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001. fax
SUBJECT/TITLE
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John Wancheck to John Arzack and Chuck Man, re: Earned Income
Credit [partial] (1 page)
12/2/98
RESTRICTION
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EITC [Earned Income Tax Credit]
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�in reducing child poverty. In fact, it allowed us to lift an additional two million families out of
poverty last year alone
I knew that when our nation was giving families like Amy's very few of the tools they needed
to make the most of their lives, that was wrong.
were two of this Administration's proudest victories ~ and
The leaders of the world's major economies have agreed to create a precautionary line of credit
to help countries with sound economic policies ward off the global crisis before it reaches their
shores.
�EXECUTIVE SUMMARY
•
The strongest labor market in a generation has resulted in particularly large gains among
low-wage and disadvantaged workers. From 1979 to 1993, the real wages of low-wage
workers fell sharply. Recently, however, low-wage workers have experienced sharp rises
in real wages: For low-wage men, wages are up since 1996 by 5.7 percent after inflation.
And for low-wage women, real wages have risen 6.1 percent.
•
These strong wage gains have been accompanied by a steep decline in unemployment for
low-skilled workers. In 1993, 11.1 percent of workers without a high school degree were
unemployed; today that rate has fallen to x.x percent. Among high school graduates
(with no college), the rate has fallen from 6.6 to x.x percent. Low-wage workers are thus
gaining both by working more and by earning more for every hour that they work.
•
The effects of a strong economy have been reinforced by successful policies designed to
make work pay. Expansions in the Earned Income Tax Credit (EITC) since 1993 are
supplementing the incomes of low-wage working parents. The EITC is one of our most
successful programs for fighting poverty and encouraging work:
^r,
Lifts more than 4 million Americans out of poverty. The EITC lifted 4.3 million
Americans out of poverty in 1997 ~ more than double the number in 1993.
Dramatically reduces child poverty. In 1997, the EITC reduced the number of children
living in poverty by 2.2 million. This report finds that over half of the decline in child
poverty between 1993 and 1997 can be explained by changes in taxes, most importantly
the EITC.
Encourages work among single women with children. In 1992, 73.7 percent of single
women with children were in the labor force. In 1997, 84.2 percent of such women were
in the labor force. The percentage of single women with children who received welfare
and did not work has been cut by more than half — from 19.3 percent in 1992 to 8.3
percent in 1997. Academic studies suggest that the increase in labor force participation
among single mothers is strongly linked to the expansion in the EITC.
•
Increases in the minimum wage have been important in raising the earnings of low-wage
workers. Empirical research suggests that recent minimum wage increases have had little
or no adverse effect on employment.
•
The combined effects of the minimum wage and the EITC have dramatically increased
the returns to work for families with children. Between 1993 and 1997, families with one
child and one earner who worked full-time at the minimum wage experienced a 13
percent increase in their income, after inflation, just because of these two policies alone.
Similar families with two children experienced a 26 percent increase in their income.
�Final 12/1/98
Paul Glastris/Michael Waldman
PRESIDENT WILLIAM J. CLINTON
REMARKS TO THE DLC
CORCORAN GALLERY OF ART
WASHINGTON, DC
Wednesday, December 2,1998
I will never forget the day, seven years ago, when I spoke before the Democratic
Leadership Council in Cleveland. At that time our party was struggling, our nation was
suffering, and the DLC was just a small group of like-minded individuals with big plans. In
Cleveland that day I said that we must give the American people "a new choice, rooted in old
values, a new choice that is simple, that offers opportunity, demands responsibility, gives citizens
more say, provides them with responsive government-all because we recognize that we are a
community, we are all in this together, and we are going up or down together."
Opportunity; responsibility; community-these were the words we used to define a new
approach to government and politics, one rooted in our most enduring values but shaped to
match the demands of the information age. We would not seek to dam the currents of economic
change; to do so would decrease opportunity and doom our children to diminished dreams. But
also we would not-as Americans, and as Democrats, we could not-tell our people that they had
to sink or swim on their own. We realized that the way to advance the spirit of the New Deal
was not to preserve its programs in amber but to act in the spirit of FDR himself, who said in his
great Commonwealth Club speech in 1932 that "new conditions impose new requirements upon
government and those who conduct government." We said we were New Democrats. We called
our ideas the Third Way.
Now, our ideas were not universally welcomed or even wholly understood—by the press,
by the Republicans, or even by some in our own party. But fired by the conviction that America
could lead once again, we won the Presidency in 1992. Insisting that our way was the only way
to build a bridge to the 21st Century, our party won the White House again in 1996-the first time
a Democratic president has been reelected since FDR. And as we Democrats have stepped
forward with a modem and bold approach, our party has regained the trust of the American
people.
Last month, standing strong and united on a platform of fiscal responsibility,
strengthening Social Security, renewing our public schools, and protecting people in the new
health care marketplace, our party won an historic election victory. As you well know, this was
the first time the President's party has gained seats in a sixth year congressional election since
1822. I will point out that after the last time that happened, the other party disappeared!
And those members ofthe other party who this year had the greatest electoral success
campaigned with language and even policies that are strikingly similar to ours. When
- 1-
�Republican governors stand in front of cloth banners that read "opportunity, responsibility,
community," it may not be "the sincerest form of flattery," but we should take it as flattery
nonetheless.
