by-pass middlemen to bid directly to retailers. But they needed credit for necessary
materials and supplies. A small, local bank had helped WOSCO manage its business
with a $10,000 line of credit. This small line of credit was cut off, however, when a
large regional bank acquired the local bank. WOSCO's President, Tim Bazemore, turned
to the Self-Help Credit Union. Self-Help gave WOSCO a $50,000 loan and assistance in
marketing, financial management and business planning. Today, WOSCO's 80 working
women are all proud owners of the second iargest private employer in Bertie county.
WOSCO has secured contracts with Sears and K-Mart and sales are increasing. Each
year the company has been able to distribute profits back to its owner-workers.
•
7-16
�8. HEALTH CARE
.
Introduction
Health Care Reform
•
The President sent Congress a COD;lprehensive health care reform proposal in
November of 1993. The President's plan would have preserved what is right about
our health care system -- that we have the highest qualitY of care, talented and
d~dicated health professionals, and some of the most advanced research institutions
in the world. At the same time, the plan would have fixed what is wrong -- by
controlling skyrocketing health costs, increasing the ability of Americans to choose
their own doctor, and reducing bureaucracy and paperwork for patients, doctors and
· hospitals. And, most importantly, it would have rewarded hard-working families by
extending coverage to millions of uninsured Americans and giving millions more the
security of knowing that they would never again risk losing coverage.
•
Over the next two years, the President will continue his fight for meaningful health
care reform. He remains firmly committed to guaranteeing health insurance for
every American and to containing health care costs for families, businesses and
governments. He will work with Democrats and Republicans in Congress and take a
step-by-step approach toward these goals. This year, we can reform the insurance
market -- so that people do not lose their insmance when they lose their job or
change jobs or a family member falls ill, and so that small businesses can afford to
buy insurance for their workers; make coverage affordable for children and workers
who lose their jobs; give self-employed workers the same tax treatment as other
businesses, and help families provide long-term care for a sick parent or disabled
child.
WIC
•
The President has increased funding for WI C in each of his budgets.
•
More than one million nutritionally-at-risk, low-income infants, children under the
age of five, and pregnant, breast-feeding and postpartum women have been added to
the program since fiscal year 1993.
Immunization
•
•
The President has built a comprehensive vaccination delivery system by providing
free vaccines to certain categories of needy children, improving the public
8-1
�immunization delivery infrastructure in States and local communities, and educating
providers and parents about the importance of getting children the right vaccine
doses at the right ages.
•
Over the next two years, the Administration will continue to work to improve
immunization rates. By 1996, at least 90 percent of two-year-olds in this country
will be immunized with the most important vaccii}es. By 2000, the goal is to fully
immunize at least 90 percent of all. two-year-olds.
HIV/AIDS
•
The President has .increased resources for research, prevention and treatment,
focused national attention on the need for a comprehensive and coordinated strategy
in ·the fight against HIVIAIDS, and provided opportunities ·for greater involvement
of local governments and community-based organizations in responding to the
epidemic.
Women's Health
•
The President has taken an unprecedented and comprehensive approach to improving
the health of American women through research, education and treatment for health
and disease in women. This has included dramatic funding increases for research as
well as prevention and education programs on breast cancer.
•
.
8-2
�SA. HEALTH CARE REFORM
..
"Our families will never be secure, our businesses will never be strong,
and our government will never again be fully solvent until we tackle the
health-care crisis. "
President Clinton
February 17, i993
Joint Session of Congress
•
Actions to Date
•
In November 1993, the President sent Congress a comprehensive health
care reform proposal. The proposal would have· preserved the high
quality medical care that is the hallmark of the health care system in this
country, while controlling skyrocketing health costs, increasing choice,
arid reducing bureaucracy and paperwork for patients, doctors and
hospitals. And, most importantly, it would have guaranteed private
insurance to all Americans --rewarding hard-working American families
by extending coverage to millions of uninsured Americans and giving
millions more the security of knowing that they would never again risk
losing coverage.
•
The President remains firmly committed to providing insurance coverage
for every American and containing health care costs for families,
businesses, and governments. He .has asked both Democrats and
Republicans in the new Congress to work with him to take the first steps
toward achieving these goals.
"'
8-3
�Background
''And let me say again, the most expensive thing we can do is nothing. The
present system we have is the most complex, the most bureaucratic, the most
mind-boggling system imposed on any people on the face of the Earth. The
present system we have' has the highest rate of inflation with the lowest rate
. of return. "
President Clinton
October 27, 1993
Remarks to Congress on
the Health Security Act of 1993
"
Nearly sixty years ago, President Franklin Delano Roosevelt proposed to reform the
health care system as part of his Adniinistration's ground breaking Social Security
legislation. His efforts failed, however, when powerful special interests mobilized to defeat
the health care reform portion of his legislation.
Since FDR, every President -- Democrat and Republican· -- has pledged to address
the problems in the American health care system. A proposal for comprehensive health
reform has been introduced in every Congress since 1943. But every time a President or
Congress has tried to make the health care syStem work for ordinary Americans, powerful
special interests have defeated the effort. As far back as fifty years· ago, wealthy opponents
of President Truman's health reform legislation spent the equivalent of $30 million in
today's dollars on efforts to defeat reform. Last year, special interests spent over $100
million to defeat President Clinton's efforts to enact comprehensive health care reform
legislation.
·
And while the efforts to strengthen the system and improve access and affordability ·
have gone unrealized, the twin problems of rising health costs an~ increasing insecurity
keep growing.
Millions of Americans are at risk of losing health insurance if they lose their jobs or
of losing their savings if they get sick. Up to 30 percent of all workers are locked into the
j~bs they have now because they fear losing their health insurance -- often because they or
someone in their family has been sick and has what insurers call a preexisting condition.
And on any given day, over 40 million Americans, most of them working people and their
children, have no health insurance at all.
Even though so many Americans have no coverage at all, medical costs continue to
grow faster than the rate of inflation, and the United States spends ov~r a third more of its
income -- 14 percent of GDP -- on health care than. any other nation. Health care costs are
8-4
...
�'
I
,
eating away at our wages, our savings, our investment capital, and our ability to create new ·
jobs in the private sector. Hard working Americans keep spending more and more on the
same health care benefits, while their take-home wages stay the same. And American
companies trying to compete in global markets are severely disadvantaged.
Rising costs are particularly troublesome for small businesses -- the engine of
entrepreneurship and job creation in America today. Administrative costs for health care
premiums for small businesses are often 8 times higher than they are for large businesses.
And many small businesses cannot find insurers that will offer them coverage at any price.
We have not only the costliest, but also the most wasteful system in the world.
Today we have more than 1,500 insurers, with hundreds and hundreds of different forms.
No other nation has a system riddled with paperwork like ours. . In recent years, the
number of hospital administrators in this country has grown four times more rapidly than
the number of doctors. Our nation's health care dollars often go to those who push paper,
not those who provide care.
The Initiative
1993-1994
In November 1993, the President sent Congress a comprehensive health care reform
proposal. The proposal would have preserved the high quality medical care that is the
hallmark of the health care system in this country, while controlling skyrocketing health
costs, increasing choice, and reducing bureaucracy and paperwork for patients, doctors and
hospitals. And, most importantly, it would have guaranteed private insurance to all
Americans --rewarding hard-working American f8milies by extending coverage to millions
of uninsured Americans and giving millions more the security of knowing that they would
never again risk losing coverage.
..
The President's bill spurred an unprecedented debate as Congress and Americans
across the country began to discuss widely the problems faCing the health care system.
This debate produced a consensus on several key points. Almost all of the health reform
proposals -- Democrat and Republican -- introduced last year contained comprehensive
insurance market reforms, including provisions that would have: prevented insurers from
denying coverage to people who change jobs or lose their job; stopped insurers from
turning people away just because they are sick or old; prohibited insurers from dropping
people from coverage when they get sick; and prevented insurers ·from jacking up prices for
small businesses or sick individuals.
8-5
�Many bills also expanded coverage to uninsured low- and middle-income Americans.
This would have made health care available to those who today have no insurance and must
wait until their illnesses are serious and costly before seeking care -- which, in turn, would
have reduced cost-shifting onto private premiums. The bills also included various marketbased solutions to address the problem of escalating health care costs by increasing
competition and choice.
Congressional committees held nearly 200 hearings on various issues, including
market reforms, coverage, and long-term ·care. After several months of debate, and for the
first time in history, a congressional committee voted for comprehensive health reform
legislation -- in fact, four Committees did so. And, in August 1994, for the first time in
history, the Senate brought a comprehensive health reform bill to the floor for debate. In
the end, however, Congress could not pass legislation.
The Current Initiative
Without health care reform, American families, business and governments will continue to
suffer from problems in our health care system:
•
Health costs per person will rise by more than 50 percent by the end of the decade,
from about $3,300 in 1993 to over $5,000 by the year 2000.
•
More Americans will lose coverage, including many working Americans. The
number of uninsured Americans rose by more than one million in 1993. Eighty-four
percent of the uninsured. in 1993 were ·in working families, and more than 55 percent
lived in families headed by full-time workers.
•
People will continue to be locked into cu"ent jobs out offear of losing coverage,
even when faced with opportunities to move to better jobs. Up to one-third of
workers surveyed are ·afraid to leave their jobs for fear of losing health coverage.
•
Businesses will continue to face rising health costs. Total health benefit costs per
employee rose 8 percent in 1993, nearly three times the rate of general inflation.
Small firms, in particular, suffer under the current system; insurers charge them up
to eight times more than large fmns for administrative costs. Many small fmns pay
exorbitant amounts for insurance or cannot obtain it at any price, and many often
cannot afford to provide any choice of health plans to their employees.
•
Health care will continue to consume a larger share offederal, state, and local
government budgets, leaving fewer resources. for such other priorities as education
and job training, transportation and telecommunications infrastructure, and research
and development. In fact, over the next five years, almost 40 percent of the growth
8-6
�in total federal spending will come from health care spending.
•
....
That is why the President remains committed to health care reforms that will
guarantee insurance coverage to every American and contain health care costs for families,
businesses and Federal, State and local governments. The President has asked Democrats
and Republicans in Congress -- in both a letter to the Congressional Leadership in
December 1994 and the State of the Union Address in January 1995 -- to work with him to
take the first steps toward achieving these goals. This year, the President believes
Republicans and Democrats can:
•
Reform the insurance market. Americans should no longer risk losing coverage
when they. change or lose a job, or a family member falls ill. Small businesses
should have access to affordable insurance that is currently only available to large
businesses -- and Congress should provide assistance to states to establish voluntary
purchasing pools· to help .small businesses purchase affordable insurance.
•
Make coverage affordable for, and available to, all children. The United States
should act responsibly -- as its major competitors already do -- and ensure that its
children have health care when they need it. Nearly 10 million American children
.are without health insurance today -- many of them in working families. When
these children get sick or hurt, their parents cannot always· afford to take them to get
the proper care. Quite often, they do not get treatment until their illnesses become
serious and even more expensive.
•
Help workers who lose their jobs keep their health insurance. Workers should not
have .to risk losing their health insurance when they are temporarily out of work. In
today's economy, when hard-working Americans lose their jobs, they often lose their
health insurance. Even workers who are allowed to keep the coverage they had
when they were working have to pay the full cost of that insurance policy when they
lose their jobs. ·
·
•
Level the playing field for the self-employed by giving them the same tax treatment
as other businesses. The self-employed should be able to deduct their health care
expenditures from their taxable income, just as other businesses do. Today, selfemployed individuals not only often pay more for health insurance, but also have to
pay for most of their health care costs with after-tax dollars, putting them at a
·
significant disadvantage against other business owners.
•
Help families provide long-term care for a sick parent or a disabled child. Millions
of middle-class American families who provide long-term care for family members
at home :-- frequently at enormous costs -- should get some assistance through tax
incentives and expanded State-administered. programs. In the current system, only·
8-7
�fue poor have access to long-term care, often in institutions, while middle-class
families struggling to care for sick parents or disabled children at home often bear
the full burden of the costs on their own.
As he continues to fight for health care legislation, the President believes that we
can and should improve existing health care programs. For example, efforts are underway
to reduce regulatory burdens for health care providers and consumers and to expand
managed care options for Medicare and Medicaid beneficiaries.
8-8
�Case Study: Jessica Wright
•
Seven year. old Jessica worries about getting sick and not being able to
afford to see a doctor. Her mother, Beth, worries that her third shift job as a
temporary employee will not cover the costs of medical care for her or her
daughter, neither of whom have health insurance. Beth works hard and
refuses public assistance that would give her daughter health benefits.
Instead, Beth has gotten quite good at providing home remedies for most of
Jessica's ailments.
·
Case Study: Lynn Hicks
Lynn Hicks, her husband and five teenage children live in Dilltown,
Pennsylvania. Last year, Lynn's husband was laid off from his
manufacturing job of 16 years, and their health care coverage was
discontinued. Although she worked part time, she received no benefits, and
the family was unable to afford insurance on their own. After putting off
doctor's visits, Ms. Hicks eventually was diagnosed with breast cancer.
Because she was unable to .afford treatment, she was forced to quit her job
and go on public assistance in order to receive care. Lynn says, "In May of ·
1993, my husband lost his job and with his job, our health insurance. Until
that tinie, we neyer realized how vulnerable our family was to falling
between the cracks in our health care system."
.
8-9
�88. SPECIAL SUPPLEMENTAL NUTRITION
PROGRAM FOR WOMEN,
INFANTS AND CHILDREN (WIC)
" ... [L]et us remember that there are certain fundamental national needs that
should be addressed in every State, North and South, East and West-immunization against childhood disease, school lunches in all our schools, Head
Start, medical care and nutrition for pregnant women and infants; all these
things are in the national interest. "
President Clinton
January 24, 1995
State of the Union
Actions to Date
The Clinton Administration has provided strong and consistent support for .·
·the Special Supplemental Nutrition Program for Women, Infants and Children
(WIC) Program.
•
President Clinton has increased funding for WIC in each of his budgets.
As a result, more nutritionally-at-risk, low-income infants, children under
the age of five, and pregnant, breastfeeding and postpartum women are
being served than ever before. More than one million participants have
been added to the program since fiscal year 1993 --an 18.2 percent
increase ·in participation. Approximately seven million women and
children are expected to benefit in 1995.
•
The legislation reauthorizing WIC for fiscal years 1995 through 1998 also
provided increased funding for breastfeeding promotion and funding to
improve WIC's infrastructure-- clinic space, equipment, and management
information syStems.
8-10
...
�Background
•
The WIC program began in 1972 to provide supplemental nutrient-dense foods to
low-income women and children. Today, the WIC Program continues to provide food
packages in order to prevent nutrition-related health problems during pregnancy, infancy,
and early childhood, and has two additional important missions. WIC also offers nutrition
education and helps identify and refer women and children to other needed health and
social services.
•
Supplemental foods. WIC foods are intended to supplement a participant's diet.
WIC foods include iron-fortified infant formula, iron-fortified cereal, vitamin erich fruit and vegetable juice, eggs, milk, cheese, peanut butter, and dried beans
and peas. Seven different monthly food packages are available to participants,
based on their age, category of eligibility and nutritional needs. Special foods are
also available for women who breastfeed their infants.
•
Nutrition education. WIC nutrition education teaches WIC participants about the
connection between proper nutrition and good health. WIC nutrition education also
encourages women to breastfeed (unless it is medically contra-indicated) and
informs them about the risks of tobacco, alcohol and other drug use.
•
Health care referrals. During individual nutritional assessments of participants,
WIC program staff make referrals to other health and social services, including
prenatal care, well baby care, substance abuse counseling, and other nutrition
assistance programs. Because so many WIC participants· do not have health
insurance or adequate access to medical care, these referrals may. be their only
source of ongoing health care services. WI C has been a leader in efforts to
promote pre-school immunizations.
WIC is an essential investment in the health, development and nutritional wellbeing of the most vulnerable segments of our population. WIC participation is associated
with a lower incidence of low birth weight and very low birth weight infants and with a
lower incidence of infant mortality. WIC has also been instrumental in helpirtg children
enter school ready to learn.
And this investment· produces savings. There is a direct link between participation
in W1C and lower health care costs. Recent studies by the USDA have found that
Medicaid-eligible, low-income women who participate in WIC during pregnancy have
healthier babies and lower Medicaid costs than Medicaid-eligible, low-income women who
do not participate in WIC; every dollar spent on pregnant women in WIC saves between
$1.77 and $3.13 in Medicaid costs from birth through the first 60 days after delivery.
8-11
�The Initiative
The President has shown his commitment to WIC by seeking increased funding in
each year since taking office. Appropriations have increased by $610 million from fiscal
year 1993 ·to fiscal year 1995. These increases will permit more than one million new
participants to receive supplemental food, nutrition education and health care referrals. In
fiscal year 1995, on average seven million needy women, infants and children are expected
to be served each month.
Clinton's
Budget (in
billions)
Actual
Appropriation
(in billions)
Average Monthly ·Participation
(in millions - rounded)
Children
Women Infants
1993
$2.84
$2.86
1.37
1.74
2.81
5.92
1994
$3.29
$3.21
1.50
1.79
3.19
6.48
1995
$3.56
$3.47
estimated total participation:
7.0
1996
$3.82
Pending
estimated total participation:
7.4
Fiscal
year
Total
At the same time, the Administration has worked to improve quality and increase
efficiency in the program. For several years state WIC Programs have used competitive
bidding systems for rebates on infant formula To date, 70 WIC State agencies have infant
formula rebate contracts in place with manufacturers. For fiscal year 1995, the projected
savings are about $1 billion, which will support WIC benefits to 1.6 million participants.
The· National Performance Review cited these rebates as an example of a particularly
effective cost containment measure.
Over the next two years, the Administration will remain vigilant to protect WIC
from severe reductions in funding. In addition, the Administration will continue work on
·
several projects.
•
Through a strong partnership involving the Department of Agriculture, the Centers
for Disease Control, private organizations, and State agencies, work is underway to
increase immunization rates for children under the age of two. As a resUlt of this
8-12
•
�'i ' ,! ~
increased coordination, on-site immunizations will be available at some WI C
clinics, and WIC staff will track and refer infants and children for needed
immunization~. WIC will continue to work with other agencies to improve .
immunization rates .
.
•
•
WI~
clinics now offer program applicants the opportunity to register to vote,
consistent with the National Voter Registration Act. The "Motor Voter" law also
makes voter registration available at Food Stamps, Aid for Families with
Dependent Children, and Medicaid offices.
Case Study: Andy
Andy was born in the Gila River Indian community in Central Arizona. When
his mother brought him for his two-month check-up, a WIC staff member noticed that
he wasn't breathing normally and that his weight gain was below normal. The WIC
staff member· referred Andy first to the Special Needs Clinic and then to a hospital in
Phoenix, where it was determined that Andy had cardiac problems. After treatment,
WIC provided formula and food supplements, taught his mother how to prepare them
and carefully monitored Andy's feeding and weight gain.
Case Study: Danny
When Danny's mother brought him to the WIC clinic, his father was unemployed
and the family had not eaten in two weeks. Danny had only water during that time.
Danny was immediately certified for WIC and given vouchers for infant formula, infant
cereal and juice. The WIC Director also referred the family to an .emergency food
assistance program and to the Food Stamp Program.
..
8-13
�SC. CHILDHOOD IMMUNIZATION
"To guarantee that our children's faith in us is justified, we must renew our
commitment to protect them from deadly infectious diseases. "
President Clinton
April 20, 1994
Proclamation 6675
National Immunization Week
.
..
...
.
8-14
�; ·I
Actions to Date
•
•
The President has launched a comprehensive effort to give our children a
healthy start in life by immunizing them against preventable disease. Under
the Childhood Immunization Initiative, the Administration has:
•
Provided states and local governments with added support for
imrp.unization programs. Federal spending to support immunization
infrastructure increased by 213%, from $45 million to $141 million.
•
Started the Vaccines For Children Program which will provide free
vaccines to about 60% of our nation's children.
•
Helped create state information systems to see that all children are
properly immunized.
•
Formed innovative partnerships with private organizations that will
reach target communities with an immunization message:
Gerber Products Company put an immunization message on
the back of baby cereal boxes;
Kiwanis International created a national public awareness
campaign, including public service announcements,
billboards, and posters; and
McDonalds featured an immunization message in its tray
liners.
•
•
Helped thousands of health care providers improve their immunization
procedures by broadcasting information ·via satellite to 16,000
participants in 44 states. Using this technology, the Centers for
Disease Control and Prevention will have trained more providers
within six weeks than it had trained in the previous ten years.
•
Simplified what parents and health care professionals need to kn<;>w to .
ensure children are properly immunized, by working with leading
health professionals to get them to agree on a single recommended
·immunization schedule.
8-15
�Background
Childhood vaccines prevent many infectious diseases -- polio, measles, diphtheria,
mumps, pertussis, ·rubella, tetanus, hepatitis-B, and Haemophilus influenzae type B (Hib)
(which causes meningitis). Children need 11 to 15 vaccine doses by the age of two,
requiring about five visits to a doctor or clinic. Yet too many of America's two-year-old
children do not get the full range of vaccines and full protection from illness and possible
·
death.
.
•
The cost of immunizing a child is much higher today than it was just a few years
ago. The full complement of vaccines has risen from only $28 in 1983 to about $270 in
1994. Costs are up in part because new vaccines are now recominended for all children
and because the prices of some vaccines have gone up. These higher costs mean that more
uninsured and underinsured families are unable to pay for vaccines out of their own
pockets. In response, private providers now send more children to public health clinics for
their shots, where Federal or state supplied vaccines are free. Because these referrals break·
the· continuity of care, children miss opportunities for vaccination.
The influx of children referred from the private sector has further burdened the
public clinic system. State and local government clinics often don't have the resources to
track these children well enough to make sure that they get all their shots, or io offer
parents the convenience of evening or weekend hours. Although measles is preventable, a
failure to immunize children on time led to an epidemic of measles in 1981-91. This
epidemic resulted in more than 55,000 cases of the disease, 11,000 hospitalizations, 44,000
hospital days, and 130 deaths. The epidemic cost an estimated $150 million in direct
medical coSts alone, without including massive indirect costs stemming from lost time on
the job, lost productivity, and lost wages.