In fact, these same ideas are reviving center-left political parties throughout the
industrialized world. From Great Britain to Germany, Greece to the Netherlands, new center/left
governments in Europe are using their strong majorities to cut deficits, to retool welfare systems
to reward work, and to remake the social compact so that opportunities expand for all of their
citizens.
Far from Europe, in Brazil, bold actions by a like-minded President Cardoso have tamed
that country's notorious inflation, pointing the way for a new model for development in
emerging democracies, one that does not over-rely on the heavy hand of government or on the
invisible hand of markets. And it all started with the DLC. A political movement begun by
people in this room a decade ago is today literally sweeping the world.
We have done more than fashion a new political approach, well packaged and well
marketed. We have found;the right way for a leading industrial nation to thrive in the 21 st
Century. We have led the waylo'a^ew'ISmOTcan cpnsensus~a way in which the values and
vision that hiave always animated the American center can once again guide our nation. Today, it
is clear, the Third Way has become the American way.
1
r
The question is: Why? Why have our ideas become so widely and profoundly accepted?
As we move forward, I ask you to remember three lessons.
First, and fundamentally, our ideas have met the most important test: they work in the
real world.
When I ran for President, the title on the bestseller lists asked the question on people's
lips: "America: What Went Wrong?" But as I said in my first Inaugural Address, "There is
nothing wrong with America that cannot be cured by what is right with America." Today, after
seven years of remarkable effort by the people of this nation, the question to ask is: "America:
What Went Right?"
We attacked our problems with a full array of new approaches, many of them hammered
out here at the DLC — welfare reform, community policing, raising the Earned Income Tax
Credit, creating AmeriCorps, and putting in place an economic plan that slashed the deficit,
spurred lower interest rates, and sparked a boom in private sector investment.
By almost every measure, our families, communities, and country are stronger, healthier,
and more prosperous. Crime, divorce^teen^pregnancy.^mg^abusejatessrall.have fallen. Welfare
caseloads have plummeted, and wages are rising. In a few weeks our economy will break
postw^^eords^And the federal deficit, that glaring symbol of Washington's gridlock, is ...
gone/ '
4
-2-
b
�Best of all, American has begun-just begun-to regain its legendary faith in itself, to
believe that we can meet challenges together, that the system can be made to work for all
Americans, that tomorrow just might be better than today.
The second reason why our ideas are ascendant is that they are true to the values and
the common sense of ordinary, hardworking citizens. For too long the political system treated
education, health care, crime, the environment as if they were merely battles over ideology not problems to be solved but issues to be exploited. The idea was to divide and conquer the
electorate-to split blacks from whites, Northerners from Southerners, the middle class from
the working class.
But truth be told, Americans donltwanWoitoe divided, like-that. It of fends, their deepest
values^of community and national unity and mutual responsibility. It offends their common
sense. We said: Americans should not be forced to choose between family values or
government help for the needy; locking up criminals or preventing crimefromoccurring;
high-wage jobs or globalfreetrade; economic growth or a cleaner environment. We say those
choices are false; there is no reason we can't be tough on crime and tough on the roots of
crime. No reason we can't insist that able-bodied people on welfare work but also offer
training and child care to enable them to work. No reason we can't offer opportunity for all
and demand responsibility from all.
The third reason our ideas have been so successful is that they recognize that a modern
nation needs an effective government - n G ^ ^ g ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ b w ^ ^ ^ s m n ^ l s ^ ^
that is smaller, mbre flexible, stronger, 'and'tett^able.to.yeei^^haQeilg^^^^r^. A
gl^irern^
best can do for themselves - but
givjj|||^^
the
|iSmatwn^gi»^^''
'
We said federal bureaucracies designed for the industrial age had become outmoded.
But we didn't take the approach of "Chainsaw" Al Dunlop - we took the approach of Vice
President Al Gore. Under his leadership, federal agencies have been reinvented. They have
shed needless procedures, regulations, and layers of management to focus on customer service
and results that matter. We have the smallest federal government since the last time John
Glenn orbited the Earth, but one that does more with less, just as corporate America has done.
NASA now conducts six launches per year rather than two per year as it used to, with fewer
staff and a smaller budget. It is now clear: Americans do value government-when
government gives them value.
America today is strong in the world, prosperous at home, and moving with enthusiasm
towards a future of unlimited possibility. Now, we must use this moment of good fortune to
meet our long term challenges. We must show that the Third Way is the answer not only to the
remaining challenges of the 20th Century, but to the challenges of the 21st Century as well.
In the 20th Century, we built a safety net to give dignity to our parents in their
-3-
�lastvyears. In the 21st Century, we must show that we can strengthen the Social Security
system so my generation can retire without bankrupting my daughter's generation.