By preventing expensive treatment of diseases, vaccines save money. For every
dollar spent on the measles/mumps/rubella vaccine, an estimated $21 is saved. About $29
is saved for every dollar spent on the diphtheria/tetanus/pertussis vaccine:
The importance of immunization for young children must be reinforced at every
opportunity. In addition, cases of disease need to be detected early to identify under- .
immunized populations and to institute disease control efforts. But, surveillance systems
often have been inadequate to detect cases of measles early enough. As a result, vaccinepreventable diseases have spread too rapidly, especially within populations that are at
greatest risk.
8-16
•
�The Initiative
•
The President's Childhood Immunization Initiative is building a comprehensive
immunization system that marshals the public and private sectors, health care professionals,
and volunteer organizations to increase vaccination rates. First,, states and local
governments will improve and expand immunization efforts using added Federal funds.
Second, uninsured children can be immunized by their private physicians through this
program. Third, an enormous outreach effort will help providers and families to understand ·
the importance of immunization and to know which vaccines are needed and when.
The Initiative's goal is to immunize at least 90 percent of two-year-olds in this
country with the most important vaccines by 1996 and at least 90 percent of all two-yearolds with the full series of vaccines by 2000.
The Childhood Immunization Initiative will:
1. Improve the quality and quantity of vaccination services:
In 1994, the Federal government sent $129 million ($83 million in new Federal
resources) to states and local health departments to improve existing services based on
plans they developed. Each area uses its own discretion to allocate these funds to meet
local needs -- whether by lengthening clinic hours or automating records. Locally tailored
systems mean that parents can visit an immunization clinic at more convenient times and be
assured of prompt, quality service. Automated record-keeping· creates easy reminders for
providers and parents that vaccinations are due.
2. Reduce vaccine costs for parents:
The Vaccines for Children program will reach more children with free vaccine than
ever before, including many at their own doctor's offices. Sixty percent of our Nation's
children will benefit, including the uninsured, those on Medicaid, Native American children,
and children served by federally qualified health centers. States can buy vaccines at
reduced Federal prices to provide universal access to vaccine for all children in their state.
The Federal government will assist states to purchase vaccines. As a result, cost of
vaccines will no longer be a barrier for our neediest children, and parents can get their
children vaccinated by their family doctor.
3. Increase participation, education, and partnerships in communities:
The Administration's plan sends outreach consultants around the country to
increase awareness of the importance of vaccinating children and to encourage health care
providers to use every opportunity to vaccinate children in their care. Health departments,
8-17
�community and business groups, private and public providers, religious and service
organizations, schools, and the media are joining community-based networks to increase
infant vaccination efforts. We are encouraging our immunization partners to take advantage
of National Infant Immunization Week (in late April each year) to focus attention on the
vaccination needs of infants and young children.
.
4. Better monitor diseases and vaccinations:
We ~e creating a better system to monitor vaccine-preventable diseases so that we
can spot problems early and prevent cases from escalating into epidemics. The Centers for
Disease Control and Prevention is working with state and local health departments to ·
pinpoint the populations that are not receiving the benefits of infant vaccination.
S. Improve vaccines and how they are used:
We are increasing applied research into new vaccines in an effort to reduce the
nUmber of shots children must receive and to ensure safe and effective vaccines. We
developed a single childhood immunization schedule by working with the Advisory
Committee on Immunization Practices, the American Academy of Pediatrics, and the
American Academy of Family Physicians. This single schedule allows what parents and
providers to know what is needed to properly immunize children.. In addition, although
. available vaccines are very safe and effective, the Centers for Disease Control and
Prevention is working with states and selected providers to enhance systems to detect rare
adverse events following vaccination.
•
8-18
�Case Study: Kathleen
'
Kathleen, a single parent living in Santa Fe, New Mexico, was worried
about juggling her work schedule to take her young son for vaccinations at
the Santa Fe County Health Office. "I'm a single parent trying to raise a
child alone, and it is not easy to get off work to take him for shots."
To her pleasant surprise, when she called to. find· out which day the
clinic ·offered immunizations, she discovered that the Santa Fe County Health
Office clinic was now offering immunizations five days a week and had
extended their hours. In 1993, New Mexico, along with other states and
some urban areas, received an increase in Federal funds to improve their
vaccine delivery infrastructure. Santa Fe County chose to use some of the
funds to increase the number of days it offered vaccinations to children.
Nurse Manager Laurie Spiegel said, "We're trying to be more accessible and
people are really responding. We know that both parents may work and it's
difficult to get to the clinic. Extending the immunization hours also means
we've decreased the· waiting time at the clinic."
Kathleen· was able to vaccinate her son as recommended and wasn't·
forced to miss work. "It's nice to see that people realize how difficult it can
be to get to the clinic during a few fixed hours. I appreciate being able to go
for services at more convenient hours. Finally, a consumer-friendly state
service."
•
8-19
�80. HIV/AIDS
.
Actions to Date
The President has attacked the HIVIAIDS epidemic by increasing resources for
research, prevention and treatment, providing better national focus and leadership, and
creating opportunities for greater involvement of local governments and community·
based organizations. The Administration has:
•
•
Increased Federal spending on HIV/AIDS activities by 30 percent.
Increased funding for the Ryan White CARE Act by 81.9 percent, bringing that
program to full funding.
•
Reorganized AIDS research at the National Institutes of Health and appointed
renowned immunologiSt William Paul, MD, to head the NIH Office of AIDS
Research.
•
Continued funding of research that shows that the use of AZT during pregnancy
and childbirth will sharply reduce the risk of HIV infection of newborn infants.
•
Required the inclusion of women in all NIH-sponsored clinical trials of
HIVI AIDS drugs.
•
Created a White House-level Office of National AIDS Policy to provide greater
Federal focus.
•
Created the National Task Force on AIDS Drug Development to identify and
·eliminate barriers to the development of drugs for IDV and HIV-related
conditions.
•
Launched the Prevention Marketing Initiative aimed at reducing HIV
transmission among young adults (ages 18"'25).
•
Established HIV/AIDS workplace education training for all Federal employees .
•
.
8-20
.
�Background
•
HIVIAIDS continues to devastate American society. Since the epidemic began in
1981, more than 400,000 Americans have been diagnosed with AIDS and nearly 250,000
have died. In 1994 alone, nearly 81,000 Americans were diagnosed with AIDS and more
than 40,000 died as a result of HIV infection. While scientists, public health officials, and
community-based organizations responded quickly to AIDS at the first signs of the
epidemic, the Federal government's response was often disjointed and, at times, hostile.
Two national commissions sharply criticized this early response and advocated a more
coordinated, aggressive effort.
Racial and ethnic minorities, especially women and children, have been particularly
hard hit by HIVIAIDS. For example, black and hispanic women make up 74 percent of
women reported with AIDS. And 84 percent of children diagnosed with AIDS are either
black or hispanic.
Adolescent Americans are one of the fastest growing populations affected by HIV.
In 1994, one in two new HIV infections occurred in people under the _age of 25. One in
four new infections occurred in people under the age of 20. In the last two years, AIDS
has become the leading cause of death in Americans between the ages of 25 and 44,
surpassing cancer, homicide, and accidental death.
The Initiatives
The President identified AIJ?S spending as one of his top priority investments and
has consistently provided funding increases for research, prevention, treatment, and direct
services. Between fiscal year 1993 and fiscal year 1995, the President increased AIDS
spending as follows:
•
Category
%Increase
HIVIAIDS Research
HIVIAIDS Prevention and Education
HIVIAIDS Services (Ryan White)
+17.0%
+15.0%
+81.9%
The Ryan White ·CARE Act was enacted in 1990 to enable states and metropolitan
�areas hard hit by the AIDS epidemic to provide direct services to people living with
HIVIAIDS. But the program was funded at less than half of the levels authorized by
Congress in the original legislation. This underfunding prevented thousands of people
living with HIVIAIDS from receiving the services needed to maintain. their health. The
National Commission on AIDS urged full funding of the Ryan White CARE Act in its final
report to the President.
In two years, the President fully funded the Ryan White CARE Act by increasing
its resources by 81.9 percent. In his fiscal 1996 bu~get, the President proposed a 14
percent increase in Ryan White CARE funding, bringing the three-year increase to 108
percent. The additional investment has allowed the Ryan White CARE Act to provide
funding to an additional 17 cities, providing services to more than 300,000 individuals
living with HIVI AIDS. Those funds have also provided new services including drug
assistance; services for women, children, and other special needs populations; and expanded ·
rural services.
The Administration will continue to fight for reauthorization of the Ryan White
Care Act. In addition, the President will continue to fund research, prevention, education
and services to work toward fmding an effective vaccine and a cure for HIVIAIDS,
reducing the number of new HIV infections, and assuring that all people with HIV have
access to needed treatment.
In addition to new resources, the President ·sharpened the federal government's
focus on the HIVIAIDS epidemic. Following the recommendations of the National
Commission on AIDS, the President established a White House Office of National AIDS
Policy to advise him directly on the proper response to the epidemic. An Interdepartmental
Task Force on AIDS will.assure coordination of the Federal response.
In 1993, the President signed the NIH Revitalization Act, which created a
permanent Office of AIDS Research (OAR) at the National Institutes of Health.
Immunologist William Paul, MD, was recruited to head the new OAR and has quickly
established a five-year plan for AIDS research centered on basic research. Recently, NIHfunded researchers reported that the use of AZT during pregnancy and. childbirth can
dramatically reduce the risk of HIV infection of an unborn child. This seminal research
may be the first step toward blocking the transmission of HIV.
The Centers for Disease Control and Prevention have fundamentally restructured
HIV prevention programs to put more control in the hands of local government and
community-based AIDS organizations. Rather than a top-down approach to prevention
programming, CDC now uses a bottom-up method that tailors programs to local needs.
Members of the AIDS community are also participating in a number of Federal advisory
groups, helping to shape policies that affect their lives.
8-22
�In order to maintain national focus on the fight against HIVI AIDS, the White
House Office of National AIDS Policy is developing a national plan on research,
prevention, education and services for HIV/AIDS .
•
Case Study: Stephanie and Reyna
Stephanie is a 27-year-old woman living in California. During a routine
prenatal care visit, she found out she is HIV -positive. Stephanie read about
the results of NIH-sponsored research indicating that the use of AZT during
pregnancy and childbi~ would reduce the chance of her baby being born
HIV -infected. Stephanie followed the guidelines set out by that research and
her baby girl, Reyna, was born HIV-negative and remains healthy today. On
December 1, 1994, Stephanie and Reyna visited with President Clinton to
help commemorate World AIDS Day.
Case Study: Debbie
Debbie is a 27-year-old woman living with AIDS in a rural P!i!t of South
Carolina. Until recently, few doctors in Debbie's hometown were willing to
treat AIDS patients in part because so many were uninsured. With funding
from the Ryan White CARE Act, the County Health Department opened the
CHANGES clinic in Orangeburg, which operates six days a month with a
rotating staff of five physicians and three nurses .. The clinic's staff taught
Debbie's mother to care for her daughter at home. When Debbie is too sick
to come to the· clinic, the staff come to her home. Not only has the clinic
prevented more costly hospitalizations, it provides Debbie and her mother
peace of mind. Debbie's Mom calls the staff her "guardian angels."
.
8-23
�BE. WOMEN'S HEALTH
"[W}hen it comes to health care research and delivery, women
can no longer be treated as second-class citizens. "
President Clinton
October 18, 1993
National Breast Cancer Coalition
8-24
•
�Actions to Date
•
•
President Clinton has taken an unprecedented and comprehensive
approach to improving the health of American women and ending the
inequities that have plagued research, clinical practice and education about
health and disease in women.
•
The President's 1996 budget for·the Public Health Service (PHS)
included $2.0 billion for programs directly targeting WQmen's health,
an increase of $551 million since fiscal year 1993.
•
Since President Clinton took office, federal funding for breast cancer
research at the National Institutes of Health (NIH) has increased 65%,
to $377 million in 1995 alone.
•
To ensure the reliability of mammograms, the Food and Drug
Administration has issued quality standards for mammography
facilities.
•
To combat physical and sexual violence against women, the
President's crime bill established a National Domestic Violence
Hotline, tripled federal funding for battered women's shelters, and
authorized over $200 million for competitive grant programs to fund
rape prevention and education programs. The President also created
a new Violence Against Women· Office at the Justice Department and
announced an initial $26 million in grants under a new program to
combat violence against women.
•
The President actec!, swiftly to protect the reproductive health of .
American women by repealing the "Gag Rule" that restricted abortion
counseling at federally funded family planning clinics, revoking the
import ban on RU-486, ~d reversing the ban on abortion services at
military hospitals .
.
8-25
�Background
...
"In medical research, women have been on the sidelines too long, {there
has been} too little research into the causes and cure of breast cancer and
osteoporosis. Heart disease is the number one killer of women, but until
recently, all of the search for a cure was centered only on men. The
simple fact is that we 've paid too little attention to the unique problems of
women ... We're trying to change all that in this administration."
President Clinton
May 6, 1994
Remarks on Women's Health Care
Heart disease killed approximately 360,000 women and in 1992 was the leading
cause of death in women. Breast cancer killed approximately 46,000 American women in
1993, and it is estimated that 1.5 million new cases will be diagnosed in the 1990s. That
means that one in eight American women will develop breast cancer in her lifetime, up
from one in 20 twenty years ago. And women's health is threatened not only by deadly
diseases but also by an epidemic of physical and sexual assault; 20 to 30 percent of
women's visits to emergency rooms are for treatment. of injuries caused by domestic
violence.
Not only is the incidence of acute and chronic illnesses greater among women, but
women have poorer "health outcomes" than men. For example, the one-year post-heart
attack survival rate is over one-half in men, but less than one-third in women.
Historically, women's health concerns have not been adclressed adequately by the
nation's medical research institutions and in the delivery of health care services. Research
on diseases that affect women has been underfunded, and women have been
underrepresented in clinical research studies.
The Initiative
In the {first] three minutes ... of this talk, another American woman will
be diagnosed with breast cancer. If I speak for I 2 minutes, another
woman will die of it during the course of the remarks. And yet we know
that one in every three American women does not receive the basic
services, like mammograph[y}, which can help to detect breast cancers
and that the cost of not dealing with this amounts to about $6 billion a
year to this country over and above all the human heartbreak involved.
8-26
�•
Now that means that this is another one of those terrible American
problems· that is not only tearing the heart out of so many [American}
families but also has left us again with no excuse for why we would spend
so much money picking up the pieces of broken lives when we could spend
a little bit of money· trying to save them.
President Clinton
October 18, 1993
National Breast Cancer Coalition
The. Clinton Administration has worked to improve women's health through a
multi-faceted effort involving research, training, education, service delivery programs and
collaborations with the private sector. To coordinate activities on women's health, the
President appointed the first Deputy Assistant Secretary for Women's Health at the
Department of Health and Human Services.
Illustrating the strength of the Administration's commitment to women's health, the
Public Health Service's fiscal year 1995 budget for women's health was $1.9 billion, an
increase .of almost $14 7 million over 1994 levels and $409 million since 1993. Almost half
of these funds support research at the NIH on breast, cervical and ovarian cancer, on
pregnancy, contraception and reproductive health, on osteoporosis, on lupus, and on femalecontrolled chemical barriers to protect women against HIV and other sexually transmitted
diseases. The Administration will continue to invest in these critical areas.
Breast Cancer
The Administration has launched an attack against this deadly disease on a variety
of fronts. The 1995 budget included $387 million for breast cancer research at NIH; the
Department of Defense has already distributed $240 million to fund 450 research and
training grants and will award an additional $1 SO million allocated in the 1995 budget.
Early detection is a crucial weapon in the fight against breast cancer. The
Administration has worked to improve the quality of breast cancer screening and to
promote its use.
•
•The Food and Drug Administration (FDA) implemented quality standards for
mammography facilities to ensure reliable mammograms. Working with the FDA,
the Agency for Health Care Policy and Research (AHCPR) has developed and
publicized guidelines on mammography to inform health care professionals and
consumers about how to obtain a high quality mammogram .
•
•The PHS Office on Women's Health and the Nationai Cancer Institute are
facilitating collaborations among government, academia and industry to apply
.
8-27
�imaging technology (currently used by the defense, space and computer graphics
industries) to the early detection of breast cancer.
•
•The Administration has continued to support the Cen~ers for Disease Control and
Prevention's National Breast and Cervical Cancer Early Detection Program,
through which CDC collaborates With States, the American Cancer Society and
other organizations to provide greater access to screening and follow-up services,
especially for low-income, elderly and minority women. With continued support,
comprehensive early detection programs will reach women throughout the nation.
•First Lady Hillary Rodham Clinton has joined with the Health Care Financing
Administration and the PHS Office on Women's Health to launch a campaign to
educate Medicare beneficiaries and health care professionals about the availability
of mammography benefits under the Medicare program and about the importance
of regular breast cancer screening for older women. The goal of this nationwide
campaign is to increase significantly the number of older women using this
lifesaving benefit.
In addition to this activity, the PHS Office on Women's Health is coordinating the
National Action Plan on Breast Cancer, a framework for action to prevent, diagnose, treat
and ultimately to eradicate breast cancer through activities in three major areas: health care
delivery, research, and policy. The action plan, formulated during a national breast cancer
conference convened by the Secretary of the Department of Health and Human Services
seeks to meet its goals by drawing on resources in both the private and public sectors; it
involves consumer, health care professional, scientific organizations and private industry as
well as the federal government.
In the next two years, the action plan expects to implement projects including:
•A screening test for the newly discovered breast cancer gene, accompanied by
appropriate counseling procedures.
.•The availability of breast .cancer prevention, .early detection and treatment
information on the "information superhighway."
•The creation of a national patient tissue bank for easier testing of the reaction of
breast cancers to certain chemicals. ·
·
.
8-28
�Ensuring Equity in Medical Research
An important effort underway to redress the gender inequity in medical. research is
the NIH Women's Health Initiative, the largest clinical research study ever conducted. This
initiative is an exploration of the major causes of death, disability and frailty in postmenopausal women: heart disease, breast and colon cancer, and osteoporosis. The multiyear study is also investigating strategies to prevent disease and promote good health for
older women; for example, researchers are examining the effects of diet and vitamin
supplements and of hormone replacement therapy.
The Office on Research on Women's Health within NIH is working to assure that
·women's health issues become an integral part of research throughout the scientific
community. During the next year, the Office intends to support research on: lung cancer,
urological disease, and auto-immune disease in women; reproductive health; occupationai
health hazards for women entering previously male-dominated jobs; mental and addictive
disorders in women; and risk factors for disease in women of different racial, ethnic and
socioeconomic groups. Over the next several years, the Office will focus its efforts on
research on special health problems faced by women living in rural areas or in poverty.
Also over the next several years, NIH will be examining reproductive problems
facing American women, such as endometriosis and uterine fibroids with the hope of
finding better ways to prevent or treat these conditions so that fewer hysterectomies are
necessary.
Minority Women
In 1993, the President signed the NIH Revitalization Act of 1993, requiring that
women and minorities be included in all clinical research supported by NIH. Other efforts·
to address the health needs of minority women include the first Na~ional Minority Women's
Conference cosponsored in 1994 by HHS, and several health education projects for women
of color sponsored by the PHS Office on Women's Health. Upcoming efforts include an
AHCPR project to evaluate ways to prevent low birth weight among minority and high-risk
infants. In addition, the Administration and the Association of American Medical Colleges
are developing a culturally appropriate women's health curriculum to be distributed to all
medical schools. The new curriculum will present information that is currently omitted
from medical school education.
Other Activities and Initiatives
•
President Clinton has taken a number of important steps to protect women's
reproductive health. In the first week of his Administration, he issued an
Executive Order ending the prohibition on abortion counseling at family planning
8-29
�clinics. The President also reversed the ban on abortion services in military
hospitals and lifted the import ban on RU-486 (a drug already available in France,
the United Kingdom and Sweden that terminates pregnancy without surgery).
Testing of RU-486 is now under-Way in this country.
•
The Administration has mobilized to fight violence against women. The
President's crime bill created a National Domestic Violence Hotline to provide
information and assistance; tripled the federal funding for battered women's
shelters to a total of $325 million ·over six years; and authorized $200 million for
programs to fund rape prevention programs and to educate and train health care
professionals. The President also created a new Violence Against Women Office
at the Justice Department and announced an initial $26 million in grants under a
new program to combat violence against women. In addition, the Centers for
Disease Control and Prevention has embarked upon an initiative aimed at
developing effective measures for reducing the threat that women face of physical
and sexual assault ·at the hands of partners, acquaintances and strangers. The CDC
will continue to work with States and public and private organizations to track.
violence against women, support education· for providers and the public, and
evaluate ways to· prevent the violence.
•
Concerns about environmental threats to women's health motivated the PHS Office
on Women's Health to establish an interagency committee to evaluate and promote
work on this issue. Over the next two years, agencies including the Department of
Defense, the Department of Health and Human Services and the Environmental
Protection Agency will foster initiatives to explore how pollutants at home, in the
workplace and in the atmosphere damage women's health and to develop strategies
to eliminate these environmental hazards.
•
PHS has developed the "Put Prevention into Practice" program to improve the
delivery of clinical preventive serVices including immuniZations, Pap smears and
other screening tests and counseling. The program provides health care
professionals with a kit of materials to assist them in the performance of a broad
range of preventive services for their patients as well as forms for patients and
medical office staff to use to track needed preventive care.
•
The Administration has developed a National Women's Resource Center to provide
information about the prevention and treatment of substance abuse and mental
·
illness.
8-30
•
•
�Case Study: Georgia Ayres
When First Lady Hillary Rodharn Clinton met recently with 250 elderly
South Florida women at the Joseph Meyerhoff Senior Center, Georgia Ayres,
a 66-year-old member of the National Council of Negro Women, participated
with her in a panel discussion. Mrs. Clinton told the audience that the risks
of getting breast cancer increase with age and that Medicare covers regular
mammography screening that could save their lives. The group also talked
about the mammography procedure itself and the reasons for the reluctance of
some women to get mammograms. After Mrs. Clinton's visit, Ms. Ayres told
the Ft. Lauderdale Sun-Sentinel, ''I've never had a mammogram. I've been
afraid because I watched my daughter-in-law die of breast cancer. But now
after this talk, I will go and make an appointment to have a mammogram. "
Case Study: Dr. Laura Esserman
When Dr. Laura Esserman began clinical work with breast cancer patients
at the University of California, she realized that vaccine research she had
previously conducted might be applied to the treatment of breast cancer. She
hoped this would lead to safer, non-toxic treatments for breast cancer that
could be used to treat the disease when it was first detected. The medical
community found her ideas promising, and many scientists agreed to
participate in her research. However, Dr. Esserman was unable to launch the
project because, without preliminary data, she could not obtain a grant from
traditional funding sources. She then found out about the Innovative
Development and Exploratory Awards -- a part of the Clinton
administration's breast cancer research program -- which awarded her two
years of start-up. funding. Her research is now underway and, while it is too
soon to tell if it will lead to treatment breakthroughs, Dr. Esserman says that:
"Without the grant, J would never have gotten the opportunity to find out. "
..
•
8-31
�9. ENVIRONMENT AND PUBLIC
HEALTH
Introduction
We seek to set our course by the star of age-old values, not shortterm expediencies; to waste less in the present and provide more for the
future; to leave a legacy that keeps faith with those who left the Earth to
us. That is the American spirit.
·
President Clinton
Earth Dai 1994
Accomplishments:
'
The modem era of environmental protection began 25 years ago in 1970 with the
ftrst Earth Day, the passage of landmark legislation and the creation of the Environmental
Protection Agency. The results are a great American success story, but much remains to be
done. To succeed in the next 25 years, President Clinton is reforming health and
envirorunental programs to make them work better and cost less, to better protect public
health and to provide lasting opportunity for· generations to come -- and standing up to
those who would roll these programs back.
This introduction includes short descriptions of the President's main environmental
accomplishments, as well as a brief description of this year's priorities. Following the
introduction are three sections that describe the President's record in more detail.
•
•
Reinventing Environmental Regulation. On March 16, 1995, the President
announced a comprehensive set of 25 actions to make envirorunental protection
work better and cost less, including a 25 percent cut in paper work to comply with
environmental standards and a 6 month enforcement grace period for businesses
which act in good faith.
•
Northwest Forest Plan. Put Northwest communities back to work again, while
conserving ancient forests for future generations.
9-1
�•
•
Common Sense Initiative. Launched an effort to make health protection cleaner,
cheaper and smarter by focusing on results rather than one-size-fits-all regulations.
•
California Bay-Delta Water Agreement. Negotiated a consensus plan that will
protect the most valuable economic and environmental resource of the state of
California. The San Francisco Bay and Delta estuary, which supports 120 species of
fish, is also a critical link in a system that supplies drinking water to two-thirds of
the state's people and provides irrigation for 45% of America's fruits and vegetables.
•
Recycling. Signed an executive order to promote recycling, cut solid waste and
create jobs.
•
Community-Right-to-Know. Expanded requirements that companies disclose
information about toxic releases in their area, putting power back into the hands of
the people.
·
•
Protection for the California Desert. Fought for and then signed the California
Desert Protection Act, the largest single designation of parks and wilderness areas
ever in the lower 48 states.
·
•
Environmental technology. Supporting initiatives that increase American
productivity and encourage innovative new solutions to tough environmental
·
problems.
•
Fisheries Management. Responded to developing fisheries crises on both coasts
with improved management programs and economic assistance to families whose
livelihoods are threatened by declining fish stocks.
•
Air Pollution. Implemented an unprecedented measure to reduce by 90 percent the
toxic air pollutants emitted from chemical plants by 1997.
•
Restoration of the South Florida Everglades Ecosystem. Formed a partnership
with the State of Florida that broke a six-year legal logjam and allows the country to
restore the unique ecosystem of South Florida including the ·Everglades and Florida
·say.
•
Wetlands Reform. Reformed the wetlands program to cut red tape, increase
fairness and flexibility for landowners, and protect and enhance the nation's
wetlands.
9-2
•
•
�The President's priorities for 1995 include:
•
Reinventing Government. Following through on a top-to-bottom reform of
environmental regulation to create a new system based on achieving environmental
results, not just complying with bureaucratic procedures.
•
Superfund. Building on a historic coalition that included everyone from the
Chemical Manufacturers to the Sierra Club, to work with Congress again this year to
reform Superfund to clean up toxic sites faster, more fairly and more efficiently.
•
Safe Drinking Water. Reforming the Safe Drinking Water Act to help local water
systems protect their citizens' health and give people tap water they can trust, while
ensuring that the law that governs our drinking water supply is as affordable as it is
effective for our communities.
•
National Parks. Returning the Park Service to a sound fmancial footing and
making the parks the best that they can be without burdening taxpayers, by
reforming concessions practices and revising fee policies.
•
•
9-3
�9A. PROTECTING PUBLIC HEALTH
"Preserving the environment is at the core of everything we have to do in
our own country. Building businesses, creating jobs, fighting crime and
drugs and violence, raising our children to know the difference between
right and wrong, and restoring the fabric of our society. "
President Clinton
Earth Day 1994
Actions to Date
In his first two years in office, President Clinton took the following actions:
•
Reinventing Environmental Regulation. On March 16, 1995, the
President announced 25 actions to make environmental protection work
better and cost less, including a 25 percent cut in paperwork to comply
with environmental standards and a 6 month enforcement grace period for
businesses who act in good· faith.
•
Expanded Community-Right-to-Know reporting to require companies to
tell people about toxic releases in their area. People will have information
about nearly twice as many chemicals as before.
•
Common Sense Initiative. Launched an effort to make health protection
cleaner, cheaper and smarter by focusing on results rather than one-sizefits-all regulations.
•
Promoted recycling, with actions such as an executive order directing the
Federal government --the largest purchaser in the world-- to buy recycled
products.
•
Cut toxic air pollution. The Clinton Administration took an
unprecedented action to reduce by 90 percent the toxic air pollutants
emitted from chemical plants.
9-4
...
�...
Background
"1 want to see a different approach. I want a government that is limited but
effective, that is lean but not mean, that does what it should do better and
simply stops doing things that it shouldn't be doing in the first place, that
. protects consumers and workers, the environment, without burdening
business, choking innovation or wasting the money of the American
taxpayers."
President Clinton
Announcing "Reinventing Environmental Regulation"
March 16, 1995
Twenty-five years ago our nation created from scratch the most advanced system of
environmental protection in the world. The result is a system that is envied and copied
around the globe. Where 25 years ago the roads were littered with boxes and beer cans,
. today we find 5,000 community recycling programs. Lead levels in our children's blood
are down 70 percent. And the bald eagle soars again.
But much remains to be done, and while the current system of environmental
protection has accomplished a great deal, it is reaching its limits. Over the years,
environmental programs evolved into a complex and court-driven system of prescriptive
regulation that often leaves little room for common sense. Increasingly, we pay too much
for too little protection.
The answer is not to roll back health and environmental standards and return to the
smoke and smog of yesteryear. The answer is not to add another layer of complex and
inflexible requirements on top of the existing system -- or to create even more opportunity
for lawsuits. People don't wani a government that spends more of their money in order to
·get less done. People want a government that works .better and costs less.
•
•
It is time to draw upon the lessons we have learned over the last 25 years and ·
reinvent environmen~ protection.. We have learned that the American people are deeply
committed to a clean and healthy environment for their children and communities. We
have learned that pollution is often a sign of economic inefficiency and business can make
money by preventing it.. We have learned that better decisions result from a collaborative
process with people working together, than from an adversarial process that pits them
against each other. And we have learned that standards that provide flexibility --but
demand accountability -- can provide greater protection at .a lower cost.
9-5
�To meet the challenges of the next 25 years, President Clinton is making common
sense reforms to environmental programs to make them work better and cost less. He is
working hard to protect our families' health and to provide lasting economic opportunities
for generations to come. He is cutting through the bureaucracy to focus on results -- and
allowing flexibility along the way. He is moving toward a system based on performance
standards, flexibility and accountability. He is encouraging innovation and common sense.
The Initiatives
''Just as we yearn -to come together as a people, we yearn to move beyond the false
choices that the last few years have imposed upon us. For too long we have been
told that we have to choose between the economy and the environment; between our
jobs; between our obligations to our own people and our responsibilities to the
future and to the rest of the world; between public action and private economy. "
President Clinton
Earth Day 1993
The Clinton Administration .is making environmental programs work better and
holding the line against those who would eliminate them. President Clinton is expanding
the Community-Right-to-Know program to put power back into the hands of the people,
promoting recycling, cutting air pollution and increasing job-creating investments in "green"
technologies. He is moving away from the prescriptive regulations of yesterday to the
results-oriented programs of tomorrow.
Reinventing Environmental Regulation. On March 16, President Clinton announced a
sweeping set of 25 reforms to make environmental protection work better and cost less.
With this package, the President will expand the use of market-based emissions trading
programs, make a 25 percent cut in the paperwork associated with meeting environmental
standards -- a move that will save businesses and communities 20 million hours of work,
cut the reporting system down to one step, create centers to help small businesses comply
with envirorunental programs and give them a 6 month .enforcement grace period when they
act in good faith, give more responsibility to states, tribes and local governments, and save
taxpayers billions of dollars by refocussing priorities for safe drinking water and hazardous
waste. In addition to improving the current system, the President proposed fundamental
reforms --environmental protection for the 21st century. These reforms include Project
XL -- for excellence and leadership -- a pilot project where EPA will allow 50 companies
or communities to replace current regulatory requirements with an alternative system of the
company's design if the company can do it cleaner, ·cheaper. In other words, if you've got
a better way to do it, you can throw out the EPA rulebook.
9-6
..
'
�Common Sense Initiative. The Environmental Protection Agency's Common Sense
Initiative is both the name of a major program and a reflection of President Clinton's
environmental philosophy. It is a reform to move from one-size-fits-all regulations to a
system based on real results, the first program in the next generation of environmental
protection. The approach will achieve results that are cleaner, cheaper and smarter -cleaner for the enyironment, cheaper for business and taxpayers, and smarter for our
children's future.
Community. Right-To-Know. President ·Clinton expanded Community Right-to-Know
laws to protect public health by requiring companies to disclose information about toxic
chemical releases to the public. EPA added 286 harmful chemicals -- nearly doubling ·the
current amount --to the Toxic Release Inventory (TRI). The TRI program lists chemical
releases and makes the data available to the public through outlets such as public libraries.
At the same time, EPA made it easier for small businesses to provide information by
creating a shorter, less time-consuming reporting form. The Community Right-to-Know
program puts power back into the hands of the people.
Environmental Technology. The President's environmental technology initiatives are
helping American business compete more effectively in the fast-growing global markets for
"green" technologies, increasing American productivity, and encouraging innovative new
solutions to tough environmental problems. Vice President AI Gore recently unveiled a
new Rapid Commercialization Initiative to test arid verify the performance of innovative
technologies and get them to the market faster.
Air Pollution. The 100 million Americans who live in areas with polluted air will be able
to breathe more easily. The President is working with States to develop common sense
solutions to our nation's air quality problems and to implement strong new rules under the
Clean Air Act, such as an unprecedented action to cut toxic air pollution from chemical
plants 90 percent by 1997.
Leadership on Risk Analysis. The Clinton Administration is committed to basing its
regulatory decisions on sound scientific evidence and ensuring that the benefits of its
actions justify the costs. The President's executive order on Regulatory Planning and
Review is the cornerstone of these efforts. The President recognizes that there is an
important role for regulation in protecting public health, safety, and the environment for the
American people. At the same time, he insists that government has a basic responsibility to
govern wisely and carefully, regulating only when necessary and only in the most costeffective manner.
Enforcement. EPA reformed its environmental enforcement program. In conjunction with
the DoJ, EPA will get tough with polluters who threaten public health, but work with those
•
9-7
�who act in good faith. The reforms include small business assistance centers and a 6 month
enforcement grace period for small businesses who move quickly to correct violations.
Recycling. To boost recycling, promote environmental technologies, save taxpayers money
and reduce the burden on landfills, President Clinton signed an executive order directing
Federal agencies to purchase recycled and environmentally preferable products. The
Federal government is the largest purchaser of goods and services in the world, and the
Clinton Administration is putting that enormous purchasing power to work for recycling.
Leading by Exa~ple -- Toxics Reduction. President Clinton signed an executive order
directing Federal agencies to cut their use of toxic substances 50% by 1999 and report
those remaining emissions under Community Right-to-Know laws-- a move to open
government that previous Administrations refused to make.
Leading by Example --Energy and Water Efficiency. President Clinton signed an
executive order directing Federal agencies to improve energy and water efficiency wherever
it is cost-effective -- a move estimated to cut the government's taxpayer-funded utility bills
$1 billion annually by the year 2005.
Clean Cars. The Partnership for a New Generation of Vehicles is a historic new
partnership between government and industry. This strategy will strengthen U.S.
competitiveness by developing technologies for a new generation of vehicles up to three
times more fuel efficient than today's -- a significant technological challenge that will
require the introduction of entirely new technologies, rather than incremental improvements.
This initiative will create jobs, spur economic growth and help Detroit continue to lead the
world in auto technology, while reducing oil consumption and air pollution.
9-8
•
�. Case Study: Reinventing Environmental Protection
The Clinton Administration has launched an ambitious new pilot program that is
revolutionizing the way we approach environmental protection. The current system of
environmental regulation has accomplished a great deal, but it is reaching its limits.
EPA is initiating a pilot program to develop a common sense system for the next
generation of environmental protection. ·
Through EPA's Common Sense Initiative, we are bringirig business, community
groups, state and local representatives, and local environmental leaders together to find
common sense, consensus strategies for addressing environmental problems.
This program will help us move beyond confrontation to consensus in solving
this nation's environmental problems. Instead of a focus on speci~c problems caused
on specific problems cause by individual pollutants, we are comprehensively looking at
the overall environmental impacts of entire industries.
The six industries participating in the first phase of the Initiative -- automotive,
computers and electronics, iron and steel, metal fmishing, petroleum refming and
printing -- form a sizable piece of the American economy. Comprising over 11% of
the U.S. Gross Domestic Product and employing nearly 4 million people, these
industries also account for 12.4% of the toxic releases reported by all American
industries in 1992. The six industries share a key attribute: each is committed to
· working with the EPA and with national and grassroots environmental groups to find
cleaner, cheaper, smarter ways to protect public health and our environment.
The Common Sense Initiative reflects the Clinton Administration's commitment
to .setting strong environmental standards while encouraging common sense, innovation
and flexibility in how those standards are met.
This new approach to environmental protection is designed to achieve results
that are cleaner, cheaper and smarter. Cleaner for the environment, cheaper for
business and taxpayers and smarter for America's future .
•
9-9
�Incineration. The Clinton Administration announced a tough new incineration policy that
makes safety the number one priority, encourages industry to reduce waste, strengthens
oversight of existing combustion facilities and tightens requirements for permitting new
ones. New standards for municipal incinerators will result in a 95 percent reduction in
emissions of dangerous pollutants.
·•
Pesticides an.d Food Safety. The President is taking aggressive action to protect children
and reduce the use of pesticides on food. At the same time, his Administration is working
to move safer substitutes onto the market more quickly.
·
Greening of the White House. The President's initiative is making the White House a
model for all Americans to follow -- demonstrating practical steps people can take to
protect the environment, improve the comfort of their surroundings and save money.
Specific actions include energy-efficient lighting, appliances, heating and cooling, as well as
recycling and water conservation -- each of which improve the local environment and save
taxpayers money.
Superfund. President Clinton proposed a major reform of Superfund, the bill that cleans
up toxic dumps. One in four Americans still lives near a toxic dump site 14 years after
Love Canal. Contaminated, neglected land costs communities jobs, development and their
tax base. In the past, too much money that should have gone to clean up toxic dumps was
spent on lawyers instead. Last year, President Clinton brought together in support of his
Superfund reform an unprecedented array of interested parties, from environmental groups,
insurers, businesses and ~ommunities. The Adininistration · will work with Congress again
this year to strengthen the Superfund law based on the following principles: cleanups must
be faster, faiz:er and more efficient; we must promote economic redevelopment in our
communities; less money should go to lawyers and more money should go to cleanups; and
·
the polluter should pay.
.
•
9-10
�Case Study:
EPA's Brownfields Program --Bill Robinson
· "Poor neighborhoods in our cities suffer most from toxic pollution. Cleaning
up toxic waste will create new jobs in these neighborhoods for those people and
make them safer places to live, to work, and to do business. "
President Clinton
Earth Day, 1993
In his flrst Earth Day message, President Clinton committed to revitalize urban
communities by cleaning up abandoned pieces of contaminated land· that are a blight to
our communities, a threat to our health, and a terrible obstacle to economic growth.
The EPA Brownfields program is an innovative Administration initiative that
awards grants to cities to redevelop contaminated land --creating jobs and returning
the land to productive community use. With the money provided by the grants, cities
can promote economic development the way the local community believes it will work
best. The program brings together people who live near contaminated land, businesses
that want to get land cleaned up, community leaders, investors, lenders and developers.
Like many hard working Americans, Bill Robinson had a difficult time when
his company relocated and he was unemployed for eight months. A forty year old
man with three children depending on him, Mr. Robinson felt discouraged and· had few
prospects in Cleveland's depressed economy.
As part of a Brownflelds grant to the City of Cleveland, Mr. Robinson now
.works as a Warehouseman Order Selector at Dedicated Transport, Inc. He is fllling
one of one hundred new trucking and warehouse· jobs created by the redevelopment of
contaminated, abandoned property in Cleveland. Dedicated and its sister company
hope to employ another 100 people within the next year.
This initiative captures the best of what we can do together to revitalize the
cities of this country. It is a common sense, cost-effective way to redevelop
contaminated land and return it to productive community use, create jobs and preserve
the green area outside our cities.
••
Safe Drinking Water. Safe drinking water is easily the biggest environmental concern of
America's working families. Across the country, people are worried that they can no
longer take the safety of their drinking water for granted. A year ago, millions of residents
9-11
�of major U.S. cities -- such as Milwaukee, New York and Washington, DC -- were ordered
to boil their water. One year after thousands of people got sick and 100 died after drinking
contaminated tap water in Milwaukee, President Clinton proposed to reform the Safe
Drinking Water bill to help local water systems protect their customers' health and give
people tap water they. can trust. The Administration will work to ensure that the law that
governs our· drinking water supply is as affordable as it is effective for our communities.
The President will work with Congress again this year to improve the Safe Drinking Water
Act and provide resources to communities so that they can do the job of keeping their
citizens safe.
•
•
9-12
•
I
�98. TAKING RESPONSIBILITY
·FOR OUR'lAND AND WATER
•
''All across this country, there is a deep understanding rooted in our
religious heritage and renew~d in the spirit of this time that the bounty of
nature is not ours to waste. It is a gift from God that we hold in trust for
future generations.· Preserving our heritage, enhancing it, and passing it
along is a great purpose worthy of a great people. "
President Clinton
Earth Day 1993
•
•
9-13
�...
Actions to Date
During his first two years in office, President Bill Clinton:
•
Developed a Northwest Forest Plan to put communities back to work
again and conserve ancient forests for future generations.
•
Developed reforms to exempt small landowners from wetlands and
endangered species laws.
•
Reached an agreement with the state and water users over California BayDelta Water, the most valuable environmental and economic resource in
the State of California.
•
Reached an agreement with the State of Florida to restore the Everglades,
home to more than 50 threatened or unique species, including the Florida
·
Panther.
•
Signed the California Desert Protection Act, the largest single designation
of parks and wilderness areas ever for the lower 48 states.
•
Reformed the Wetlands Program to cut red tape, increase fairness and
flexibility for landowners, and protect and enhance the nation's wetlands .
.Background
"If there is one commitment that defines our people, it is our devotion to the rich
and expansive land we have inherited From the first Americans to the present day,
our people have lived in awe of the power, the majesty, and the beauty of the forest,
the rivers, and the streams of America. "
President Clinton
Earth Day
April 21, 1993
..
•
9-14
�The American conservation ethic dates back to the very first days of our country's
history and to the farmers, hunters and fishermen who made our country great. Americans
have always understood that if they want their children to continue farming or fishing at a
living wage, they must look after the land and the water. And we have always felt a deep,
moral duty to be responsible caretakers of the Earth for those who come after us.
A century ago, Congress created the world's very first national park at Yellowstone.
As American as baseball and jazz music, national parks are an idea that virtually every
nation has since copied. The national parks are one of America's greatest treasures; their
beauty is unsurpassed.
A century later, resource management of our land and water requires a new
approach beyond simply setting it aside. We can use our resources both for. economic
development today and to fulfill our responsibilities to the future, but only with careful
planning and commitment. Where economic needs and environmental imperatives come
into conflict, it is usually the re~ult of poor management or a failure to make tough
decisions until a situation gets so bad it can no longer be ignored.
President Clinton inherited a number of these poorly managed situations -- looming
crises brought on by the Federal government's refusal to assume its share of the
responsibility for looking after our nation's land and water. In the Pacific Northwest, the
Federal government failed to set up a responsible old-growth forest management plan, and a
judge blocked all timber cutting on those lands -- a drastic blow to timber-dependent
families. In New England and the Northwest, fisheries collapsed following years of
pollution, overfishing and changes in climate patterns -- a drastic blow to the men and
women who were dependent on the industry.
President Bill Clinton is standing up for those families. Rather than ignoring these
crises, President Clinton went to work and addressed them directly. Issue after issue -from California water use to the Florida Everglades -- he is fmding solutions where others
had seen only problems.