In the 20th Century, we lifted millions of Americans into the world's first-ever mass
middle class through strong public schools. In the 21st Century, we must show that we can
revolutionize those schools so they can continue to transform the lives of our children.
In the 20th Century, we found a way to tame the savage cycles of boom and bust here
at home. In the 21st Century, we must show that we can tap the dynamic power of a free
international economy, limiting its volatility and giving it a human face.
We have already accomplished more than any of us could have dreamed of that day in
Cleveland in 1991. But history will not judge us solely by what we have accomplished up
until now. The real test of our ideas is whether they outlast us, whether they provide a strong
foundation for our children, for our party, for our nation, for the world, well into the 21st
Century. I am confident they will. Thank you and God bless you.
###
-4-
�Draft 12/3/98
Weiss
PRESIDENT WILLIAM J. CLINTON
REMARKS ON JOBS AND THE EITC
THE WHITE HOUSE
December 4,1998
Acknowledge: Sec. Herman. Gene Sperling [whose tireless fight for the EITC came directly
from the heart]. Amy Hillen.
One of the main reasons I ran for President is because I deeply believed that people like
Amy and her family could achieve great success ~ if we could just unstack the deck. I knew that
when our nation was taxing people with modest incomes into poverty, that was wrong. I knew that
when a mother was rising at dawn, putting in an honest day's work, and still she could not lift her
family out of poverty, that was wrong too. I knew that we had to create new incentives to help
people climb up the economic ladder ~ instead of kicking out the lowest rungs.
7
And that is why in 1993 we fought for, and won, a dramatic tax cut for working families like
Amy's by doubling the Earned Income Tax Credit. And that is why, two years ago, we fought for,
and won, a major increase in the minimum wage ~ and why we are fighting to increase it again.
These increases in the EITC and minimum wage were two ot the moStiTnportai^T;tiCns"wel^ld
possibly take to fight poverty and encourage work.
Today, we are releasing a new analysis prepared by the Council of Economic Advisors that
shows just how successful these actions have been for America's families. It shows that our EITC
expansion has been a major factor in encouraging work among single mothers and has been
responsible for much of our strong progress in reducing child poverty. It also reports that the
increase in the minimum wage has raised the earnings of about 10 million workers ~ while doing
little or nothing to reduce the number of jobs.
V
And the combined effects of increases in the EITC and the minimum wage have been
, . nothing short of remarkable. Since 1993, families with two children and one-parent working full
time saw their income rise by more than $2,700 after inflation just because of these two policies
X /iTSlone. The increases in the EITC and minimum wage that we fought hard to achieve have
yf ^ lived up to their promise. They are truly making work pay for millions of American families.
Of course, our growing economy is also greatly helping our families to make ends meet/ In
,
a few weeks, our economy will achieve the longest peacetime expansion in American history
4^*—
And more important, all economic groups in America are being lifted by this rising tide.
Just this moming, the Labor Department reported that we continue to enjoy the fastest real
wage growth in 20 years. For low-income men and women, wages are up approximately 6% since
1996 alone. And these strong wage gains have been accompanied by a steep decline in
unemployment both for workers with college degrees an^l those without.
Overall, in November, our economy added TK
And the nation's
�unemployment rate TK ~ while inflation has remained low and stable, [need soundbite here?]
But while our economy continues t^Tgain strength, we do know that the shocks abroad can
reverberate in important sectors of our own economy. Boeing has had to lay workers off because
people can't buy the airplanes they've ordered; the steel industry has been overwhelmed by imports
from countries desperate to sell at any price; farm prices are at record lows in the high plains.
Clearly these are symptoms of the global financial crisis and in particular the economic problems in
Asia. And that's why I have given such a high priority for more than a year now to trying to limit
the spread of thefinancialcontagion, reverse conditions in Asia, and restore economic growth
around the world.
I belieyejW efforts are yielding positive results. Countries around the world are cutting
interest rates to spur global growth. The U.S. Congress has fully funded our obligations to the
International Monetary Fund. Together with Japan we have launched an initiative to help relieve
crushing debt burdens in Asia and revive the private sector there. In countries like South Korea and
Thailand there are signs that the worst of the crisis has come and gone. And our efforts will
continue. We simply must continue to lead the world in restoring growth and in building a strong
financial and trading system for the 21st century.
Yes, America is blessed. Yes, our economy is doing very well. But if we are to continue to
add new jobs, raise wages, cut poverty, and give families like Amy's the tools they need to live up
to their dreams, we must continue to address head-on the challenges of the global economy. i#"we
workJogether^aftd-ifTye keep lamilies like Amy 's in mind, 1 know we~CHn~do just that. Thank you
and God bless you.
###
Use
5
if
�http://www.pub.whitehouse.gov/uri-.../oma.eop.gov.us/1993/8/2/10.text. 1
•5*
THE WHITE HOUSE
O f f i c e o f t h e Press S e c r e t a r y
For Immediate Release
REMARKS BY THE PRESIDENT
AT EARNED INCOME TAX.CREDIT EVENT
^
, • :':<}ai'J*."V»l»/(.«-"^«i.:.(»-.c,ji.^.. .,
,
,
J
Room 450, O l d E x e c u t i v e O f f i c e B u i l d i n g
12:02 P.M. EDT
THE PRESIDENT: I don't want them t o miss t h e v o t e .