The Initiatives
"If we have the vision, the will and the heart to make the changes we must, we can
•
still enter the 21st century with possibilities our parents could not even have
imagined and enter it having secured the American Dream for ourselves and for
future generations. "
·
President Clinton
February 17, 1993
9-15
�President Clinton promised that he would take responsibility for our places of
natural beauty and ecological significance; that he would look out for our national parks,
national marine sanctuaries, wilderness areas, old growth forests and wetlands; that he
would support programs that put people to work today and contribute to a better world
tomorrow. During his first two years in office the President developed a forest plan for the
Northwest, helped fishermen get back on their feet again, reached a historic agreement to
manage California water and signed the California Desert Protection Act.
•
Northwest Forest Plan. For years, mismanagemen~ and conflict over timber cutting in
public forests threatened the livelihood of people in the Pacific Northwest. To put an end
to the gridlock and put people back to work, President Clinton convened the Forest
Conference in Portland, Oregon, shortly after taking office. For the first time, he called ·on
environmentalists, timber companies and citizens as well as states, tribes and local
governments to come together around one table to hammer out a solution. The President's
Northwest Forest Plan is forcing government agencies to work together to restore the
economic health of the region's communities and the vitality of the region's ancient forests.
The Administration is awarding more than $1.2 billion in grants and loans over five years
to more than 100 communities throughout the region to help people through their period of
transition, and putting people to work with more than 600 watershed restoration projects to
protect the environment for years to come. The President's Forest Plan was recently upheld
by the judge who earlier blocked all cutting. Thatmeans that for the first time since 1991,
forest management is out of the courtroom and back in the communities where it belongs.
California Bay-Delta Water Agreement. In a triumph of common sense over politics-asusual, the President recently reached an agreement with the State of California and farmers,
urban interests and environmentalists to protect the San Francisco Bay and Delta. Under
the agreement, the state will set water quality standards to protect the health of the natural
environment and the health of the region's communities. The agreement is a boost for the
regional economy, bringing a reliable water supply to water users across the state. The
agreement comes after decades of conflict over water, most critical of·Westem resources.
The Bay-Delta estuary is a critical link in a system that supplies drinking water to twothirds of the state's population and provides irrigation water for 200 crops, including 45
percent of the nation's fruits and vegetables. This estuary, which supports 120 species of
fish, is one of the Nation's most diverse wetlands habitat.
Restoration of the South Florida Everglades Ecosystem. The Administration and the
State of Florida launched an unprecedented partnership in 1993 to restore the Everglades,
Big Cypress, and Lake Okeechobee. The tourism-based economy of South Florida depends
significantly on the health of this natural environment. The area is home to five million
people and more than 50 endangered or threatened plants and animals, including the Florida
Panther, the Bald Eagle and Audobon's Crested Caracara. In recent decades, wetland
habitat areas have declined 50 percent and populations of wading birds such as the Snail
9-16
.
�Kite and Wood Stork have declined 90 percent. Public water supplies along the coast are
increasingly vulnerable to salt water intrusion due to losses of fresh water. Commercial and
recreational fisheries in Florida Bay have declined dramatically in recent years. This
partnership ends years of litigation and will improve both the quality and the quantity of
water -- helping to preserve these national treasures and keep the Florida economy strong.
California Desert Protection. In October 1994, the President signed the historic California
Desert Protection Act, to preserve for future generations a resource of extraordinary and
inestimable value. It is the first time since 1980 that the United States has set aside so rich
and vast an area -- public desert lands that include broad vistas, rugged mountain ranges
and unique archeological sites. The Act designates 7. 7 million acres of federal lands as
wilderness and adds three. million acres to the National Park System, including magnificent
lands next to the Death Valley and Joshua Tree National Monuments, both of which now
become National Parks.
Building Sustainable Fisheries. President Clinton responded rapidly to developing
fisheries crises in New England and the Pacific Northwest. To help communities in the
short run, he is taking the unprecedented step of providing economic adjustment assistance
to several thousand people whose jobs are affected by the crises. For the long run, the
effort includes an improved fisheries conservation program to manage the stocks and ensure
lasting work for fishermen.
Wetlands Reform. The President developed a bold reform package for the nation's
wetlands protection program that reflects the vital need for effective protection and
restoration of the nation's wetlands, and includes much needed reforms to increase the
fairness· and flexibility of Federal regulatory programs for landowners. Significantly, the
reforms essentially relieve homeoWners of the need to apply for wetlands permits to build
or modify their homes. The reform also includes a more active role for states, tribes and
local governments. Finally, the Administration set a goal not only of "no net loss" of
wetlands, but also of restoring wetlands that had been previously lost. Wetlands filter and
cleanse water, buffer against flooding, and are among the most prolific ecosystems in the
world; we have lost more than one-half of the wetlands in the lower 48 · states since
Colonial times .
•
9-17
�Case Study:
Northwest Forest Plan --Economic Revitalization
''It is time to break the gridlock that has blocked action and bring all sides
together to craft a balanced approach to the economic and environmental
challenges we face. "
President Clinton
March I 0, 1993
When President Clinton convened the Forest Conference in Portland, Oregon in April
1993 he did it to ·break the gridlock over forest management that had tied up the region's
economy for years. His forest plan is protecting public forests for future generations and
giving new life to local communities. · With the Northwest Economic Adjustment Initiative
of the forest
plan, he is helping people hurt by the forest crisis get back on their feet.
I
•
The Initiative is comprehensive. President Clinton's program is putting people to
work, providing worker training, and giving assistance to families, communities and
businesses. The result is better government that works for people:
In Sweet Home, Oregon, dislocated timber workers are receiving training, on-thejob experience, and family wages as they work to restore valuable watersheds.
In Weaverville, California, Federal grants and loans are at work building a new.
sewage treatment system that will protect the community's health and provide for a more
certain economic future.
In Forks, Washington, money from state sources and Federal agencies is helping
to build a secondary wood products manufacturing center that will breathe n~w life into
this traditionally timber-dependent community's economy.
In Douglas County, Oregon, an .area hit hard by the decline in timber harvests, the
Roberts Creek Water District has lacked an adequate supply of treated water. As a result,
the District placed a moratorium on new development in 1992, making it hard for people
to go back to work in new jobs and making it hard for the District to provide acceptable
fire protection to the area. With assistance from the forest plan and :from the state the
District will now be able to fund the water treatment plant expansion. Already, the
Ingram Book Company has committed to locating in the District -- a commitment that
will translate into 200 new jobs.
,.
AmeriCorps -- National Service and the Environment. Young people in AmeriCorps,
President Clinton's national service program, are giving more than 10 million hours of
direct service in environmental protection.· Nearly one-third of the 20,000 AmeriCorps
9-18
�members are working in urban neighborhoods and rural landscapes to eliminate
environmental hazards and conserve natural resources.
•
Recovery of the Bald Eagle. On July 4, 1994, the Administration proposed to take the
· bald eagle off the endangered species list. This success story reflects 30 years of hard work
to save the bald eagle --the symbol of America's freedom.
Strengthening the National Parks. The President is taking strong action on behalf of
America's National Parks. He proposed a funding increase of 18 percent for the Park
Service operations in his first budget, and is pushing to reform concession contracts to give
taxpayers a fair share of the profits made by vendors in the parks. Currently, the average
concessionaire pays less than 3 percent of revenues for the exclusive right to sell products
to park visitors -- a rate far below what most businesses would be willing to pay. Raising
that rate by a small amount would bring millions into the parks. '
Reform of Endangered Species Protection. Our Nation's plants and animals are treasures
we hold in trust for future generations. When environmental protection has collided with
economic growth, the cause has often been poor administration of laws such as the
Endangered Species Act. The President is committed to innovative administration of these
laws to avoid crisis management and make them work, without burdening small
landowners. For instance, the Administration recently announced general exemptions from
ESA enforcement for most activities on single home residential tracts and for other
activities that affect less than five acr.es .
•
9-19
�Case Study:
Ruben Alarcon -- AmeriCorps
"In our own lives, in our own ways, each of us has something to offer to
the work of cleaning up America's environment. And each of us surely has
something very personal to gain. "
·
President Clinton
Earth Day 1993
•
Luis Ruben Alarcon is working in low-income areas in and around El Paso,
Texas, along the Mexican border. He is joining other AmeriCorps members and
the Retired Senior Volunteer Program to clean up the area's water and protect his
neighbors' health.
"AmeriCorps has provided me a great opportunity to get hands-on training
in the field of environmental protection," he says. "It also allows me to participate
in our community, something I believe in firmly."
Ruben turned down a full scholarship at M.l. T. in order to stay in El Paso
and help provide for his mother, a new U.S. citizen with a third grade education,
who works at a maquiladora for the minimum wage. He studies chemistry and
engineering full-time at the University of Texas El Paso, dedicates himself to
serving his community through AmeriCorps and holds down an additional job to
provide for his mother.
"I can't thank AmeriCorps enough for this opportunity," he says. "I feel
like I belong to something that's very important, something that's much bigger
than me."
The region's two million people rely on groundwater sources of drinking
water that are increasingly contaminated. According to local health officials, a
large number of the health problems they see appear to be caused by polluted
water. Ruben and the AmeriCorps members are working to change that and to
protect the health of his community.
•
Flood Prevention. The Administration is examining new approaches to flood damage
reduction and flood plain m~agement, the need for which was highlighted by the ·recent
floods in the Midwest, the South and California. Our goal is to protect the safety of all
9-20
�•
Americans in flood-prone areas and reduce economic damages associated with floods in an
environmentally sensitive manner .
..
9-21
�..
9C. INTERNATIONAL ·LEADERSHIP
•
"The nations of the. world are· working together to achieve what is now
called 'sustainable growth' -- growth that meets the needs of the present
without sacrificing the needs of the future. It's an ethic as modern as
microprocessors and as old as the Scriptures. "
President Clinton
Earth Day 1994
Actions to Date
During his first two years, the President:
•
Expanded U.S. environmental technology exports to put Americans to
work cleaning up the global environment.
•
Helped forge international consensus on a global plan to slow population
growth.
•
Created the GLOBE program to give students a better way to learn about
sc1ence.
•
Signed the Biodiversity Treaty to preserve irreplaceable genetic resources
from the world's plants and animals.
.
9-22
�•
•
Background
"We haye to work to stop famine and stabilize population growth and prevent
further environmental degradation . . . None of us can live without fear as long as
so many people must live without hope. That's why we 're working around the world
to protect fresh water resources, to preserve forests, to protect endangered species,
leading a fight for strong environmental protection in our global negotiations on
trade."
·
President Clinton
Earth Day 1994
With the end of the Cold War, tension over scarce natural resources and
environmental degradation is increasing, threatening to erupt into regional conflicts that
could harm US interests. While computers move more than a trillion dollars through the
world's fmancial markets every day, one billion of the world's citizens live in abject
poverty, more than two billion people have no access to sanitation, and every day 40,000
human beings --mostly children --die of hunger, malnutrition or unsafe drinking water.
At current rates, 90 rillllion people will be added .to the world every year -- the
equivalent of a New York City every month. Although we have made great strides in
protecting our natural environment, air and water pollution, deforestation, declining fish
catches and the loss of biodiversity continue to be grave problems. If the poorer nations of
the world grow to match resource-use patterns of the developed world, we would .need 10
times the current amount of fossil fuel and approximately 200 times the mineral wealth.
Meanwhile, soil scientists have estimated that an area equal in size to China and India
combined have experienced soil deterioration since World War II. In a world of
increasingly scarce basic resources, conflict is more likely. It is in every American's best
interest for the United States to assume a position of global leadership in protecting the
international environment.
9-23
�The Initiatives
"Working together, we can ensure that the world we leave to the future holds the
same promise and opportunity as the one we inherited from the past. "
President Clinton
March 14, 1994
President Clinton and Vice President Gore have helped ensure that America lead the
world, not follow, on global environmental issues.
Environmental Technologies Export Strategy. For the first time, U.S. fmns cari rely on
support from the Federal government in opening overseas markets for environmental
technologies. The President's strategy is to work with business, accelerate technology
development, improve export financing, and coordinate the 20 or so federal agencies who
currently have roles in this area. The strategy targets specific markets such as MeXico,
where the elimination of 20 percent tariffs on environmental technologies through NAFTA
and an urgent need for environmental solutions are creating strong demand.
Population. At the 1994 International Conference on Population and Development in
Cairo, the United States helped forge a historic consensus on a global program to slow
population growth. The approach includes increased availability of family planning
services, a commitment to improving women's health, the empowerment of women, and a
reduction in infant and child mortality.
GLOBE. Vice President AI Gore launched the Global Learning and Observations to
Benefit the Environment (GLOBE) program to give schoolchildren a better way to learn
about science. GLOBE will create a worldwide network of K-12 students who will work
under the guidance of teachers to make environmental observations near their schools,
report their data to a GLOBE processing facility and view images created from worldwide
GLOBE data in their classrooms.
.
9-24
�•
•
Case Study:
Environmental Technology Exports
"There is now a $200 billion to $300 billion market for environmentallyconscious products . . . Last October, we started our strategy to help
American companies, large and small, get their share of that market. If
your company makes a product or offers, a service that will protect the
environment all over the world, you can find capital, customers and expert
advice."
President Clinton ·
Earth Day 1994
On September 28, 1994, Radian Corporation won a $2.5 million contract in
Thailand, thanks in large part to the President's initiative to promote
environmental technology exports. With the bid, Radian will provide· equipment,
systems integration and support services for the first eight ambient air monitoring
stations in Thailand.
Radian won the contract with effective export promotion assistance -- six
Federal agencies combined to provide key promotional, fmancial and advocacy to
help them close the deal. As a result of the contract, Radian may be able to open
a Southeast Asia regional office to expand its Asia sales.
Whale Conservation. The United States succeeded in gaining support to create a whale
sanctuary in the Southern Ocean around Antarctica, where commercial whaling will be
prohibited. The 11.8 million square mile area covered by the sanctuary is adjacent to an
existing Indian Ocean sanctuary; together these two sanctuaries are home to three-quarters
of the world's whales. Programs such as these work -- the California Grey Whale was
recently removed from the Endangered Species List because the population has returned to
pre-whaling levels.
.
Climate Change Action Plan. The Administration is implementing a comprehensive
national strategy to reduce greenhouse gas emissions to 1990 levels in the year 2000 -- a
commitment p:J;"evious administrations were unwilling to make. The Climate Change Action
Plan saves government and industry money and spurs economic growth. In. one
Department of Energy program, more than 800 of the nation's electric utility companies
have already signed voluntary pledges to limit greenhouse gas emissions under the Action
Plan.
9-25
�Biodiversity Treaty. Winning praise from environmentalists as well as the agriculture,
pharmaceutical and biotechnology industries, the President signed the Convention on
Biological Diversity, an international agreement to stem the extinction of species and
preserve irreplaceable genetic resources for medicines and other valuable products.
Ocean Dumping. The United States took the lead among the world's nuclear powers and
achieved a global ban on ocean dumping of radioactive waste at the London Convention.
The U.S. was the first of the nuclear powers to advocate the ban.
NAFTA. The President negotiated a strong side agreement to protect the environment and
helped pass NAFTA with the support of a large portion of the environmental community.
The treaty sets a new environmental standard for trade agreements. Innovative "green"
provisions will help protect the environment and improve the quality of life on both sides
of the border.
Development Financing. The United States is leading the fight for environmental reforms
in the World Bank and other multilateral financial institutions. One result is a new World
Bank policy that gives affected people access to information and environmental assessments
on major projects. The United States also put forward the blueprint for restructuring the
Global Environmental Facility, making it more democratic and more accountable.
Summit of the Americas. The Summit of the Americas focused on three central themes:
strengthening democracy, expanding hemispheric economic integration, and promoting
sustainable development.· Economic prosperity and social progress can only be achieved if
the health ofthe people is protected and natural resources are used responsibly. The
President forged historic agreements with all leaders in the Americas to achieve lasting
opportunities for all.
Desertification. On October 14 the United States signed the United Nations Convention to
Combat Desertification. The Convention marks an important step for the U.S., France and
other developed countries in our efforts to work with Africa and other developing areas to
rebuild and protect their resources as they develop a sustainable economy.
9-26
�10. _A STRONGER, HI-TECH,
DEREGULATED ECONOMY
•
•
Introduction
The Clinton Administration has moved on a variety of fronts to build the kind of
high-investment economy that will secure this nation's economic leadership as we near the
threshold of a new century. The Administration is pursuing a broad-based strategy that (i)
improves the physical infrastructure that serves as the arteries of our economy; (ii)
prOJ:?lOtes the development of cutting-edge technology, including the information
superhighway; (iii) removes unnecessary regulations in a variety of businesses from
interstate banking to local trucking; and (iv) champions the interests of small business.
In its first two years, the Clinton Administration has made important strides:
..
•
Infrastructure. It has increased public investment in infrastructure while
cutting the federal budget deficit for three years in a row, increasing core
highway and mass transit grants, rail transportation in the Northeast Corridor,
facilities and equipment for the air traffic control system, and assistance to
help states improve their environmental facilities.
•
Information Superhighway. It is working to promote competition and to
remove regulations in the high-technology communications business, speeding
the development of an information superhighway that will connect our
businesses, classrooms, libraries, hospitals and clinics as we approach the
21st century.
•
Technology for Economic Growth. It has promoted the development of
technology through incentives for private sector investment, establishing
government-industry partnerships in crucial technologies, and maintaining our
historically strong support for basic research.
•
Interstate Banking. It has lifted the outdated, artificial restrictions on
interstate banking, boosting the competitiveness of the banking industry,
while enhancing efficiency, and the supply of credit and customer service .
10-1
�•
Intrastate Trucking. It has extended the deregulation of the trucking
industry from interstate deregulation, which began in 1977, to intrastate
deregulation, reducing paperwork and increasing competition within state
markets.
•
Small Business. It has advanced the cause of small .business through a fourpart strategy focussed on improving access to capital; creating incentives for
investment; improving the regulatory environment; and expanding access to
new markets.
•
.
10-2
�10A. IMPROVING THE NATION'S
INFRASTRUCTURE
•
Actions to Date
•
The President has increased federal funding for infrastructure investment
while cutting the budget deficit for three years in a row. Federal funding
increased for investments in:
- core highway and mass transit formula capital grants,
- research on "smart cars/smart highways" that use advanced technology to
reduce congestion and speed traffic flow,
- rail transportation in the Northeast Corridor,
facilities and equipment for the nation's air traffic control system,
- assistance targeted to environmental facilities on our borders and in cities
that meet stringent criteria.
•
To speed modernization of the Nation's air traffic control system, the
Administration proposed that the Federal Aviation Administration (FAA)
transfer its air traffic control service to a wholly-owned government
corporation. Exemptions from many federal procurement, personnel and budget
restrictions would provide much needed flexibility.
•
In December 1993, the Clinton Administration submitted legislation to designate
a National Highway System (NHS). The NHS would focus "federal resources
on an interconnected system of high-priority highways to serve both economic
and national security needs.
•
The Clinton Administration has fought to expand State Revolving Funds so that
states and localities could better meet the requirements of the Safe Drinking
Water Act.
10-3
�Background
· "A smoothly functioning transportation system is a fundamental building
block of a growing economy and a prosperous society. The ability to move
people and materials safely and efficiently affects the price of goods in our
markets, our ability to sell products overseas, and the lives and livelihoods of
all Americans. The decisions we make now in transportation will serve as
the catalyst for improving both the safety and quality of life for our citizens
for decades to come. "
President Bill Clinton
May 16, 1994
Proclamation 6689
National Transportation Day
President Clinton has worked to increase the public investment that is crucial to our
nation's economic well-being. Like private investment, public spending on infrastructure -such as roads and highways, water resources projects, and environmental facilities -- lowers
firms' costs and increases their productivity, thereby improving their ability to compete in
the global ecoriomy.
Public infrastructure investments also promote our quality of life in a variety of
ways, such as protecting our environment. Between 1972 and 1992, the percentage of
waterways that met the goals of the Clean Water Act rose from about 30 percent to about
60 percent, largely because of investments by federal, state and local governments in
wastewater treatment facilities.
The Initiative
"This new era requires a new way of thinking about transportation needs.
The challenges we face in today 's transportation arena involve making what
we have already built work better. By reinforcing and modernizing the
existing infrastructure, we can create jobs, spur even more technological
development, and fuel long-term economic growth. "
President Bill Clinton
May 16, 1994
Proclamation 6689
National Transportation Day
10-4
�.
In the next two years, the Administration will seek fundamental changes in federal
programs designed to improve the nation's infrastructure facilities. These changes would
give States and localities far greater control over the use of federal infrastructUre grants, and
focus the efforts of federal agencies on their core missions.
The most fundamental changes would occur in our transportation program. The
Administration's proposal includes complementary components that would further the core
principles of the 1-991 Intermodal Surface Transportation Efficiency Act (ISTEA) -providing State and local communities with the flexibility that they need to use Federal
transportation funds most efficiently; and integrating all forms of transportation into a
seamless web that will serve America well into the next century.
The principal components in the AdmiJristration's proposal include:
•
Unified Transportation Grants. The Unified grant would give States and local
communities unprecedented flexibility in deciding how to invest the bulk of Federal
transportation funds. More than 30 categorical grants would be consolidated into a
single program that could be used for the construction or repair of any highway,
mass transit system, passenger or shortline-freight rail, or airport facility. Instead of
tying all funding to specific types of transportation, and forcing State and local
communities to choose transportation solutions based on available funding, the
Unified grant would allow States and localities to tailor the mix of transportation
investments to the particular needs of each community. The program would secure
essential Federal interests through a limited nwnber of set-asides (one set-aside, for
example, would ensure the maintenance and improvement of the Interstates and the
new National Highway System.) A transition program would honor commitments
made under current _programs for specific state and local projects.
•
State Infrastructure Banks (SIBs). Federal grants that capitalize a network of SIBs
would allow States and localities to leverage public and private resources, thereby
achieving a greater level of infrastructure investment from a given amount of federal
spending.