(Laughter.) This i s what i s known i s an excused absence f o r t h e
Congress.
(Laughter.) I want t o say a warm welcome and a word o f
thanks t o t h e R i s n e r s , t h e Dorseys and t h e Dikemans -- a l l o f them
f o r coming here. They're n o t used t o b e i n g p u b l i c speakers, b u t I
t h i n k t h e y d i d a f i n e j o b , don't you? (Applause.)
I ' d a l s o l i k e t o say a s p e c i a l word t o Mr. Dorsey. When
I was a boy, I c u t lawns f o r a l i v i n g , t o o , and nobody ever gave me
more t h a n I charged. (Laughter.) You're e i t h e r a b e t t e r salesman, a
b e t t e r g r a s s - c u t t e r , o r you had b e t t e r customers. (Laughter.)
41
I am so g l a d t o have these f a m i l i e s here today because
they emphasize t h a t a p i v o t a l p a r t o f t h i s economic p l a n i s
i n c r e a s i n g t h e earned income-tax c r e d i t which, more than a n y t h i n g
e l s e we c o u l d do, w i l l reward work --and f a m i l y and r e s p o n s i b i l i t y and
make a major down payment on^.el 'fare r e f o r m .
i
/
You hear<
Americans
independent., ^ ^
^.•^
i}f^^p^^^i^^^|«i^^^eing* a'Sfe** tcTffiaice'^encis""mief,not' b e i n g a b l e t o
cover' b a s i c c o s t s . The earned income t a x c r e d i t can h e l p them do
that.
I t i s a t e r r i b l y i m p o r t a n t p a r t o f t h i s o v e r a l l p l a n , which
not o n l y reduces t h e d e f i c i t by $500 b i l l i o n , b u t a l s o does i t i n a
f a i r way. H a l f o f t h e r e d u c t i o n comes from budget c u t s , o f t h e r e s t
-- f o u r - f i f t h s o f t h e r e s t comes from taxes on t h e upper income
people i n t h i s c o u n t r y , t h e upper s i x p e r c e n t , o n e - f i f t h from taxes
on f a m i l i e s w i t h incomes above $30,000 and below f o r couples
$180,000.
t
But t h e most i m p o r t a n t t h i n g o f a l l t o reward work i s
that t h i s w i l l
•we'll^ be.,3ble, t o . say^ha't^ii£. you/«wd-fk'MO 'hour's"a week and you have
n
•cfiliM^^i^i^'^5ur''''iwme, you w i l i i ^ b . f e ' ^ l i f t e d o u t o f p o v e r t y . I t i s a
e l e m e n t i l , p o w e r f u l and p r o f o u n c ^ p r i h e i p l e . I t i s n o t l i b e r a l o r
conservative.
I t should belong t o no p a r t y .
I t ought t o become p a r t
of t h e American creed. I t ' s n o t about more governmental o r s o c i a l
workers, o r more s e r v i c e s .
I t ' s about more g r o c e r i e s and a c a r , more
school c l o t h e s f o r t h e k i d s and more encouragement and hope t o keep
doing t h e r i g h t t h i n g .
These f a m i l i e s have made i t c l e a r e r than I
ever c o u l d .
l
r
One o f t h e t h i n g s t h a t I want t o emphasize i s t h a t i f we
ever want t o r e a l l y r e s t o r e t h e h e a l t h o f t h e American economy, i t
won't be enough j u s t t o b r i n g down t h e budget d e f i c i t o r j u s t t o have
good economic p o l i c i e s .
You have t o f i n d a way t o t e l l people t h a t
of 5
12/3/98 8:12 AM
�httpV/www.pub.whitehouse.gov/uri-.../oma.eop.gov.us/1993/8/2/10.text. 1
i|.tjhgy^^£jcjh^.d^..ansl..play by t h e r u l e s t h e y ' l l be able t o make i t ,
they^wi4*lSbepr.ewarded-.. ., The i n c e n t i v e system i n America has worked
against,that f o r t o o long.
>
You know, i t ' s amazing t o me how many American f a m i l i e s
s t i l l l i v e i n p o v e r t y . About 18 percent o f t h e work f o r c e , n e a r l y
one i n f i v e f a m i l i e s , have a worker and s t i l l do n o t reach t h e
federal poverty l i n e .
There a r e 36 m i l l i o n , a p p r o x i m a t e l y , low
income Americans; about 20 m i l l i o n o f them l i v e i n a f a m i l y t h a t
works -- w i t h someone working a t l e a s t p a r t o f t h e year; s i x m i l l i o n
l i v e i n f a m i l i e s where someone works a l l year round, f u l l - t i m e , and
the f a m i l y i s s t i l l i n p o v e r t y . And as I s a i d , where t h e r e i s a
f a m i l y o f f o u r , about one i n f i v e , o r 18 p e r c e n t , have i n s u f f i c i e n t
incomes t o l i f t them above t h e f e d e r a l p o v e r t y l i n e .