·
Under the Administration's proposal, the Federal government would provide SIBs
with seed money of $2 billion per year. SIBs would be allowed to leverage these
Federal funds not only by issuing bonds securec;l with Federal grant money, but also
by using the funds to support public:private partnerships. With Federal
capitalization graJ!ts, SIBs would be able to institutionalize public-private
partnerships and to provide the specially-tailored financing that such partnerships
need to succeed.
10-5
�•
Discretionary Grants. These funds would be targeted at strategic transportation
projects of national or regional significance that States and localities could not
initiate without Federal aid or coordination. Retaining these discretionary funds at
the Federal level would advance national projects that otherWise might be stymied
by inadequate local resources or the inability of multiple jurisdictions to resolve their
differences without Federal assistance.
•
The Administration will press for action on other infrastructure programs:
•
The Administration will seek enactment of its legislative proposal to modernize the
air traffic control system by transferring it from the FAA to a wholly-owned
government corporation, free from unnecessarily restrictive procurement, personnel
and budget rules.
•
The Clinton Administration will seek $1 billion over 10 years to maintain a modem
U.S. Merchant Marine at levels needed to protect U.S. national security interests.
•
The Administration will continue to seek Congressional authorization to capitalize
State revolving funds that would be used to finance the State and local facilities
needed to meet the requirements of the Safe Drinking Water Act.
•
To meet rural needs .more effectively, the Administration will propose providing
more flexibility in the allocation of loans and grants for rural water and
wastewater disposal. This should enable State Directors to target Federal assistance
to the highest priority programs.
•
The Bureau of Reclamation will shift its emphasis from construction to resource
management. For example, the Bureau's construction program would include funds
to promote water conservation and help restore native fisheries on the Columbia
and Snake Rivers in the Pacific Northwest and the rivers of California's Central
Valley.
•
Based on a comprehensive review of all small watershed projects, the Department
of Agriculture will 'fund only those projects that have local support, meet high
environmental standards, and achieve high economic and ecological ·returns. In
addition, the Administration will seek legislative changes that allow the small
watershed program to emphasize nonstructural measures to restore waterways, water
quality, riparian habitats, and wetlands.
10-6
•
�.
108. THE INFORMATION SUPERHIGHWAY
"... we must also work with ~he private sector to connect every classroom,
every clinic, every library, every hospital in America into a national
information superhighway... instant access to information will increase.
productivity, will help to educate our children...provide better medical care
.. .[and] create jobs."
President Clinton
January 25, 1994
State of the Union
~·
10-7
�Actions to Date
•
The Presidenf gave a boost to the wireless industry by signing into law the Emerging
Telecommunications Technology Act. By giving the FCC the ability to auction
spectrum, this legislation will reduce the deficit by more than $12 billion while
creating new wireless industries and over 300,000 new jobs.
•
The White House is now "on-line." Using the Internet, Americans can send e-mail
to the President and Vice President, take a virtual tour Qf the White House, and
access any one of 3,000 White House documents. Over 400,000 people used this
service in the first two months that it was available to the public. Over 10,000
people access the White House Web Server every day.
•
The Administration is working with Congress to reform the Communications Act of
1934. By promoting competition between telephone companies and cable
companies and eliminating outdated regulations, this legislation will lower prices for
services, give customers more choice, and accelerate private sector investment in the
information superhighway.
•
The President and Vice President have set a goal of connecting every classroom,
library, hospital and clinic to the information superhighway by the year 2000. This
challenge has already motivated communities acrqss the country to form partnerships
between the private sector and government to meet this goal.
•
The Administration is promoting applications of this technology in areas such as
health care, education, training, manufacturing, and delivery of government services,
and is working to ensure that these applications are accessible in rural communities
as well as the inner cities. This is being accomplished through programs like the
Telecommunications Inforii?-ation Infrastructure Assistance Program.
•
The Administration is continuing to invest in the High Performance Computing and
Communications Program, a research initiative designed to keep _America at the
cutting-edge of these 21st ·century technologies.
Background
For many years, the U.S. telecommunications system was dominated by a private
monopoly. American consumers bought their phone equipment, residential telephone
10-8
•
•
..
�.-:
service, and long-distance service from a single company. With the break-up of AT&T in
1982, this began to change. The market for telecommunications equipment became much
more competitive. Companies such as MCI and Sprint began to compete against AT&T.
Since divestiture,· prices for long-distance service have fallen by 50 percent, investment in a
digital, fiber-optic network has been accelerated, and U.S. consumers have more and better
choices. The challenge now is to introduce competition in those markets still dominated by
monopoly, such as local telephone service and cable television.
The U.S. infrastructure for communications is moving far beyond traditional
telephone networks. The Internet computer network, which was started by the Defense
Department's Advanced Research Projects Agency in the late 1960's, now connects 20 to
30 million users all over the world. People use this network to send and receive e-mail,
share information through specialized news groups, and browse through on-line electronic
libraries. Although this network was originally funded by the federal government for
research and education pUrposes, the Administration has encouraged the private sector to
take the lead in expanding the network on a commercial basis.
These two trends -- competition and the development of new services and new
technologies --will accelerate as we move toward the 21st century. The "information
superhighway" will eventually allow us to send and receive voice, video and data over .
high-speed networks. President Clinton and Vice President Gore believe that these new
information and communications technologies will revolutionize the way Americans work,
learn, live, and communicate with each other. The infomiation superhighway will be
composed of: high-speed networks, devices such as computers, interactive televisions, and
video-phones, the information and services available over these networks, and the skills that
are required to build and use these networks.
The implications of the information superhighway go far beyond 500 channels of
TV. In some areas:
~
·•.
•
Students can tap into digital libraries open 24 hours a day, and collaborate on
science projects with other students all over the world;
•
Americans in rural areas have access to the best medical advice in the country
through telemedicine;
•
Workers can acquire new skills through on-line, interactive courseware;
•
Citizens have easy access to government information and services, making
government open, responsive, and user-friendly; and
•
New industries are spurring economic growth and the creation of high-wage jobs.
10-9
�The Initiative
Unlike the Interstate Highway System, the information superhighway is being built,
owned, and operated by the private sector. The role of government is to act as a catalyst.
The Clinton Administration is taking a number of important steps to promote the
information highway:
•
The Administration is working with Congress to reform our nation's
communications laws. By promoting competition between telephone companies and
cable companies and eliminating outdated regulations, this legislation will lower
prices for services, give customers more choice, and speed up private sector
investment in the information superhighway. The Council· of Economic Advisors
estimates that passing legislation could increase GOP by $100 billion over the next
decade, while generating 500,000 new jobs.
•
The President and Vice President have set a goal of connecting every classroom,
library, hospital and clinic to the information superhighway by the year 2000. This
challenge has already motivated communities across the country to form partnerships
. between the private sector and government to meet this goal.
•
The Administration is promoting applications of this technology in areas such as
health care, education, training, manufacturing, and delivery of government services.
•
The President gave a boost to the wireless industry by signing into law the Emerging
Telecommunications Technology Act. By giving the FCC the ability to auction
spectrum, this legislation will reduce the deficit by more than $12 billion while
creating new wireless industries.
•
The federal government is now "on-line." Using the Internet, Americans can send email to the President and Vice President, take a virtual tour of the White House, and
access any one of 3,000 White House documents. Students and teachers can get
educational resources, such as information on student loans and the Administration's
Goals 2000 initiative. Entrepreneurs seeking to start or expand small businesses can
get information on financing offered by the Small Business Administration, or on
technologies being developed .at our National Labs.
10-10
�•
The Administration is continuing to invest in the High Performance Computing and
Communications Program, a research initiative designed to keep America at the
cutting-edge of these 21st century technologies.
Case Study:
Making Learning Exciting -- Preparing Our Children For The 21st
Century·
The Administration is expanding the use of the information highway in the .
classroom by putting more information on-line, encouraging states and communities to
use technology· as a powerful tool for educational reform, and funding pilot projects to
demonstrate that technology can improve student performance. Initiatives at. the
Department of Education and the National Telecommunications and Information
Administration are helping schools connect to the Internet and other on-line services.
Fortune recently concluded that "from Harlem to Honolulu, electronic networks
are sparking the kind of excitement not seen since the space race .. .In scores of programs
and pilot projects, networks are changing the way teachers teach and students learn."
Access to computer netWorks is already making a real difference in many
schools. Students can take "virtual;' field trips to art galleries and museums, "do" real
science instead of just reading about it, and collaborate with their peers all over the
world. Teachers can exchange lesson plans and keep parents more informed about the
progress of their children. Listen to an educator in rural Texas on the impact networks
are having in the classroom:
...
"Since we are trying to prepare kids for a world of which we can't conceive, our
job as educators MUST be to teach kids how to learn, how to access information, and
how to accept change... Many of the school districts in my region are small and lack the
resources and specialized personnel of the larger districts. TENET (Texas Education
Network) can help balance those scales. The smaller districts can now access NASA,
leave messages for the astronauts, browse around in libraries larger than any they will
ever be able to visit, ... discuss world ecology with students in countries around the
world, read world and national news that appears in newspapers that are not available in
their small towns, work on projects as equals and collaborators with those in urban
areas, and change the way they feel about the size of their world. This will create
students that we could not create otherwise. This is a new education and instruction."
10-11
�Case Study:
Empowering Americans With Disabilities
In 1994, the Commerce Department awarded a grant to the World
Institute on Disability to expand access to the information superhighway for
Americans with disabilities. Working with industry, the Institute and its partners
will help ensure that new information technologies will be designed to expand
access for Americans with disabilities. This can make all the difference.
"I am a CS quadriplegic living in Silicon Valley and ... have been disabled
for ten years from a motor vehicle accident in 1983. I use computer
telecommunications .daily in numerous different functions. Telecommunications
has opened up a new world, allowing me to communicate via e-mail with
colleges, government agencies, and organizations. The future success of
telecommunications is phenomenal, especially for the disabled community. It not
only allows a person unable to go out into the community to access endless
amounts of information, but also permits disabled persons, such as myself, to
eventually return to the workforce (via telecommuting) and become productive
citizens again."
"I have a dream of some day starting a nationwide bulletin board for
attendant care for the disabled community. It would be an attendant registry that
would permit disabled persons to hire attendants anywhere in the United States
and fuid qualified and compatible employees."
10-12
�10C. TECHNOLOGY FOR ECONOMIC GROWTH
"Investing in technology is investing in America's future: a growing
economy with more high-skill, high-wage jobs for America's workers; a
cleaner environment where energy efficiency increases profits and reduces
pollution; a stronger, more competitive private sector able to maintain
U.S. leadership in critical world markets; an educational system where
every student is challenged; and an inspired scientific and technological
research community focused on ensuring not just our national security but
our very quality of life. "
·President Clinton
Vice President Gore
February 22, 1993
Actions to Date
The Administration has:
•
Created incentives for private sector investment in research and
development and new businesses, with a targeted capital gains tax
exclusion for small businesses and extension of the research and
development tax credit.
•
Maintained strong support for basic research through agencies such as the
National Science Foundation.
•
Expanded support for civilian technology programs such as Advanced
Technology Program and Manufacturing Extension Partnership.
•
Established partnerships with industry in areas such as environmental
technologies for sustainable development, flat panel displays, and the
Partnership fqr a New Generation Vehicle.
•
Formed the National Science and Technology Council to improve
effectiveness of federal R&D investments.
10-13
�Background
Historically, the federal government has funded research and development in basic .
research, and R&D related to specific government missions, such as defense, space, and
health. The rationale for doing this was clear; The federal government funds defense R&D
to maintain American military superiority, and it funds research in health to combat disease
and to improve our quality of life.
In the post-World War II era, U.S. companies benefitted from technology "spin-offs"
from government-funded R&D in defense and other areas. American companies dominated
advanced technology markets such as semiconductors, computers, machine tools, and
aerospace. In the 1970's and 1980's, however, the United States began to lose its industrial
and technological leadership. The old paradigm of relying on "~pin-offs" from missionrelated R&D began to break down. In many instances, the civilian sector was more
technologically advanced than the defense sector. Although the United States often had a
lead in ba.Sic research, other countries were more successful at moving new ideas from the
laboratory to the market-place.
Although many leaders in business, labor and academia recognized that a new model
of cooperation was needed, previous Administrations either failed to act or provided few
resources for action. Government officials found it difficult to initiate new programs or
re-direct old ones.
President Clinton recognizes that technology is the engine of economic growth. He
promised to implement a technology policy that would create jobs, increase productivity,
and allow U.S. firms to compete and win in today's global marketplace.
The Initiative
President Clinton has acted decisively to:
•
Maintain U.S. leadership in basic science;
•
Shift federal R&D investments towards the development and diffusion of civilian
technology;
10-14
�•
Maximize the contribution that science and technology can make towards national
goals such as economic growth, job creation, a cleaner environment, and a leaner,
more efficient government;
•
Make the United States the best environment in the world for investment,
innovation, and job creation.
t
This strategy is essential to improving our quality of life, generating high-wage jobs,
and enhancing our ability to compete and win in today's global market-place. The
President has made significant progress in the first two years by:
Establishing incentives for private sector investment and innovation:
As part of his economic package, the President proposed a permanent extension of
the Research and Experimentation (R&E) tax credit and a 50 percent reduction in capital
gains taxation for investments in small blisinesses held for more than five ·years. Congress
extended the R&E tax credit for three years (one year retroactively and two years
prospectively), and supported the Administration's tax incentive for small businesses. The
incentive for small businesses will encourage long-term investments in "start-up"
companies, one of the engines of innovation and entrepreneurship in the U.S. economy.
Increasing the level and effectiveness of our investment in civilian and dual-use
technology:
The President has pledged to increase the share of the federal R&D budget devoted
to critical technologies, improve the management of our technology policy, and leverage
existing investments in the National Labs. As a result:
•
Funding for the Advanced Technology Program, which funds industry-led
technology development, has increased from $68 million in FY93 to $431 million in
FY95. This program has been hailed by industry as one of the most effective tools
for industry-government partnerships. Industry takes the lead in deciding which
new technologies should be explored. Industry is required to put up at least 50
percent of the funding, which leverages scarce federal funds and ensures that
industry is committed to commercializing the new technologies.
•
The President has cre~ted the National Science and Technology Council to help
defme and achieve science and technology goals.
•
Government-industry partnerships have been launched in critical technologies such
as flat-panel displays, the Partnership for a New Generation of American Vehicles,
10-15
�partnerships with the construction industry, semiconductors, and environmental
technologies necessary for sustainable economic development.
•
The share of R&D that participating agencies devote to the Small Business
Innovation Research program is being doubled from 1.25 to 2.5 percent of the R&D
·
budgets of participating agencies.
Creating a national network of manufacturing extension centers:
The Commerce Department's Manufacturing Extension Partnership is a nation\\'ide,
grassroots network that is helping manufacturers to sharpen their competitiveness and ·
improve prospects for their workers by learning about modern technology solutions. This
initiative, which is managed by the National Institute of Standards and Technology (NIST),
is designed to help the 370,000 manufacturers in the United States with fewer than 500
employees which generate more than 75 percent of new manufacturing jobs. Many of these
companies need to upgrade their use of manufacturing technology and adopt world-class
manufacturing practices. Some of the MEP services include access to technical experts,
demonstrations of manufacturing equipment and software, performance benclunarking, and
technical training.
These centers are having a significant impact on the bottom-line of the companies
that they work with. Manufacturers that worked with NIST's first seven centers estimated a
total of $320 million in benefits during the first 4 years of the program, a return of $7 for
each federal dollar invested in the centers. The Administration is on track to help fund
over 100 manufacturing extension centers by 1997.
Reforming antitrust .law
President Clinton signed legislation in 1993 which extends the National Cooperative
Research Act of 1984 to cover joint production ventures. This allows firms to share costs
and pool risks, which is increasingly necessary given the escalating costs of state-of-the-art
manufacturing facilities.
10-16
'
�Case Study:
The .Manufacturing
Extension Partnership
.,
Prime Tube, a small automotive supplier in Livonia, Michigan, with 45
employees, was recently chosen as a "tier-one" supplier by Chrysler. Prime Tube
has worked closely with NIST's Midwest Manufacturing Technology Center.
The company participated in one of the ·center's "continuous improvement" user
groups, which gave Prime Tube and 5 other automotive suppliers an opportunity .
to meet regularly to address specific operational issues, share ideas and
experiences, and track each others' progress on specific continuous improvement
projects. Prime Tube also tapped the center's expertise to undergo a
comprehensive evaluation of its entire business and its current market. Working
with the MTC, Prime Tube has acted on a number of recommended
improvements, including implementing a preventive maintenance program and
automated inspection system, reconfiguring the plant into work cells, and
determining .literacy and skill requirements for all manufacturing jobs.
These measures are paying off. Prime Tube President Frank Firek says
that "Some of the programs resulting from that work with the MTC are a strong
part of the reason we were chosen" as a tier-one supplier to Chrysler. Firek also
says that "If we had not implemented the changes recommended by the MTC, we
would have been forced to shut our doors."
...
10-17
�100. INTERSTATE BANKING
''American banks have shown over the last several years that they can
combine high quality service for all with strong financial performance.
Enactment of the interstate bill . . . will help them continue that record. "
President Clinton
September 13, 1994
Statement on Senate Action
on Interstate Banking Legislation
Actions to Date
In September 1994, President Clinton signed into law the Riegle-Neal
Interstate Banking and Branching Efficiency Act, a long over-due step to eliminate
artificial geographic restrictions on bank operations and customer service. By allowing
the banking industry to diversify geographically, the new legislation will:
•
Benefit consumers by allowing banks to· offer services at lower cost
and greater convenience.
•
Strengthen the banking system by making it easier for banks to
geographically diversify their loans and deposits and thereby reduce their
exposure to local economic downturns.
•
Improve the supply of credit to businesses and consumers. by letting banks
more easily move funds to the localities that need it most.
•
Reduce bank costs by allowing institutions to consolidate their
operations and more easily comply with regulations.
•
Make the banking industry more competitive by allowing
banks to compete more efficiently nationwide.
,,.
10-18
�Background
.,
"By joining the House in passing the Interstate Banking Bill, the Senate has
gone. beyond gridlock to eliminate unnecessary barriers to the
competitiveness and efficiency of our banking system... "
President Clinton
September 13, 1994
Statement on Senate Action on
Interstate Banking Legislation
The United States is the only industrialized country in the world that places
geographic limits on its banks. Since the McFadden Act of 1927, federal law has
effectively barred U.S. banks from branching across state lines. This restriction may have
been appropriate when enacted, but America's fmancial system has changed a lot since the
early part of this century. Today's financial system is national, indeed, international, in
scope. Bank consumers work and travel across state lines. Businesses operate nationwide.
But obsolete federal laws have kept the banking industry from evolving efficiently to meet
the changes in America's economy and the demands of fmancial services consumers.
Geographic limits also weaken the banking system, heightening its vulnerability to
regional economic downturns. In the 1980s, the collapse of New England's real estate
market and the energy. sector in Texas had disastrous effects on the financial institutions
operating in those areas. Many reduced ·their lending,-- particularly to small businesses.
From the first days of the Presidential campaign, President Clinton has stressed the
need to work with banks to increase their efficiency and improve the supply of credit.
Americans need loans to go to school, to build their homes, and to start their businesses .
. Few things can better expand opportunities for Americans than improving their access to
credit.
The Administration has consistently acted to reduce government-imposed burdens on
the banking industry wherever such action supports a strong banking system and benefits
consumers of fmancial services, both businesses and individuals. Ending the restrictions on
interstate banking satisfies both of these criteria.
For over 20 years, voices within and without the banking industry have called for an
end to the geographic barriers. Each of the past four Administrations tried to eliminate the
restrictions. But not until 1994, led by the Clinton Administration, with wide bipartisan
support, did Congress enact the Interstate Banking and Branching Efficiency Act. The Act
phases out all federally-imposed geographic restrictions on America's banks by 1997.
10-19
�The Initiative
The Interstate Banking and Branching Efficiency Act will, by September 1995,
allow bank holding companies to acquire subsidiary banks nationwide. The Act also
eliminates, by June 1997, the federal laws that keep banks from establishing branches in
more than one state.· This new, deregulated environment will benefit consumers, banks, and
the Nation's economy.
Consumers will benefit from more convenient banking services. The benefit will be
most obvious for those who regularly cross state lines. For example, a customer of a bank
in New Jersey located near his or her home may not be able to obtain convenient banking
services at an affiliated bank in New York City, where he or she works. Allowing
affiliated institutions to consolidate into a single bank will make it much easier for
customers to conduct transactions at any branch throughout the entire service area of the
bank, irrespective of state lines.
Consumers also will benefit from lower prices and the availability of a wider range
of services. Smaller banks that consolidate with affiliated institutions can obtain access to
technology and expertise they could not afford on their own. This will allow small
institutions to offer new services and reduce the cost of providing existing services. By
allowing banks to compete efficiently nationwide, the Interstate Banking and Branching
Efficiency Act affirms a core tenet of our economic system -- that competitive markets
benefit consumers.
American taxpayers will benefit from the increased stability that geographic
diversification brings to the banking system. Interstate banking will allow banks to
diversify their loan portfolios better, making them less vulnerable to local economic
downturns. It will also allow banks more diversification in their deposit base, diminishing
their reliance on higher-cost, less stable funding sources. And it will allow banks to move
funds more easily to the localities that most need them -- making a future "credit crunch"
less likely. Better geographic diver~ification of loans and deposits will strengthen the
banking system, thereby reducing risk to the deposit insurance system and the taxpayers
that stand behind that system.
Interstate banking will also enhance the banking industry's safety and soundness by
reducing bank operating c.osts. By permitting affiliated banks to roll up their operations into
branch banks spanning state lines, the Act paves the way for dramatic streamlining of
industry operations. Specifically, the Act allows the industry to eliminate thousands of
unnecessary bank charters, boards of directors, management structures, computer systems,
and back-office operations. Moreover, these consolidated banks will have to deal with far
10-20
,.
�fewer regulators, file fewer regulatory reports, and process fewer requests for information
from their remaining regulators.
While it eliminates obsolete federal restrictions on America's banks, the Act
recognizes and preserves the essential rights of the states to regulate their banking systems.
The Interstate Banking and Branching Efficiency Act gives states until May 31, 1997, to
opt out of interstate branching. The Act preserves the rights of the states to regulate banks
that operate within their borders, particularly with respect to laws regarding community
reinvestment, consumer protection, and fair lending. Deposit concentration limits will
ensure that no bank dominates a state or regional market.
Case Study: UMB Financial Corp.
Although full interstate branching will take effect in 1997, the Interstate Banking
and Branching Efficiency Act allows banks located along state lines to relocate their
main offices across state lines immediately, retaining theii:' original offices as branches.
This freedom is especially valuable in metropolitan areas that span state lines. Shortly
after the Act became law, UMB First National Bank (UMB National) exercised this
freedom to benefit itself and its customers.
Located in Collinsville, Illinois, UMB National sat just across the river from its
sister bank in St. Louis, United Missouri Bank of St. Louis, N.A. (l.JMB St. Louis). But
even though the two banks were commonly owned, customers of one bank could not
conduct business at the other -- a significant inconvenience to ·thousands of UMB
customers who commute to work every day across state lines. For the banks themselves,
the federal prohibition on branching was inefficient and wasteful: even though they served
the same metropolitan area, under common ownership, they had to retain duplicate
management teams, duplicate boards of directors, duplicate computer systems, submit ·
duplicate regulatory reports, and host duplicate annual examinations by bank regulators.
UMB National used the new law to move its main office to St. Louis, keeping its
Illinois offices as branches. Once in Missouri, UMB National merged its operations with
UMB St. Louis. The results: a single bank with an interstate branch system, more
efficient bank operations, less risk to the banking system, and better service to bank
customers. When fully phased in, the Interstate Banking and Branching Efficiency Act
will allow other institutions to duplicate this success throughout the country.
10-21.
�10E. TRUCKING DEREGULATION IN 1994
Actions to Date
With President Clinton's strong support, Congress enacted legislation in
1994 to deregulate intrastate trucking, thereby ending a patchwork of confusing
and. burdensome state regulations that imposed high costs on consumers of
American goods. The legislation eases entry restrictions and removes state
controls on rates and routes, producing substantial benefits to the nation, such ·as:
•
Savings to the economy of $3 to $8 billion annually through lower prices
and more reliable service;
•
Improvements to the environment and· reduced congestion through
elimination of circuitous routing;
•
Enhanced manufacturing competitiveness through service improvements,
such as just-in-time delivery.
With President Clinton's support, Congress also passed legislation that
will greatly reduce the paperwork burden and expenses of trucking firms as they
enter the industry and make their prices known to their customers.
Finally, President Clinton's FY96 budget proposes that Congress eliminate
the Interstate Commerce Corpmission, an obsolete agency established in 1887 to
leash the monopoly power of the "robber baron" railroads.
Background
Under the leadership of President Carter, Congress enacted legislation in 1977 and
1980 that eliminated most Federal controls over the air cargo and trucking industries,
providing opportunities for thousands of new firms with no loss of service to remote
communities and no degradation in safety. Today, there are well over half a million new
jobs in trucking alone, and many new trucking companies ·are run by women and minorities
who were "frozen out" under the regulated regime. ,
10-22
�The Brookings Institution estimates that consumers are saving about $20 billion each
year in lower prices. Other experts say the savings are many times that, because freight
delivery service is so reliable that stores and their suppliers can use "just-in-time"
manufacturing and inventory systems that reduce the volume of parts and fmished products
they have to keep on hand.
While the 1980 law eliminated most Federal controls, the reforms only applied to
trucking companies when they carried goods from one state to another, and not between
points within the same state. Some 41 states continued to impose business regulations on
truckers, blocking competition and hampering innovation.
The Initiative
Building on the gains brought about under Carter, in 1994, the Clinton
Administration strongly supported two pieces of legislation that have dramatically
liberalized business practices in the trucking industry.
One bill, which went into effect January 1, 1995, removes all State economic
controls on the trucking industry, such as entry restrictions and limits on rates, routes and
services. Economists estimate that this deregulation will save consumers $3 billion to $8
billion a year through lower prices and more reliable service. It will also create tens of
thousands of jobs, enhance manufacturing competitiveness by facilitating just-in-time
delivery, and strike a blow for the environment through improved transportation efficiency.
It is reinventing government at its best.
The. other bill substantially reduces the trucking regulatory functions of the Interstate
Commerce Commission. Now, people who want to begin trucking companies will only
have to show that they are safe and carry insurance, rather than go through a convoluted
applications process at the ICC. Once they are in business, they will not have to inform the
ICC about their prices, so long as they set the prices independently, without collusion.
These changes will save millionS of dollars in costs by eliminating needless red tape.
Further, .now that many of the ICC's functions have been eliminated, the President
has proposed in the fiscal year 1996 Budget that the ICC be eliminated. Any necessary
ICC functions would be transferred to other federal agencies. The net savings to the
Federal taxpayer would be $100 million by the year 2000.
10-23
�Case Study:
False Teeth in Detroit
In some states, before enactment of the legislation support~d by the Clinton
Administration, entering the trucking industry -- or even expanding an existing trucking
operation -- was an adversarial procedure of great length and expense. In Michigan, for
example, when a small dental delivery service transporting dentures within a 25-mile
radius of Detroit wanted to expand its service another 25 miles, it was met with a
barrage of protests from companies already providing the service in that area. After a
year of hearings at the public service commission, the courier service eventually won
the .authority, but not before ten dental lab presidents were asked to testify, and 600
pages of documents were added to the public docket. Now, that Saine dental delivery
service only has to comply with state safety and insurance requirements, with no need to
jump through bureaucratic hoops.
Case Study:
Appliances in Texas
The Stewart .Company, a Dallas, Texa,s, consumer electronics and appliance
distributor, chose to operate its own fleet of delivery truckS, rather than hire a trucking
company to haul its goods. This action saved consumers $90 per refrigerator because it
exempted the transport from State regulation that artificially elevated rates.
Three major appliance manufacturers --Whirlpool, GE and Kitchenaid --all
moved their warehouse operations from Texas to Arkansas. They ·did this so that.
transport of their goods would be classified as interstate commerce, exempt from Texas
state regulations that restricted routes and raised prices.
Now, these appliance manufacturers do not have to go out of their way simply to
avoid inefficient state regulations. The Stewart company can focus on its main line of
business -- manufacturing electronics and appliances, without having to operate a
delivery service on the side if it chooses. Whirlpool, GE and Kitchenaid can locate
warehouses where it makes the most sense from a business perspective, unimpeded by
the interference of obsolete and burdensome government restrictions.
10-24
�10F. SMALL BUSINESS
"Small business owners, managers and employees have been the driving
force behind an economic comeback in America. [Small business] is
where America turns for our best new ideas --from technological
breakthroughs to redefining the way we work. "
President Clinton
Video Address to White House
Conference on Small Business
10-25
�Actions to Date
Over the last two years, the Clinton Administration has focused on four priorities
for small businesses:
Access to Capital:
•
In 1993, the Administration revised bank regulatory policies to encourage
commercial lending, particularly to smaller _firms: from 1993 · to 1994,
commercial and industrial lending increased by an estimated 8 percent.
•
The Administration expanded the Small Business Administration's primary loan
guarantee program by more than 40 percent: in 1994, SBA guaranteed about
$8 billion in loans.
•
In the longer term, the Administration's program to establish new community
development fmancial institutions will stimulate new lending to small businesses
and bring new investors into small-business lending markets.
Incentives· for Investment:
•
The President's economic plan increased by 75 percent the amount a small
business can deduct as expenses for equipment purchases, and created new tax
incentives to encourage investments in small businesses.
•
Under the revised Small Business Investment Company program, dozens of new
venture capital firms will provide billion of dollars in equity fmancing for startups and growing firms.
Rationalizing Regulations:
•
The President convened a Regulatory Reform Forum, bringing together regulated
businesses and regulatory agencies to develop comprehensive proposals for
reducing regulatory burdens on small businesses.
•
The Administration has pushed for judicial review under the Regulatory
Flexibility Act, a measure that will ensure that the interests of small firms are
taken into account as agencies develop new regulations.
Access to New Markets:
•
Under the President's leadership, federal, state, and local agencies have
established one-stop export assistance shops to provide technical and financial
assistance to firms interested in reaching new markets.
•
The Administration pushed for and obtained an overhaul of the government
procurement system -- including dramatic changes that will enhance the ability of
smaller firms to compete for government contracts.
10-26
�Background
.
President Clinton often calls small. business "the heart of America." Since the
founding of the Republic, small businesses have played an important role in both the
building of our economy and the development of our communities. These firms play a
particularly critical role in the new American economy. Smaller firms are more flexible
and responsive --essential features in today's dynamic economy -- and are a rich source of
invention and innovation.
Recognizing the importance of small business and the need to en5ure that those
businesses have a voice in today' s policy debates, President Clinton was the first President
·to accord the Cabinet-level- status to the Administrator of the Small Business
Administration. He also provided that the Administrator would be a member of the
National Economic Council. Finally, the President has actively supported the White House
Conference on Small Business -- a series of more than sixty conferences held across the
nation and culminating in a four-d3.y meeting in Washington, D.C., in June, ·1995.
The Initiative
One of the President's most significan~ accomplishments for small business was
institutional. Under the leadership of Administrator Erskine Bowles, the SBA was
successfully reinvented, changing from a beleaguered bureaucracy into a modem example
of government that works better and costs less. Reforms were implemented reducing
paperwork and turnaround times, while increasing responsiveness and innovation.
Administrator Philip Lader continues the reinvention effort by creating opportunities for a
more efficient agency which serves more small businesses at a lower cost to the taxpayers.
Substantively, the Administration has focused on four policy priorities.
.
Improving access to capital. Because the term "small business" encompasses
everything from the comer store to the next Microsoft or Federal Express, improving access
to capital requires a range of efforts addressing debt and equity fmancing, as well as longterm and short-term needs.
,
One of the President's ·frrst actions was to change regulatory practices in order to
encourage banks to revise their lending practices and make more money available for small
businesses. Recognizing that some firms still had difficulty obtaining loans, the President
also dramatically expanded SBA's loan guarantee programs while cutting the paperwork
required for most SBA loan guarantees from a stack the size of a small telephone book t<;> a
single, two-sided sheet of paper.
10-27
�The Administration made a special effort to reach out to women- and minorityowned firms --the most rapidly growing group of small businesses. As a result, SEAguaranteed lending to those firms rose more than 50 percent between 1992 and 1994.
For firms in need of equity financing, the Administration and Congress created new
tax incentives to encourage investment in small businesses and in investment companies
that serve minority-owned small businesses. Moreover, under the revised SBIC program,
new venture capital firms will provide start-ups and growing firms with several billion
dollars in patient capital.
Increasing incentives for investment. The Administration encouraged businesses to
invest in new equipment, increasing by 75 percent the amount a small business can deduct
for equipment. purchases. In addition, the Administration's Empowerment Zone/Enterprise
Community program offers significant tax incentives for businesses within selected regions,
and SBA will establish One Stop Capital Shops to promote and sustain economic
development.
Improve the regulatory environment for small business. Beginning with the National
Performance Review, the Administration has taken measures to rationalize regulations and
improve the regulatory process. For example, the Administration supported a smallbusiness exemption to the Nutrition Labeling Act, pressed for expedited resolution of
Superfund claims against smaller firms, and convened the first ever Forum on Regulatory
Reform for Small Business. The Administration has also actively supported judicial review
under the Regulatory Flexibility Act, a measure that will ensure that the interests of small
firms are adequately considered every time an agency promulgates a new regulation.
Access to the world's fastest-growing markets. The President has taken the lead in
creating the architecture of the global economy -- pressing for and securing the NAFTA
and Uruguay Round agreements, and the APEC commitments. At the same time, the
Administration has implemented dramatic changes, such as an overhaul of export controls
and a reinvention of export assistance, that allow even the smallest of firms to reach out to
global markets. At home, the President and Vice President have championed reform of the
federal procurement system, enabling small business around the country to compete for
thousands of government contracts.
All of these changes reflect the President's deep and ongoing commitment to small
business. These firms play a critical role in today's economy. Globalization changes
production values, making mass production less important, while shorter product cycles,
flexibility and innovation become more important. All of these changes favor smaller
firms. Likewise, the shift toward an information-based economy also favors smaller fmns.
Just as small "cottage industries" led the transition to a manufacturing economy, so small
10-28
�firms will lead the transition to the information economy. All of these trends mean that -now more than ever -- small businesses are the heart of America.
•
Case Study:
Low Documentation Loan Program
The SBA's new Low Documentation (LowDoc) Loan Program makes applying
for an SBA loan guarantee more user friendly than it's ever been. Using a one-page
application, a small business will get usually get a response from SBA loan officers in
less than a week. LowDoc applies to loans of under $100,000 made by banks and
guaranteed up to 90 percent by the SBA.
This new program was put to good use by Charles and Margaret Hardin, native
North Carolinians who have wanted to open their own restaurant for years. "When my
banker told me he was going to pursue an SBA guarantee for my loan," said Hardin, "I
thought 'Oh, no, government red tape!' But it wa5n't like that atall." Hardin said, "the
one page loan application was faxed in and we had approval within four days." The
Hardins used their LowDoc Loan of $40,000 to start the Parkway Cafe.
"Mr. Hardin had the acumen and ability to run his own restaurant," said Mark
Trivette, Vice President of Centura Bank in nearby Boone. "However; without the SBA
. guarantee, we would not have been able to offer a longer term and lower payments on
their loan."
10-29
�11. PROTECTING OUR NATION'S
SECURITY
Introduction
The President has no more important responsibility than to safeguard the security of
all Americans· from foreign threats -- today, and for generations to come. This challenge
was self-evident during the Cold .War, when we faced massive Soviet forces and nuclear
missiles targeted at our citizens and· cities. With the disintegration of the Soviet Union,
some argue the time has come to claim victory and quietly withdraw from our engagement
around the world. We must resist this temptation. The end of the Cold War has not
lessened our nation's security needs -- protecting the lives and personal safety of
Americans, maintaining our freedom and independence, ·and providing for the well-being of
all our citizens. Rather, it has changed the ways we must go about meeting them.
The situation created by the collapse of the Soviet empire has created new
challenges. Direct threats to our security are posed by states such as Iraq and Iran, by the
proliferation of weapons of mass destruction, such as nuclear or chemical weapons, and by
terrorists who strike at the heart of New York. Local conflicts that risk spilling over across
borders represent another kind of threat, as do international narcotics trafficking, large scale
environmental degradation, rapid population growth, and massive refugee flows onto our
shores.
At the same ~ime, the post-Cold War world offers tremendous new opportunities to
enhance the security of all Americans. America stands as the preeminent world power.
Our values of democracy and free markets captured the imagination and inspired historic
actions of people around the globe. Hundreds of millions of people have cast aside
communism, dictatorships, or apartheid. And former adversaries are now cooperating with
us on global problems. We have seized these opportunities by forging new international.
partnerships, dramatically reducing the threat of nuclear war, and enlarging the community
of nations with which America trades, and in which America invests.
,
We face a choice. We can retreat, leaving our nation unprepared to face the new
challenges and to seize the new opportunities. Or we can remain engaged and help shape a
world more conducive to our interests, more consistent with our values, and more secure
for our children.
The decision we make will have concrete and far-reaching consequences. It will
determine wh~ther future generations will live in a world where nuclear, biological, and
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�chemical weapons have fallen into dangerous hands; whether our country will continue to
have unimpeded access to oil; whether American citizens will be targets of terrorist groups;
and whether our children will enjoy uncontaminated air, fisheries, water, and arable land.
For President Clinton, the choice is clear. From the day he took office, he has
exerted America's leadership abroad to make the world safer and Americans more
prosperous. These goals lie at the heart of his national security strategy. To promote them,
and in addition to. our efforts to open markets and revitalize our economy, he has taken
bold actions on seven critical fronts.
•
Keeping our military strong and ready to fight, so that we are able to defend
American interests whenever necessary.
•
Reducing the threat of nuclear weapons and other weapons of mass destruction
to increase our safety and the safety of American men, women, and children.
•
Advancing regional security to enhance stability in areas vital to our safety.
•
Acting as an effective peacemaker and mediator in order to defuse conflicts
before they become significant crises.
•
Promoting democracy to check global threats before they threaten our territory and
interests and to enhance economic opportunities.
•
Confronting transnational threats to preserye America's way of life and protect
its future.
•
Promoting defense reinvestment to encourage the development of an integrated
defense and civilian industrial base.
President Clinton and his Administration already have made substantial progress in
all seven areas. These accomplishments are improving the lives of every American.
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•
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''
11A. KEEPING OUR MILITARY STRONG AND
READY TO FIGHT
"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. "
President Clinton
State of the Union
January 25, 1994
Actions to Date
From the day he took office, President Clinton has fought hard to keep the
military strong and to use it effectively when necessary. The Administration has:
• ·Obtained congressional passage of defense budgets that reflect the President •s strong
commitment. to military readiness.
·•
Increased its initial funding plan for defense three times, and requested and received
defense supplementals three times as world events have unfolded -- ensuring that our
armed forces have the funds they need to carry out their missions.
•
Recently proposed a $25 billion increase in our military spending plans over the next
6 years.
•
Implemented a strategy and maintained sufficient forces for our military to fight two
major regional conflicts nearly simultaneously.
•
Improved the quality of life -- including pay raises and child support care -- for our
men and women in uniform and their families.
·
•
Used force decisively and effectively when necessary --as in Iraq and Haiti.
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�Background
A strong defense is the best safeguard of our country's security. We jeopardize all of
our other efforts to enhance our nation's well-being if we do not have the military
capability to defend our vital interests. Our military must deter our adversaries and reassure
our friends and allies that America is prepared to put force behind the defense of our
interests. And, when we commit them to combat, our military forces must prevail
decisively. That is why we devote more than 90% of all our expenditures for defense and
foreign policy to our armed forces.
In today' s world of diverse dangers, our armed forces also must be prepared and
trained to confront new threats -- newly aggressive regional powers, the spread of weapons
of mass destruction, terrorism and urgent humanitarian needs. President Clinton's actions
guarantee our readiness to meet the challenges of the post-Cold War era. Our successful
military operations of the past two years have demonstrated the President's commitment to
our national security and the unsurpassed abilities of our armed forces.
The Initiative
•
Defense Budgets to Maintain and Strengthen
~ilitary
Readiness
"... / am determined to take the steps necessary to keep our Nation secure.
We will keep our forces ready to fight. We will work to head off emerging
threats, and we will take action when action is required "
President Clinton
Address to the Nation
June 26, 1993
·The President's actions to strengthen our national defense build on clear principles:
we must invest all necessary resources to defend our security; we must adapt our armed
forces to the challenges of the post-Cold War era; and we must be prepared to use force
decisively where our vital interests are at stake. The President's persistent efforts to put
resources into training and readiness, and his willingness to back diplomacy with force meet
·
these objectives. The exceptional performance of our armed forces from Haiti to the
Persian Gulf have demonstrated that our military remains the best trained, the best prepared,
and the best equipped fighting force in the world.
Keeping our forces ready to fight wherever and whenever necessary is the
President's frrst defense priority. In 1993, the Administration increased its original defense
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�..
budget by $13 billion to cover funding shortfalls inherited from the prior Administration.
In 1994, the President added $11.4 billion to the deferise spending plan. And last
December, the President proposed a "Defense Funding Initiative" that will provide for an
additional increase of more than $25 billion for the defense program over the next six
years. These funds will ensure that we maintain the readiness of our armed forces at the
highest level, and provide the resources needed to equip our forces with the next generation
of defense hardware.
•
Quality of life improvements
Because ·the Clinton Administration recognizes that our men and women in uniform
are the backbone of our defense, the· Defense Funding Initiative also includes funds to
improve the quality of life for our troops and their families. It will support pay raises to
the maximum extent possible under the law, provide military personnel with compensation
levels that are competitive with the private sector, and increase military community and
family support, including more child care and family counselors. Providing resources to
bolster our armed forces is a price the President is committed to pay to protect the physical
and economic safety of all Americans, today and. for generations to come.
•
The "Bottom Up Review"
"I directed that our Armed Forces be ready to face two major regional
conflicts occurring almost simultaneously. Since then, I have repeatedly
resisted calls to cut our forces further, to cut our budget below the levels
recommended in that bottom-up review, and I have drawn the line against
further defense cuts. "
President Clinton
Statement on Defense Readiness
December . 1, · 1994
•
An effective defense also means one that is suited to today's strategic environment.
To adapt our military to the challenges of the post-Cold War era, and at the President's
direction, the Department of Defense carried out the Bottom-Up and Nuclear Posture
Reviews. The Bottom-Up Review examined the structures and strategies of our
conventional forces and recommended a plan to deter and, if necessary, fight and defeat
aggression by potentially hostile regional powers. It underscored the need for forces that
can be deployed quickly and that can support U.S. forward-deployed forces to halt an
invasion and defeat an aggressor. Today, in concert with our allies, our forces are prepared
to fight -- and win -- two conflicts, each the size of the Gulf War, that might happen almost
simultaneously.
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�To adapt our military to current conditions also means closing unneeded military
bases. To assist the economic redevelopment of communities affected by these closures,
the Administration is implementing a $20 billion defense reinvestment and conversion plan
to help hard hit workers, communities, and businesses. The President also directed the
Administration to speed the transfer of base property for economic development, provide
transition assistance, and invest necessary resources for the environmental clean-up of
defense sites.
•
Using force when necessary
"During these past two years, our military has time and again demonstrated .its
readiness and its war-fighting and peacekeeping capabilities. . From Korea to
Macedonia, to Rwanda and Haiti, we have placed great burdens on our men and
women in uniform, and they have responded magnificently. They have demonstrated
a truly outstanding ability to deploy quickly, provide security, and to help ensure
stability. "
President Clinton
Statement on Defense Readiness
December 1·, 1994
In the end~ our national security is only as strong as our ability to back persistent
diplomacy with the credible threat of force, and to act decisively when necessary to defend
our interests. The President's willingness to use force and the performance of our military
in the past two years - in Iraq, in Haiti, or in Rwanda -have made our country safer and
stronger.