So i n s p i t e o f a l l the p r o - f a m i l y r h e t o r i c o f our
n a t i o n a l government f o r years, our p o l i c i e s haven't worked. I n f a c t ,
they've been going i n t h e wrong d i r e c t i o n . We need every American
who can t o work i f we're going t o compete and w i n i n t h e g l o b a l
economy. And more than ever, we need s t r o n g f a m i l i e s . This i s , as
you can see, n o t j u s t a pro-work p o l i c y , i t i s a p r o - f a m i l y p o l i c y .
We s h o u l d n ' t make i t harder t o work and support a f a m i l y .
We ought
t o make i t e a s i e r , and t h e people who do i t should be l i f t e d up as
examples o f t h e American i d e a l , n o t punished because t h e y ' r e t r y i n g
t o do t h e r i g h t t h i n g . That's what t h e EITC does.
We ought t o have two p r i n c i p l e s t h a t operate i n t h i s
c o u n t r y : People .who can work s h o u l d work; iBiS^i^M'e'y^Jdosswo-Bkvspjt-hei-r..
families a ^ ^ ^ m m ^ f S S r ^ —
• " Today I a l s o want t o announce t h a t t h e IRS w i l l b e g i n an
a g g r e s s i v e o u t r e a c h campaign t o reach a l l Americans who a r e e n t i t l e d
t o t h e c r e d i t . T h i s w i l l make i t e a s i e r f o r them t o r e c e i v e b e n e f i t s
they have earned by w o r k i n g . I t w i l l a l s o h e l p us t o educate them
about t h e advantage o f g e t t i n g an advanced EITC, r a t h e r than h a v i n g
t o w a i t an e n t i r e year.
A l l these f o l k s f i g u r e d out how t o work t h e system. But
t h e r e a r e a l o t o f people o u t t h e r e , j u s t l i k e them, who haven't and
who deserve t h e same i n c e n t i v e f o r work and f o r f a m i l y .
We know t h a t t h i s program works. We know i t ' s a
l i f e l i n e f o r s e m i - s k i l l e d workers who are working t o improve t h e i r
e d u c a t i o n and t r a i n i n g . We want Robin t o g e t home i n time f o r t h e
t e s t , and we want her t o make a good grade. And we want t h a t , a l s o ,
t o be a symbol f o r a l l t h e people i n t h i s c o u n t r y who a r e s t r u g g l i n g
t o do t h e same t h i n g .
We know t h a t t h e vast m a j o r i t y o f a l l those who b e n e f i t
from t h e EITC work v e r y l o n g hours f o r a v e r y modest compensation i n
j o b s t h a t v e r y o f t e n have inadequate b e n e f i t s , e i t h e r f o r themselves
or f o r t h e i r c h i l d r e n .
These a r e j u s t t h r e e o f t h e m i l l i o n s o f
s t o r i e s we might have heard today from a p a r t o f America we almost
never see on t h e evening news.
Every t i m e you see a crime s t o r y r e p o r t e d i n a tough
neighborhood, remember t h a t most people i n t h a t neighborhood, no
m a t t e r how tough i t i s , work f o r a l i v i n g , do t h e i r best t o r a i s e
c h i l d r e n , never break t h e law and are s t r u g g l i n g — s t r u g g l i n g
a g a i n s t odds t h a t a r e enormous t o make i t and t o make t h e American
Dream r e a l f o r themselves and t h e i r c h i l d r e n .
I t i s time we a c t e d t o support those people. I n some
ways, t h e y may be t h e most h e r o i c o f a l l Americans today. I f we
r e a l l y want t o r e b u i l d f a m i l y l i f e i n America, i f we want t o
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r e c o g n i z e t h e r e a l i t i e s t h a t n e a r l y everybody has t o work t o make
ends meet, and more and more f a m i l i e s have t o have b o t h p a r e n t s
working i f t h e y ' r e i n t h e home, even i f they have f o u r c h i l d r e n and
two o f them a r e as young as those two youngest boys, we have g o t t o
say t o those people: We are on your s i d e . Your c o u n t r y i s f o r you.
You have done what a l l o f t h e speech-makers t a l k about, and i t ' s t i m e
the people who make t h e speeches had p o l i c i e s t h a t reward you f o r
doing what people have been p l e a d i n g f o r Americans t o do f o r years
and years now.
That's why I t h i n k t h i s i s a c r i t i c a l p a r t o f t h i s
economic package. Make no mistake about i t : I f t h e people who f a v o r
the "no-new-anything approach," as The Wall S t r e e t J o u r n a l
c h a r a c t e r i z e d t h e opponents o f our p l a n , p r e v a i l , Americans w i l l l o s e
the pro-work, p r o - f a m i l y , p r o - r e s p o n s i b i l i t y element o f t h e earned
income t a x c r e d i t s , t h e l a r g e s t s i n g l e expansion i n an e f f o r t t o h e l p
the w o r k i n g poor i n over two decades.