•
In the Persian Gulf, swift and decisive military action kept Iraq from repeating its
aggression against Kuwait and forced Iraq to withdraw its threatening troop deployment
from the Kuwaiti border.
•
In Haiti, the ruling generals agreed to give up power peacefully only once they knew
the President had ordered U.S. armed forces into action. Since then, our military's
performance and each phase of Operation Uphold Democracy -- from planning to
intervention to our work today -- has achieved its major objectives. A carefully planned,
well-executed strategy led by the American military has succeeded in creating a secure
and safe environment for the people of Haiti.
•
In Rwanda, the U.S. provided its unique logistical capabilities at a time when the crisis
overwhelmed the United Nations and non-governmental organizations and when our
help was essential. Operation Support Hope helped save the ·lives of tens of thousands
of people. Our mission has been accomplished, and our forces have now turned over
responsibility for humanitarian aid to non-governmental relief agencies.
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.. I
,
�•
11 B. REDUCING THE THREAT OF NUCLEAR
WEAPONS AND OTHER WEAPONS OF MASS
DESTRUCTION
"More than a score of nations likely possess [weapons of mass destruction], and
their number{s] threaten to grow. These weapons destabilize entire regions. They
could turn a local conflict into a global human and environmental catastrophe. We
simply have got to find ways to control these weapons and to reduce the number of
states that possess them ... "
President Clinton
Address to the United Nations General Assembly
September 27, 1993
11-7
�Actions to Date
Reducing the threat posed by weapons of mass destruction is critical to our
security. The Administration has made significant strides by shrinking existing arsenals
of nuclear weapons. It has also achieved considerable gains in preventing more countries
from building nuclear weapons and in curbing the development of chemical and
biological weapons. Over the past two years, the Clinton Administration has:
•
Brought the START I treaty into ·force, which will eliminate bombers and missile
launchers carrying over 9,000 Soviet and U.S. strategic nuclear weapons -- a
reduction of 40% -- and opens the door to ratification of START II, which will
make even deeper cuts.
•
Concluded an agreement that unblocked the process of eliminating nuclear
weapons from Ukraine and provided funds to facilitate the elimination of nuclear
weapons in Ukraine, Belarus and Kazakhstan.
•
Worked to strengthen the protection, control, and accounting of nuclear materials
in the former Soviet Union.
•
Reached an agreement with Russia to stop targeting missiles at each others'
citizens and cities.
•
.Secured an agreement with North Korea that will eliminate that country's
threatening nuclear program.
•
Secured commitments from Russia, Ukraine, China, and South Africa to control
the transfer of missiles and related technology.
•
Submitted for Senate ratification, the Chemical Weapons Convention, which will
ban these weapons, and promoted new measures to strengthen the Biological and
Toxin Weapons Convention.
,
Background
By the end of the Cold War, the United States and the Soviet Union had amassed
huge arsenals of nuclear weapons. The end of the East-West conflict brought a chance to
make deep cuts in these forces. But the collapse of the Soviet Union created an obstacle to
11-8
"
�'
•
I
.
rapid progress in nuclear arms control; a significant part of the Soviet Union's strategic
forces was stationed in republics that acquired independence after the collapse of
communist power. That raised the question of whether several states with nuclear weapons
would succeed the one that had existed before. That also left in doubt whether serious arms
reductions would be p~ssible in such a changed world -- or whether moi:e nuclear rivalries
would arise .
The post-Cold War period has also made preventing the spread of nuclear weapons
even more difficult. Due to advances in technology and the demise of the Soviet Union,
nations and even terrorist groups now have better opportunities for getting hold of the
materials needed to build a nuclear weapon. Material from dismantled. weapons is in
danger of being diverted, and the fear has grown that impoverished scientists might sell
their expertise to the highest bidder.
The possibility for proliferation of nuclear as well as biological and chemical
weapons now poses a major threat to our national security. These weapons can destabilize
entire regions. They could turn a local conflict into a global human and environmental
· catastrophe.
To enhance America's safety, we must reduce the number ofnuclear weapons that
already exist and prevent other countries or terrorists from acquiring them. We must also
prevent the spread of other weapons of mass destruction, such as chemical, and biological
weapons.
The Initiative
•
Reducing the number of nuclear weapons
"Because of the agreements we reached with Russia, with Belarus, with Kaiakhstan,
with Ukraine ... Americans can go to bed at night knowing that nuclear weapons
from the former Soviet Union are no longer pointed at our children. "
President Clinton
January 12, 1995
White House Conference on Trade and
Investment in Central and Eastern Europe
"
When President Clinton took office, he vowed to do everything in his power to
reduce the danger posed by nuclear weapons. While there is still much to do, the American
people worry less about nuclear war than at any time since the dawn of the nuclear age.
11-9
�Because of determined efforts by the President, last year the leaders of Russia,
Ukraine, Belarus and Kazakhstan all joined with the President to bring into force the
START I agreement, which had been negotiated by Presidents Reagan and Bush. The treaty
will make deep cuts in the global arsenal, eliminating the missiles and planes in U.S. and
former Soviet forces that carry 9,000 warheads. Already, both sides are dismantling
weapons well ahead of schedule. Entering the treaty into force paves the way for prompt
ratification of the START II treaty, which would further reduce our nations' nuclear
stockpiles to one-third their Cold War strength. What's more, Ukraine, Belarus and
Kazakhstan have all forsworn nuclear weapons enti_rely and signed the Non-Proliferation
Treaty.
'
Only a year ago, nearly 8,000 nuclear warheads from the former Soviet Union were
aimed at the United States. Today, because of an agreement between President Clinton and
President Yeltsin of Russia, our nations no longer target each other's cities or citizens.
Even in the very unlikely event a Russian missile were accidentally launched, it would not
hit our country.
·
Our arms control progress has served our security interests in allowing us to reduce
our strategic programs. That has enabled us to shift resources to efforts such as putting our
economic house in order by reducing the budget deficit and boosting the readiness of our
conventional forces.
•
Controlling the spread of nuclear weapons
President Clinton has also made containing the spre~ of nuclear weapons a top
priority and has proposed a comprehensive approach to controlling fissile materials. Since
the greatest danger comes from theft of bomb materials in the stockpiles of the former
Soviet Union, the U.S. is helping Russia and other newly independent states transport,
safeguard, and destroy nuc~ear weapons. Those efforts have been possible because of
farsighted legislation by Senators Nunn and Lugar to dismantle the nuclear arsenals of the
former Soviet Union and to help employ nuclear scientists in nonmilitary projects.
At the same time, we are reducing the total amount of material needing protection.
Under an agreement reached by the Administration with Russia last year, 500 tons of highly
enriched uranium will be converted to low enriched uranium for reactor fuel that cannot be
used for nuclear weapons. In a major operation ·called "Sapphire," the U.S. also arranged
for the airlift of more than half a ton of highly enriched uranium -- enough to make dozens
of nuclear weapons.-- from Kazakhstan to safe storage in the United States. These were
smart investments in our future, for tightened control over nuclear materials and weapons
greatly enhances the security of America's citizens.
11-10
·1
�.
•
Eliminating the North Korean nuclear program
"Our patient but hardheaded diplomacy has secured an agreement with North
Korea on nuclear issues that is clearly and profoundly in our interest ... The deal
stops North Korea 's nuclear program in its tracks. It will roll it back in years to
come."
President Clinton
January 12, 1995
White House Conference on Trade and
Investment in Central and Eastern Europe
•
For at least the past ten years, the world has known that North Korea had an active
nuclear program. Because of the risks of a nuclear-armed North Korea, rising tensions on
the Korean peninsula and even war, the Clinton Administration entered talks with
·
Pyongyang.
Thanks to the President •s tough diplomacy, the Framework Agreement that we
reached means that North Korea has halted and will eventually eliminate its plutonium
production program. Our agreement with Pyongyang is not built on trust. Instead, it sets
up a system of international monitoring -- and the inspectors have already confmned that
North Korea's program is frozen. Plutonium that could have been processed into weapons
material will be put under the supervision of the International Atomic Energy Agency.
Construction on reactors that would have produced more such material has ended. If at any
time North Korea fails to meet its obligations, we will withdraw the benefits of the
agreement. Similarly, the Clinton Administration is maintaining the international coalitions
. necessary to isolate and prevent both Iraq and Iran from advancing their nuclear weapons
programs.
•
Chemical and biological weapons
The Gulf War demonstrated the. range of new dangers that confront us in the. Post
Cold War era-- among them chemical and biological weapons and long-range missiles that
can attack our forces and our allies~ To confront these challenges, the Clinton
Administration is:
•
Urging the Senate to ratify the Chemical Weapons Convention, which will
advance us toward the goal· of eliminating chemical weapons under rigorous
inspection..
•
Working to negotiate legally binding measures to strengthen compliance with
the Biological and Toxin Weapons Convention, which outlaws these
weapons.
11-11
�•
Strengthening the Missile Technology Control Regime. Already, we have
commitments from four key potential missile suppliers -- Russia, Ukraine,
China and South Africa -- to control the transfe:r of ballistic missiles and
related technology.
In the months and years ahead, President Clinton will build on the immense progress
that has been made thus far. He has set an ambitious --and necessary --agenda for the
future.
First, the U.S. will try to raise the barrier against developing new generations of
nuclear weapons by negotiating a Comprehensive Test Ban Treaty, which would end the
practice of detonating nuclear devices for weapons purposes. To help secure that treaty, the
President has extended the U.S. moratorium on nuclear testing. Second, we will continue to
work to prevent more nations from building their own nuclear weapons by leading the
charge for indefinite and unconditional extension of the Non-Proliferation Treaty, which is
the cornerstone of our efforts to prevent nuclear weapons proliferation. Third, we will
work to cut even deeper into the global arsenal by pushing to ratify START II. Fourth, we
will. press ahead with a number of other efforts to stop the spread of all weapons of mass
destruction, including an international agreement to ban the production of flssile material
for nuclear weapons use.
In a world with too many weapons of mass destruction, President Clinton is seizing
the opportunity to do something about them. His initiatives offer the most wide-ranging
and concrete efforts to reduce the danger from these weapons and give the American people
the security they want.
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•
�11C. ADVANCING REGIONAL SECURITY
"... We must remain engaged in world affairs. That's the only way we
can... protect our nation and keep small problems today from growing into
dangerous crises tomorrow. "
President Clinton
Radio Address from the Kremli~
January 15, 1994
•
Actions to Date
In the post-Cold War world, as old rivalries between nations have reemerged,
making the United States more secure and prosperous depends on our ability to preserve
stability in regions vital to our interests. To advance regional security the Clinton
Administration has:
•
Initiated the process of bringing Europe's new democracies into NATO and created
the Partnership for Peace to· promote military and political cooperation among
European nations.
•
Undertook actions with NATO allies and the United Nations to contain the conflict
in Bosnia, alleviate civilian suffering, tighten sanctions against Serbia and the
Bosnian Serbs, and enforce a no-fly zone.
•
Successfully halted an Iraqi military threat to Kuwait and the Persian Gulf.
•
Enhanced stability in our hemisphere by removing Haiti's military rulers and
restoring that nation's democratic government.
.Background
History teaches that the United States must stand ready to step in and protect friends
and allies in order to defend our own national interests. Our interests are jeopardized by
regional instability, and by the actions of aggressor states. Preserving regional stability
serves our long-term security goals by preventing the spread of conflict. It also safeguards
economic stability and helps generate more jobs for Americans at home and investment
opportunities abroad. Success on these fronts largely depends on America's ability to
11-13
�forge durable security relations with other nations.
The Initiative
•·
•
Europe
"[O]ver time, ... European and transatlantic institutions, working in close cooperation
with the United Nations, can support and extend the democracy, stability, and
prosperity that Western Europe and North America have enjoyed for 50 years. That
is the future we are working to build. "
President Clinton
December 5, 1994
Conference on Security and
Cooperation in Europe
European stability is vital to our own safety, a lesson we have learned twice this
century at great cost. With the collapse of the Soviet empire and the emergence of new
democracies in its wake, the United States has an unparalleled opportunity to help create a
stable, free, and unified Europe. President Clinton is determined to seize this chance.
In the last year, the Clinton Administration has made good progress in building and
.adapting institutions of European security. First~ President Clinton took steps to strengthen
NATO, the historic guarantor of peace and stability in Europe. During his trip to Europe in
July, the President reaffirmed his commitment to NATO's future expansion. NATO
. expansion will promote .our interests by reducing the chance of conflict in Central and
Eastern Europe --the starting point of two world wars and the Cold War. The prospect of
NATO membership will build confidence in the new democracies and provide them with a
powerful incentive to consolidate their political and economic reforms. NATO allies will
agree in 1995 on the process and objectives of NATO's expansion.
Second, the President has continued to build and strengthen links between NATO
and other European nations. At the President's initiative, the January 1994 NATO Summit
approved the Partnership for Peace -- the firSt security arrangement that can encompass all
the countries of Europe. To date, 23 countries, including Russia, have joined the
Partnership, paving the way for a growing program of military cooperation and political
consultation, all of which increases our own security.
Third, the United States has repeatedly taken the initiative to prevent conflicts and
11-14
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�•
smooth the way for a new and peaceful era in Europe. For example, we
with Russia, Latvia, and Estonia to facilitate agreements on the complete
Russian troops from the Baltics. This, coupled with the final withdrawal
from Germany, means that for the first time since the end of World War
troops remain in Central and Eastern Europe.
worked closely
withdrawal of
of Russian forces
II, no Russian
In addition, the United States has led efforts by NATO and the United Nations to
prevent the conflict in the former Yugoslavia from spreading into a broader European war.
We have taken action to alleviate human ·suffering and encourage the parties to negotiate.
While we have not succeeded in achieving a political settlement, the Clinton Administration
has led the fight to tighten international economic sanctions against Serbia and the Bosnian
Serbs, and has established the United Nations War Crimes Tribunal, which is beginning to
prosecute its frrst cases. American leadership also paved the way for NATO's decision to
enforce a no-fly zone and for its ultimatum ending Serb shelling of Sarajevo. And the
troops we sent to Macedonia have helped prevent the Bosnian conflict from spreading.
The Administration will continue to play an active· role in seeking to· build a truly
integrated Europe, one in which the new democracies of Central Europe and the former .
Soviet Union enjoy the security, prosperity, and individual liberty that Western European
countries have enjoyed since the end of World War II. At the same time, the
Administration will continue to play an active role in supporting democratization and
economic reform throughout the former communist world, iri close partnership with the
European Union. An expanded community of economically-dynamic democracies will
mean greater security for the United States and growing trade and investment opportunities
-- to the benefit of all Americans
•
Middle East
"From the first days of our Revolution, America's security has depended on the
clarity of this message: Don 't tread on us.... There should be no mistake about the .
message we intend these actions to convey to Saddam Hussein, to the rest of the
Iraqi 'leadership, and to any' nation, group or person who would harm our leaders
or our citizens. We will combat terrorism. We will deter aggression. We will
protect our people. "
President Clinton
June 26, 1993
Address to the Nation on the strike
on Iraq Intelligence Headquarters
In the Middle East, President Clinton demonstrated his commitment to America's
leadership role. The immediate dispatch of troops to Kuwait stopped renewed Iraqi
11-15
�aggression dead in its tracks, safeguarding vital U.S. interests in the region. Operation
Vigilant Warrior illustrated once again the need and our ability to respond quickly to threats
to our allies. The Administration will continue to enforce the no-fly zones and help protect
the Kurdish minority.
The President is committed to preventing the emergence of another threat to our
regional interests. To that end, he has implemented a strategy aimed at containing both Iraq
and Iran, and will maintain America's long-standing presence in and near the Persian Gulf.
•
The Western Hemisphere
Thanks in part to America's efforts, the Western Hemisphere is close to becoming
the first entirely democratic hemisphere in the world -- Castro's Cuba is the sole exception.
President Clinton's decisive action to restore democracy to Haiti and his hosting of the
historic Summit of the Americas illustrate his determination to see the hemisphere become
a region of stability, democracy, and groWing economic opportunity.
Acting on his conviction that the situation in Haiti posed dangers to the United
States and the hemisphere, President Clinton pursued this goal in the face of strong political
opposition. Haiti's military rulers, who had long defied the will of the Haitian people and
of the international community, backed down when they learned that the 82nd Airborne
was enroute. By backing diplomacy with force, we achieved peacefully what we were
prepared to do with force. Since then, our forces have successfully led an international
coalition to restore democracy in that country.
At the Summit of the Americas, President Clinton and the other 33 democratically
elected leaders of the hemisphere began to map out a course to open new markets and
create a free trade area throughout the Americas; to strengthen democracy" in the region;
and to improve the quaiity of life for its inhabitants. This new hemispheric dialogue and
action plan -- which the President calls a "Partnership for Prosperity" -- will produce jobs,
. opportunity, and prosperity for our children and future generations.
We will als9 continue to cooperate with the countries of Latin America to enhance
regional security and combat narcotics trafficking and terrorism. We will also be working
with friends to help resolve the underlying causes of the recent border conflict between
Peru and Ecuador. The United States, Argentina, Brazil, and Chile acted together in timely
fashion to help contain the hostilities when they broke out early this year and we will work
equally energetically to prevent their recurrence.
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•
•
Asia and the Pacific
The United States also has vital security interests in Asia and the Pacific, a region in
which we fought three wars in this century. Increasingly, America's security and
prosperity are tied to this region. President Clinton has maintained America's active
military presence in Asia-- including our forward presence in South Korea and our bilateral
security agreements -- to deter regional aggression and secure our national interests. He
also has supported new regional exchanges -- such as the ASEAN Regional Forum --to
enlarge the regional security dialogue, promote transparency of defense policies, and
improve communications on security issues.
•
Africa
There is a new spirit of democracy and self-reliance throughout Africa. Our strategy
embraces this new spirit because Africa matters -- as evidenced by high level visits by the
Vice President, the National Security Advise}' and the Deputy Secretary of State. Africa
matters because of the huge potential of its people and its economies, potential that is
already being realized to create jobs and exports for our own country. It matters because of
the historic ties that bind our peoples, including 25 million African Americans. And it
matters because the great global challenges of tomorrow -- promoting sustainable
development, protecting human rights, stopping environmental decline, ensuring reasonable
population growth, preempting ethnic tensions, and integrating the rich spiritual heritage of
Islam into the demands of modern states -- can be seen in the challenges facing Africa
today.
Throughout Africa, the Clinton Administration has supported democracy, susta.iriable
economic development, and conflict resolution through negotiation, diplomacy, and
peacekeeping. In the past two years, America has worked hard to enhance stability,
particularly in Southern Africa. We helped bring an end to two decades of brutal civil war
in Angola and Mozambique. We have fostered new cooperation with South Africa and
provided assistance to that nation's historic transition to democratic rule. Under the
innovative leadership of the U.S. Agency for International Development, we have launched
a new initiative in the Horn of Africa to anticipate and address the causes of potential
famine that threatens 25 million people. We have helped relieve the crushing burden of
debt for many African nations. And we have responded to humanitarian crises in Rwanda,
Liberia, Angola, Sudan, and elsewhere.
)
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�Background
•
e
Too often, regional conflicts persist until they develop into crises with serious security
implications for the United States or its allies. The best examples are in the Middle East,
where enduring conflict between Israel and its Arab neighbors has brought us to the brink
of direct military engagement.
That is why our presidents historically have been involved in efforts to mediate between
seemingly irreconcilable adversaries. President Clinton stands firmly in that tradition.
Through his personal engagement, he has helped resolve and mediate some of the most
intractable regional problems of our time.
The Initiative
•
Brokering Peace
"The· United States has been proud to serve as a full partner in the search for peace [in
the Middle East] not by imposing peace or making life and death decisions for others;
that· must be the responsibility of the leaders and the people of the region. Rather,
[America's] role is to facilitate negotiated compromise and to underwrite reasonable
risk-taking. And that is exactly what we 've done. "
President Clinton
August 24, 1994
Teleconference with the B'rith Convention
For almost half a century, administrations of both parties have understood
America's vital interests in the Middle East: to ensure Israel's security and to guarantee
unimpeded access to oil. Experience has taught us that events in the region can directly
influence our well-being -- by raising the price of oil and threatening our economy, or by
fueling the kind of terrorist extremism witnessed in the World Trade Center bombing in
New York. As a result, American soldiers have risked their lives in Operation Desert
Storm and other efforts defending our vital national interests. And the United States has
worked tirelessly to achieve a comprehensive peace between Israel and its Arab neighbors.
Never before have we been closer· to that goal.
·
)
We have witnessed extraordinary progress in the Middle East. Credit belongs to the
leaders and courageous people of the nations of the region. But in each of these instances,
countries have looked to America's leadership to help move them towards a peaceful
settlement. President Clinton has been actively involved in the handshake of peace between
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•
crafted such efforts to advance America's interests. Under President Clinton's leadership,
for example, the United States has deployed more than 700 peacekeepers in the Former
Yugoslav Republic of Macedonia to prevent an expansion of the Bosnian conflict that could·
imperil stability in Europe. There, as elsewhere, peacekeeping operations can effectively
support our national security interests.
But President Clinton is determined to improve the way these international efforts
are conducted. On the basis of a comprehensive review, Reforming Multilateral Peace
Operations, the U.S. will make disciplined choices about where and when we support
multilateral peace operations. President Clinton will ensure that our engagement abroad
remains selective, ·focused on the challenges that are most relevant to our interests, and that
United Nations peace operations are carried out with clear objectives and a definite
endpoint in mind. The President will also reduce our share of UN peacekeeping payment
from 30% to 25% of the total UN peacekeeping budget this year, and get other countries to
. shoulder their fair share.
America's willingness to work for negotiated compromise and contribute to
maintaining the peace builds on a common-sense principle: Our national security is better
protected when we help resolve potentially dangerous conflicts before a conflict erupts. By
acting as a peacemaker and mediator when asked, and by contributing to peacekeeping
effortS when appropriate, the United States advances its interests while sharing the burden
with our allies.