We can't l e t t h i s happen. This i s j u s t one more reason
why we have g o t t o a c t , and a c t now on t h i s economic p l a n . This i s
not about numbers and d i g i t s and accountants' gimmicks; i t ' s n o t
about arguments about who p e r c e i v e s o r f e e l s what about t h i s economic
p l a n . T h i s i s about how t h e low i n t e r e s t r a t e s , d e f i c i t r e d u c t i o n ,
the business i n c e n t i v e s and, most i m p o r t a n t today, t h e earned income
tax c r e d i t w i l l a f f e c t t h e r e a l l i v e s o f r e a l people and h e l p them t o
l i v e and succeed i n t h e way t h a t we always speak as i f ^ w e want^them
t o be a b l e t o l i v e and succeed. wT-M-asriset'h'e!-^
•today..... . I hope t h e Congress w i l l ^ m ^ j f e ^ i * t * p o s s i b l e i n t h e next few
•days to'have more f a m i l i e s l i k e t h i s w i t h more success s t o r i e s .
Thank you v e r y much. (Applause.)
!
We can take a couple o f q u e s t i o n s .
Q
Mr. P r e s i d e n t , what do you t h i n k i s t h e chance o f
your budget g e t t i n g through?
THE PRESIDENT:
Q
Good.
We understand i t ' s i n deep t r o u b l e i n t h e Senate.
THE PRESIDENT: I t h i n k i t ' s good. You have t o l i s t e n
not o n l y t o what's being s a i d , b u t how i t ' s being s a i d . I t h i n k t h a t
-- you know, as more i n f o r m a t i o n gets o u t , i t ' s j u s t l i k e I ' v e always
s a i d -- r h e t o r i c was our enemy and r e a l i t y i s our f r i e n d .
There's
a s t o r y i n t h e W a l l S t r e e t J o u r n a l today t h a t once again Americans
are h e a r i n g t h e f a c t s i n s t e a d o f t h e r h e t o r i c and t h e bad-mouthing
and t h e n e g a t i v i s m o f our opponents and people are s a y i n g , l e t ' s g i v e
the P r e s i d e n t ' s p l a n a chance, and more l i k e l y t o support members o f
Congress who s u p p o r t i t than they are members who oppose i t . They're
b e g i n n i n g t o l e a r n again t h a t over 70 p e r c e n t o f t h e taxes now f a l l
on f a m i l i e s w i t h incomes above $200,000, t h e t o p 1.2 p e r c e n t o f t h e
p o p u l a t i o n ; and t h a t t h i s a t t a c k t h a t t h e Republicans have used t o
t r y t o convince o r d i n a r y Americans t h a t t h e y ' r e being soaked, t h a t
t h e r e ' s no d e f i c i t r e d u c t i o n , i s a l l a bunch o f hooey. And I t h i n k
we've g o t t o g e t t h i s o u t . So I'm f e e l i n g much b e t t e r about i t .
Q
Mr. P r e s i d e n t , t h a t same survey shows t h a t d e s p i t e
a l l t h e t i m e you've spent on t h e economy, more people g i v e you h i g h
marks f o r f o r e i g n p o l i c y than f o r h a n d l i n g t h e economy. Why do you
t h i n k t h a t ' s t h e case?
THE PRESIDENT: Because t h e y ' r e s t i l l w o r r i e d about
t h e i r economic c i r c u m s t a n c e s . And because they want r e s u l t s . And
because t h e Congress hasn't passed t h e p l a n y e t . We need t o b e g i n t o
do t h i n g s . But i f we pass t h e economic p l a n , i f we move on t h e
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h e a l t h care t o w e l f a r e r e f o r m , deal w i t h t h e crime b i l l , d e a l w i t h
the -- i f t h e Senate w i l l n o t f i l i b u s t e r t h e n a t i o n a l s e r v i c e b i l l
and open t h e doors o f c o l l e g e e d u c a t i o n t o a l l Americans, and g i v e
people a chance t o -- (applause) -- serve t h e i r c o u n t r y , then people
w i l l b e l i e v e t h a t Washington w i l l do b e t t e r . A l s o , t h e r a t i n g s o f
the Congress w i l l go up.
People want t h i n g s -- ( l a u g h t e r ) — people want t h i n g s
done. This i s n o t — they d i d n ' t h i r e us t o come up here and g i v e
speeches. We've t r i e d the s p e e c h i f y i n g f o r a good l o n g w h i l e ; i t
d i d n ' t work v e r y w e l l . They want t h i n g s t o be done. I t h i n k t h e
American people are v e r y p a t i e n t i n terms o f knowing we've been
g e t t i n g i n t o economic t r o u b l e f o r 20 years and we f o l l o w e d a c e r t a i n
economic p o l i c y t h a t I want t o change f o r 12, and i t ' s n o t going t o
t u r n around i n s i x months o r a year, t h a t we've got a l o t o f e f f o r t
t o make. But they want t o know t h a t we're a t l e a s t moving, t h a t
we're moving from t a l k t o a c t i o n .
And t h a t ' s why I wanted these f a m i l i e s t o come here
today, t o p o i n t o u t t h a t t h i s r e a l l y w i l l a f f e c t people's l i v e s .
There was another a r t i c l e I saw i n one o f t h e papers t h i s morning
i n t e r v i e w i n g v e r y s m a l l businesspeople who had been t o l d on t h e t a l k
shows and from o t h e r sources t h a t they were about t o g e t wanged by
t h i s p l a n , and a l l o f a sudden now they've r e a l i z e d t h e y ' r e going t o
get t h e i r expensing p r o v i s i o n doubled and over 90 percent o f t h e
s m a l l businesses i n t h i s c o u n t r y w i l l have an o p p o r t u n i t y t o lower
t h e i r t a x burden i f , b u t o n l y i f , they i n v e s t . So I t h i n k t h a t
r e a l i t y i s c r e e p i n g back i n , and t h a t ' s a h e a l t h y t h i n g always.
Q
Mr. P r e s i d e n t , t h e Pentagon says t h a t U.S. n a v a l
a i r c r a f t have a g a i n bombed I r a q i m i s s i l e s i t e s . Could you update us
and t e l l us what e x a c t l y i s going on?
THE PRESIDENT: There i s n o t h i n g o u t o f t h e o r d i n a r y
about what happened. I t was n o t p a r t o f any new i n i t i a t i v e .
I t was
p a r t o f t h e o l d understandings under which our planes operate i n t h a t
area and circumstances under which they respond.
Q
Mr. P r e s i d e n t , another c o n t r o v e r s i a l aspect o f your
p l a n deals w i t h e n t i t l e m e n t s . A few days ago, Congressman Tim Penny
s a i d t h a t you're c o n s i d e r i n g i s s u i n g an e x e c u t i v e o r d e r t o curb
e n t i t l e m e n t s . My u n d e r s t a n d i n g i s i t would be modeled a f t e r t h e
Stenholm e n t i t l e m e n t budget p r o v i s i o n i n t h e House. Can you comment.
THE PRESIDENT: The Stenholm p r o v i s i o n b a s i c a l l y imposes
d i s c i p l i n e on our budget. I t says t h a t i f we miss t h e d e f i c i t
r e d u c t i o n t a r g e t i n any g i v e n year i n any g i v e n c a t e g o r y , whatever
the c a t e g o r y i s , whether i t ' s g e n e r a l e x p e n d i t u r e s , revenues o r
e n t i t l e m e n t s , t h a t t h e P r e s i d e n t w i l l have t o come back i n w i t h a
p l a n t o meet t h e d e f i c i t r e d u c t i o n t a r g e t , and t h e Congress must v o t e
on i t . They don't have t o vote s p e c i f i c a l l y f o r t h a t , b u t they must
v o t e f o r something.
They have t o vote on i t .
I n t h e r a t h e r arcane r u l e s o f t h e Senate, t h e r e i s some
q u e s t i o n about whether t h a t p r o v i s i o n can go on t h i s budget b i l l
w i t h o u t t r i g g e r i n g a f i l i b u s t e r and, t h e r e f o r e , r e q u i r i n g 60 p e r c e n t
t o approve t h a t p r o v i s i o n .
Now, I b e l i e v e every Republican senator i s f o r t h e
Stenholm amendment, i n h i s o r her h e a r t . I b e l i e v e t h a t , because i t
i s what t h e y always say they want: spending d i s c i p l i n e . And y e t
they a r e t h r e a t e n i n g t o f i l i b u s t e r i t . Why? Because i t makes our
b i l l s t r o n g e r , because i t ' s a r e a l d e f i c i t r e d u c t i o n , because i t
undermines t h e a b i l i t y t o g i v e speeches i n s t e a d o f doing something.
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And so i t they don't l e t t h e Stenholm p r o v i s i o n go on
the budget, then I w i l l do my best t o , by e x e c u t i v e o r d e r o r t h r o u g h
a separate b i l l o r t h r o u g h some o t h e r measure, t o g e t as much o f t h a t
d i s c i p l i n e as I can.
I t h i n k we should every year -- nobody, nobody
r u n n i n g a business can f o r e s e e what's going t o happen f o r f i v e years.
The networks r e p r e s e n t e d here can't do a f i v e - y e a r
budget and e s t i m a t e w i t h a b s o l u t e e x a c t i t u d e what t h e i r revenues a r e
going t o be and who w i l l watch what and a l l t h a t s o r t o f s t u f f . And
you ought t o make c o r r e c t i o n s every year, and t h i s i s t h e f i r s t t i m e
the government's every committed i t s e l f t o t h a t .
I like i t .
Q
Mr. P r e s i d e n t , are you c o n s i d e r i n g t h e use o f war
planes over Bosnia? Not j u s t t o p r o t e c t U.N. peacekeeping f o r c e s ,
but a l s o t o keep t h e supply l i n e s going and perhaps t o s t o p some o f
the s h e l l i n g i n Sarajevo?