11-21
�•
more likely to provide people with the economic and political tools to build a future in their
own countries. Expanding the community of democratic nations enhances the physical and
economic security of all Americans: it reduces the risk that the United States will have to
use military force to defend itself or its allies, stems the flow of refugees to our shores, and
ultimately increases opportunities for U.S. exports.
Helping build more democratic nations also marries our self-interest with our values;
Americans gain as freedom and liberty expand their reach around the globe.
In the past few years, numerous nations have broken the shackles of repressive
government and turned toward democracy. The Clinton Administration •s strategy is to
help democracy and markets survive and expand in countries where we have the strongest
security concerns and where we can make the greatest difference: in nations with large
economies, nuclear weapons, critical locations, or the potential to generate major flows of
refugees into our nation. The United States has a pragmatic commitment to help freedom
take hold where it will help us most.
Over the past two years, ·President Clinton has taken decisive steps to support
democracy in some of the most vital parts of the world -- in Russia and in other states of·
the former Soviet Union, in Central and Eastern Europe, and in our own hemisphere. At
the same time, the President has sought to increase respect for fundamental human rights in
all states.
The Initiative
"Democracy is rooted in compromise, not conquest. It rewards tolerance, not
hatred. Democracies rarely wage war on one another. They make more reliable
partners in trade, in diplomacy, and in the stewardship of our global environment.
Democracies . with the rule of law and respect for political, religious, and cultural
minorities are more responsive to their own people and to the protection of human
rights."
President Clinton
September 27, 1993
Address to the UN General Assembly
c\.
"
The Clinton Administration has strongly supported the democratic and free market
transformation of the nations emerging from the former Soviet bloc because America has a
tremendous stake in the success of this historic process. The course of events in Russia,
Ukraine, other newly independent states and nations in Central and Eastern Europe, will
have a critical impact on our nation.
11-23
�markets in our hemisphere. As a result, regional stability has increased and trade
opportunities have multiplied.
In Haiti, a ~ombination of vigorous diplomatic pressure and the threat of
overwhelming U.S. military power convinced the Haitian generals to depart. Then, the
United States led a multinational coalition that peacefully restored President Aristide and
his constitutionally established government. American and other coalition troops have now
created a secure environment for the Haitian people which has ended the dangerous flight
of refugees to our shores. Our success has helped Haitians breath life back into the
political institutions of their fragile democracy. Debate has replaced dictatorship and the
government is seeking to serve all the citizens, not just the elites who have dominated Haiti
for so long. The United States and others are working with Haitians to train a new police
force, build judicial institutions, and hold free and fair elections.
At the end of March 1995, we will turn over responsibility to a United Nations
peacekeeping force that will include about 2,500 U.S. troops. The UN force will help see
Haiti through the parliamentary elections this spring and the presidential elections in
December, and fmish the job of training and deploying Haiti's civilian police. With
democracy twice validated through elections and a new security force in place, the UN
mandate will be complete and American troops will leave Haiti by February of 1996.
Last year, President Clinton also brought together all 34 democ~atically elected
leaders of the Western hemisphere at the Summit of the Americas. The Summit's
nwnerous initiatives and particularly its agreement on free trade will help deepen the
democratic trend and enhance stability in the Americas. In Cuba, the Administration will
pursue its efforts to help promote a peaceful transition to democracy so that, at long last,
the Cuban people can join the community of free nations.
~
.;
The President has been steadfast in his support for democracy in other vital areas.
The Clinton Administration. played an aggressive role in South Africa's transition to
democracy and in its efforts to overcome the divisions of the past, helping to turn it into a
powerful model for democratic reform in Africa and beyond. The United States supported
the country's first free, multiracial elections with $435 million in aid. Following President
Mandela 's election, the Administration reaffirmed its co~tment with a $600 million
trade and ·investment package. This support will benefit not only South Africans but
Americans as well, for it will generate increased trade and export opportunities in a
dynamic market. The United States also encouraged nations like Mozambique and
Cambodia along the path to democracy, and worked to help stop a democratic reversal in
Guatemala.
·
Because there can be no democracy absent respect for hwnan rights, President
Clinton has also promoted hwnan rights throughout the world -- without arrogance but
11-25
11-29
I:
-------
�Background
In Haiti and in Cuba, our vigorous responses to crises allowed us to fulfill both our
humanitarian and immigration control objectives. The United States protected our borders
while providing a safehaven to Cuban and Haitian migrants at Guantanamo and elsewhere.
Then, by establishing security and restoring democracy in Haiti, the United States mad.e it
possible for more than 20,000 Haitian migrants to leave our facilities and return home. The
once massive outflow of refugees --which reached a high of 16,000 in July --has stopped,
sparing American taxpayers the. cost of dealing with massive immigration and ensuring
regional stability.
•
Protecting our environment
"Let us also work far more ambitiously to fulfill our obligations as custodians of this
planet, not only to improve the quality of life for our citizens and the quality of our air and
water and the Earth itself but also because the roots of conflict are so often entangled with
the roots of environmental neglect and the calamity offamine and disease."
President Clinton
Address to the UN General Assembly
September 27, 1993
A range of environmental problems jeopardize our security -- deforestation,
uncontrolled population growth, industrial pollution, loss of biodiversity, ozone depletion,
and global climate change. Confronting these challenges requires forging partnerships
among governments and exercising forceful international leadership. The Clinton
Administration has done both. In the past two years, the United States negotiated and
signed the Desertification Convention, which establishes general obligations for all
governments to cooperate in stemming the tide of desertification.. The health of our
environment, the availability of resources, and the elimination of famine and malnutrition
all depend on our efforts to prevent the encroachment of deserts. The United States also
signed the Biodiversity Convention which addresses ~ wide range of cf!!ical issues -- from
nre~nT~tinn _!:\nA __ ~.... ~n:--1-1---
c
I
·--·--
CHALLENGE #1: INTEGRATING THE DEFENSE AND COMMERCIAL
SECTORS
Background
.
was the basis of America's military advantage throughout the
t
. tain that technological edge in a post-Cold War era
Supenor technolo~
Cold War. We must continue ~ mam
· __ but we must do it on a
. that still includes threats to our mterests,. valu~~fan~ s~:~ning our edge in this new
tighter. budget and in a world of glohbal co~pe~ to~ay the Department of Defense acquires
environment requires fundamental c anges m e
.
.
the technology to support its weapons systems.
DoD must break down the barriers created over the last 30_ yem:s betwee~ the
.
. ..
D D' verreliance on military spectficatlons and tts
defense and ctvthan sectors.
o ~o Id
commercial firms to refuse to do business
c~bersome pro:em::.;:~: th~e d~ o:~:all off their defense produc~on. As a
::!tt~~Dal~!ebe~~me reliant on an increasingly segregated defense industrial. base.
First the cost of supporting a segregated defense
.
_such a =t~~~~na~ohibitive." Unit 'production costs of weapons ~ystems have
mdustrlal base
p
.
World War II --not counting inflation. For example,
increased 5 to 7 percent a year smce
hi
irtually identical to chips sold commercially
the military is paying $10 for computer c ps v
for $1.
. .
u
-~--
propriate
..;J....nlno;P~ thP. rlefense induStrv is no longer the leader.
! _ _ _ _.. __. . . . .
�The Initiative
l
President Clinton's strategy for ensuring that the military has affordable, leadingedge technology can be summed up as: acquisition reform plus investment in dual-use
technology.
Fundamental reform of the defense acquisition system is the essential foundation
for DoD's dual-use strategy. At the Adnlinistration's urging, Congtes~ passed the landmark
"Federal Acquisition. Streamlining Act of 1994," which will significantly improve the way
the government buys $200 billion worth of goods and services a year, from software to jet
aircraft.
·To complement congressional reforms, Defense Secretary Perry in June 1994,
announced a dramatic reversal of the Pentagon's longstanding policy toward "milspecs,"
instructing the military services to use commercial rather than military specifications and
standards "unless no practical alternative exists." This new policy will mean the end of the
$500 coffeepot and the $10 computer chip.
Acquisition reform will also help defense firms diversify into commercia.I markets,
where -- freed from the weight of government red tape and special requirements -- they can
be globally competitive. Such diversification will help these firms preserve high-paying
jobs and will assure the survival of the industrial base we need to maintain our national
security and strengthen our economy.
Building on this foundation, DoD's new dual-use strategy has three key pillars.
First, the Pentagon is bolstering its support for dual-use R&D to exploit the potential
of advanced commercial technologies to meet defense needs. DoD's Advanced Research
Projects Agency (ARPA) is targeting investments iii focused "thrust areas" -- computers and
software, electronics, sensors, simulation, and manufacturing -- to ensure that commercial
fmns in this country can supply the superior technologies that will maintain our military
advantage.
The Technology Reinvestment Project (TRP), managed by ARPA with extensive
participation by the military services, is DoD's largest dual-use initiative. Unveiled by
President Clinton in early 1993, the TRP has awarded cost-shared grants totaling $820
million to about 250 projects involving more than 2,000 firms, universities and other
participants. Winning projects --selected from thousands that applied --were chosen solely
on the basis of technical merit.
A key to the TRP's success is its emphasis on industry partnerships and cost
11-35
'
CHALLENGE #2: ·EASING THE TRANSITION
Background
"... [W]e must [act so as not to]leave the men and women who won the Cold War
out in the cold.
President Clinton
March 12, 1993
Radio Address to the Armed Forces
The defense budget peaked in 1986 and has been declining ever since. The result is
that from Southern California to Long Island and Connecticut, communities, companies and
workers who depended on defense are struggling to fmd new ways to earn their livings.
.
This drawdown is smaller than those following World War II, Korea and Vietnam,
and its economic impact may be masked by our robust job growth during the past two
years (nearly 6 million new jobs). But the impact on regions where defense firms are
concentrated or where bases are closing is severe.
Still, these hard-hit commnnitiA"
J..--·- ---' -·
�sharing. Winning projects have matched every federal dollar with $1.33 of non-federal
funds -- a total of about $1.1 billion. This cost share ensures industry's commitment to
projects and lays the foundation for industry to assume the full cost of product
development.
TRP projects are directed at meeting military needs in a range of areas: low-cost
night vision, that will allow U.S. troops to "own the night" through use of infrared sensors
made 10 times cheaper by leveraging new commercial technology; high-density data
storage, vastly increasing the immediate ·access of our front-line soldiers to the best
information and intelligence; battlefield casualty treatment, using new sensors and
information systems to help rapidly find, diagnose and treat injured soldiers on the
battlefield; affordable composite aircraft strudures, using lightweight, polymer
composites for aircraft engines to increase the performance and range of military aircraft,
while lowering the cost of repair and maintenance; detection of chemical and biological
agents, through the use of sensors, to protect our troops in the battlefield.
,.
The second pillar of DoD's dual-use strategy is the integration of defense and
commercial production. The Pentagon is pursuing this goal in two ways: (i) supporting
efforts to transition defense technologies to commercial applications, to make those
technologies more affordable and accessible to the military; and (ii) helping U.S.
manufacturers become more flexible, so they can produce custom military products
alongside commercial versions of the same product.
To illustrate, a few years ago, DoD pw·sued MIMIC (microwave monolithic
integrated circuit) technology for military radar as a strictly military development, but the
high costs prohibited widespread defense use of the devices. Now, DoD encourages
contractors to pursue commercial applications -- for example, in collision avoidance
systems for automobiles, satellite communications, and signal processing for air traffic
control -- making the devices more affordable for the Pentagon. A joint venture between
Hughes Aircraft and Delco Electronics produces the military device and a commercial
version on the same production line, with a changeover time of less than two hours.
The third pillar of the dual-use strategy is DoD's investment in initiatives that
encourage "insertion" of commercial technologies and products in the development,
production and support of military systems. Successful insertion requires that weapon
systems be designed from the outset to incorporate commercial rather than defense-unique
materials, technologies and components. An example: in 1994, when DoD solicited
proposals to develop an unmanned aerial vehicle, contractors were told only a maximum
cost ($10 million each) and what the vehicle had to do; it was up to them to determine how
to· meet_theseJeaniremen_Gi:v.en-tbk-crutt-~ilinn----o-.hd.;~......_.,.~ __.n;___~-I
I.
~
I.
I
I
i
I
The Initiative
Diversification. To speed economic adjustment, the Clinton Administration's
defense reinvestment initiative includes substantial investments in advanced technologies as
well as more targeted support for defense-dependent workers, firms and communities. .
However, defense-dependent regions mu5t take the lead in developing their o~
diversification strategies. The Federal government's job is to contribute resources with
which workers, firms and communities can pur:sue these strategies.
This approach is working. In Silicon Valley, for example, local defense firms are
diversifying into commercial markets in communications systems, advanced computing, and
environmental and sensing technologies. Groups such as "Joint Venture: Silicon Valley" -a public-private consortium established in 1992 -- are brokering partnerships between
defense and commercial firms, putting entrepreneurs in touch with financial, technical and
business resources, and providing retraining and job placement for displaced defense
workers. To help support these activities, the Commerce Department awarded a small grant
to Joint Venture: Silicon Valley, and the Labor Department is funding local retraining
efforts. Several Silicon Valley firms that are developing flat panel displays, high-density
data storage devices and other dual-use technologies have won cost-shared awards from
DoD, through the Technology Reinvestment Project. These awards-- which are made
strictly on merit, with no regard to region -- illustrate the strengths possessed by regions
•
· ·· ~-' __ ... _ --...1 +41>1..nnlna1P~ tn meet defense needs.
·
'
I
�Base Closings. To speed the economic recovery of communities where bases are
closing, the President in July 1993, announced a five-point program whose key goals are
rapid redevelopment and the creation of new jobs through:
•
•
•
•
•
allowing DoD to transfer base property at low cost or no cost
fast-track environmental cleanup
assigning "transition coordinators" to every major base
making larger economic planning grants
easy .access to transition help for workers and communities
And the Administration lost no time putting this plan into action. For example; it:
•
Dispatched an interagency "SWAT" team to every community with a major facility
on the list of bases selected in 1993 for closure. Department of Labor staff worked
With each community to design a customized training and reemployment plan for
civilian base employees as well as separating military personnel. Reemployment
centers were established up to two years in advance at major bases scheduled for
closure.
•
Awarded planning grants to all 29 of the most seriously affected communities on the
1993 base closure list, through DoD's Office of Economic Adjustment. The ·awards,
on average, were made within two weeks of receiving complete applications.
Congress endorsed the President's approach by enacting the Base Closure
Communities Assistance Act. Among other things, this Act allows base property to be
transferred at a discount to local redevelopment authorities, provided that any profits on
subsequent sales and leases be shared with the federal government. ·
The President's plan has already produced results:
•
Residents of Rantoul, Illinois took advantage of federal assistance programs in the
Departments of Defense, Transportation, Labor and Commerce to transform Chanute
Air Force Base into an asset for economic growth. They created 1,200 jobs on the
base within a year of closure.
•
At Sacramento Army Depot, with the assistance of DoD and Labor placement and
training programs, the Pentagon eliminated all 3,000 civilian jobs with no
involuntary terminations. By early 1995, Packard Bell will be manufacturing
computers in the former Army facility. The company plans to employ 1,300 new
workers.
•
At the Philadelphia Naval Shipyard, new rules that permit 10-year leases, leasing of
)
f
11-39
�Navy equipment and hiring of former shipyard workers enabled a New Jersey
machine shop to move onto the site, retain a $2 million contract, and create 200 new
jobs.
·
an
Shipbuilding. The Administration has also implemented
aggressive Shipbuilding.
Initiative to enable U.S. shipyards to reenter commercial competition. This initiative has:
•
Provided increased funding and more generous financing terms under the Ship
Financing program, allowing U.S: yards to compete for international business for the
frrst time in nearly 30 years. In August, the President announced approval of two
applications for loan guarantees and the n:ceipt of two other applications which,
when executed, will result in the preservation of 7,100 U.S. shipbuilding jobs.
•
Secured passage of the five-year, MARITECH program, with funding of over
$200 million, to support R&D on ship design and construction. ·Transportation
Secretary Pena awarded the frrst $30 million in matching grants in May 1994.
•
Concluded an agreement at the OECD (Organization for Economic and Cooperative
Development) to end longstanding foreign shipbuilding subsidies.
•
Increased export promotion efforts on behalf of U.S. yards.
•
Will reintroduce legislation to make U.S. shipyards more globally competitive by
bringing U.S. construction standards in line with international standards.
11-40
'
�Case Studies
Selected TRP Projects:
Dual-Use Technology to Meet Defense Needs
Infrared Sensors
Cooled infrared· sensors helped U.S. forces in Desert Stonn "own the night." Even the
less expensive variety of sensors (uncooled), however, are too expensive at this point for wide
adoption by combat forces. But, with upgraded perfonnance and lower cost, uncooled sensors
could have a wide array of military uses -- from missile guidance systems, to "lights out" night
driving, to equipment that would allow our soldiers to fight under cover of night, fog or smoke.
Thus, the Pentagon places a high priority on their development.
But to generate the kind of R&D necessary to upgrade perfonnance and lower cost,
commercial applications must be promoted. Such applications could include finding power line
leakages, seeing through smoke during tires and, eventually, aiding all night drivers.
The TRP Infrared Sensor project is aimed at improving perfonnance and lowering costs
at least tenfold through commercial approaches to development and eventually through
economies of scale. As costs fall and the market expands, the· armed services will be able to
meet their needs from an integrated civilian-military base, adding its particular requirements to
purchases from an active industry.
·
TRP projects are supporting three different technical approaches for improvement of
uncooled infrared sensors, in teams led by Loral, Texas Instruments, and lnframetrics.
Casualty Care
•.
'·"~
\:'
f
The first hour after injury on the battlefield is critical. A wounded soldier's chance of
recovery depends on whether he ·receives prompt diagnosis and care. The proportion of
wounded who survive this "Golden Hour" has not altered since the Civil War.
TRP projects support development in two areas of modem technology that hold out the
hope of greatly improving the proportion of survivors: sophisticated sensors and displays that
can allow accurate monitoring of an injury and the making of a diagnosis; and modem
infonnation systems, and their management and distribution.
The goal is for every soldier going into combat to have sensors and an identifier
(like a bar code) in place. If the soldier is wounded, doctors away from the battlefield will get
the information needed for diagnosis, and will be able to give treatment instructions to medics
on the scene. Remote diagnosis and linkage can also help paramedics save civilian lives at the
scene of accidents.
The TRP projects on casualty care would meet military needs while also integrating
civilian and military medical technologies more fully.
The TRP approach to casualty care is evident in a project on a Digital X-Ray System for
Trauma and Battlefield Applications. General Electric has teamed with EG&G in a 2-year
program to develop such a system. It will allow direct digitization of the X-Ray, with no use of
film, and will enable immediate transmission of the X-Ray to doctors _remote from the battlefield
or accident scene. Besides its great benefits for wounded soldiers and injured civilians, digital
X-Ray promises a competitive advantage forGE by the year 2000.
11-41
�Case Study:
The Massachusetts Strategic Skills Programs:
A Job-Savings Defense Diiversification Strategy
Beginning early in 1993, six small and medium-sized defense firms in
Massachusetts took part in a retraining project for managers and workers to help fit
them for competitive performance· in the world of commercial production. It was an.
uphill climb for most of them -- espeCially the managers -- but it was worth it. As of
early 1995, all of the firms have found new commercial customers and none have had to
lay off workers. Several of the firms have added workers.
The project was supported by a $367,000 grant from the Department of Labor
and carried out by the ·Massachusetts Industrial Services Program (ISP). The project is
part of a small DOL demonstration program on defense diversification, which is testing
ways to avoid layoffs in defense firms and cmate job opportunities for defense workers.
The training was based on up-to-date ':oncepts of the high-performance work
place, involving team building, worker respoilsibility and participation, cross-training· for
flexible work teams, and management that relies on leadership rather than top-down
command. Training also included worker skills such as good basic reading and math,
advanced measurement techniques, and computer literacy and applications; as well as
management skills in quality issues, financial resources, and new product planning.
The companies that have already found new commercial customers took
advantage of core abilities in turning defense technologies to commercial applications.
For example, a fnm expert in making minuscule electronic devices started making small
electronic components for medical instrumen.ts. Another, which made indestructible
furniture for military outposts has u5ed this 1cechnology in making products for fast food
restaurants and hospitals.
11-42
r
�
Dublin Core
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Title
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Don Baer
Creator
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Office of Communications
Don Baer
Date
A point or period of time associated with an event in the lifecycle of the resource
1994-1997
Is Part Of
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<a href="http://clinton.presidentiallibraries.us/items/show/36008" target="_blank">Collection Finding Aid</a>
<a href="https://catalog.archives.gov/id/7431981" target="_blank">National Archives Catalog Description</a>
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2006-0458-F
Description
An account of the resource
Donald Baer was Assistant to the President and Director of Communications in the White House Communications Office. The records in this collection contain copies of speeches, speech drafts, talking points, letters, notes, memoranda, background material, correspondence, reports, excerpts from manuscripts and books, news articles, presidential schedules, telephone message forms, and telephone call lists.
Provenance
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Clinton Presidential Records: White House Staff and Office Files
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William J. Clinton Presidential Library & Museum
Extent
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537 folders in 34 boxes
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Economic Conference
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Office of Communications
Don Baer
Identifier
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2006-0458-F
Is Part Of
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Box 23
<a href="http://www.clintonlibrary.gov/assets/Documents/Finding-Aids/2006/2006-0458-F.pdf" target="_blank">Collection Finding Aid</a>
<a href="https://catalog.archives.gov/id/7431981" target="_blank">National Archives Catalog Description</a>
Provenance
A statement of any changes in ownership and custody of the resource since its creation that are significant for its authenticity, integrity, and interpretation. The statement may include a description of any changes successive custodians made to the resource.
Clinton Presidential Records: White House Staff and Office Files
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1/12/2015
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42-t-7431981-20060458F-023-008-2014
7431981