THE PRESIDENT: The best way f o r me t o answer t h a t today
i s t o say t h a t n o t h i n g has changed s i n c e I was asked t h a t q u e s t i o n
and o t h e r s y e s t e r d a y . We're s t i l l w a i t i n g t o hear from t h e U.N..
When we do, when we make a d e c i s i o n , then I w i l l respond.
(Applause.)
END12:17 P.M. EDT
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Lowell Weiss
PRESIDENT WILLIAM J. CLINTON
REMARKS ON INCOME AND POVERTY REPORT
THE WHITE HOUSE
September 24,1998
Acknowledgments: introducer Monique Miskimon [MISS-kim-min]; Erskine Bowles. Sec.
Rubin. Sec. Herman. Gene Sperling. Jack Lew. Janet Yellen. Larry Summers, whose tireless ~ and
often sleepless ~ work has been instrumental in sparking and maintaining what will soon be the
longest peacetime boom in American history; officials of Census Bureau who are here today.
Sometimes we take your hard work and reliable statistics for granted. But the fact is, your work
ensures that America's democracy is a truly representative democracy. And that is why I want to
say once again: Congress must not hamstring the Census Bureau's efforts to use the most up-todate, accurate, scientific methods to produce the Year 2000 Census.
Before I get into the details ofthe very positive economic report we received this moming, I
want to say a word about Hurricane Georges [zhorzhe]. In the Caribbean Islands, businesses and
homes have been swept away, and, tragically, many lives have been lost. Meanwhile, the projected
track of the storm places the hurricane's center over or near the Florida Keys late tonight or early
tomorrow moming. As we speak, we are helping the people of Florida prepare for the hurricane.
James Lee Witt, the Director of the Federal Emergency Management Agency, has informed me that
FEMA's Region IV Emergency Response Team arrived in Tallahassee at 10:00 this moming. Here
in Washington, the FEMA Emergency Support Team is operating at Level I — its highest level ~ on
a 24-hour basis. Our experienced support teams, and our prayers, are with those in the Caribbean as
they begin to rebuild, and with those in the Florida Keys as they brace for the impact of this storm.
As President, I have worked hard to help America rally around an urgent mission for the
21st century: reclaiming the future for our children and restoring the American Dream. To
accomplish that mission, we put in place a bold strategy to shrink the deficit, invest in our people,
and expand exports of products proudly stamped "Made in the USA." The Census report released
this morning represents one more year's worth of compelling evidence that this economic strategy is
working for families like Monique's ~ and, indeed, for families from every walk of life.
The report shows that last year the income of the typical American household grew at nearly
twice the rate of inflation. Since we launched our economic plan in 1993, the typical family's real
income has risen by more than $3,500 ~ that's an extra $3,500 that hard-working families can put
toward their children's education or a down payment on a first home. Income for typical AfricanAmerican and Hispanic families increased by more than $1,000 last year alone.
This report also shows that our growing economy is giving families the chance to work their
way out of poverty. The overall poverty rate fell to 13.3 percent. And while we still have room for
improvement, the African-American poverty rate fell to another record low, Hispanic poverty saw
the largest one-year drop in two decades, and child poverty has dropped more in the past four years
than in any four-year-period in nearly 30 years. And the Earned Income Tax Credit, which
Monique spoke of a moment ago, raised more than four million people out of poverty last year.
-1 -
�The report this morning shows that economic growth continues to raise incomes, lift
millions out of poverty, and extend opportunity — and it shows that we must do more. Since
1993 every income group has benefited from the nation's economic growth, but income inequality
is still too high. We must use our prosperity, and the confidence it inspires, to help our hardestpressed families and to ensure continued economic growth for all Americans.
The most important thing we must do is to maintain our solid economic strategy - above
all, the strict fiscal discipline that has given us the strongest economy in a generation. Exactly a
week from today, we will have the first balanced budget and the first budget surplus since Neil
Armstrong walked on the Moon. Unfortunately, this week the Republicans in the House of
Representatives are moving forward with a proposal that drains this new surplus to pay for their tax
plan. We can cut taxes, and my balanced budget includes targeted tax cuts. But they must be paid
for in full if we are going to expand opportunity in the years to come. My bottom line is clear: We
should set aside every penny of any surplus until we save Social Security first.
Second, we must continue to invest in our people. I was disappointed earlier this week when
the Senate rejected an increase in the minimum wage that would have gone a long way toward
ensuring that parents who work hard and play by the rules do not have to raise their children in
poverty. Working Americans deserve a raise. I have also been disappointed that with only a week
left in the fiscal year, Congress has taken little action on our vital education investments. Congress
must work with us to reduce class sizes, hire 100,000 well-trained teachers, modernize and build
thousands of schools, give our students access to powerful education technologies, create new
charter schools, improve early literacy, and lift our children's sights with voluntary national
standards. If we hope to maintain economic growth in the next century, we must give our children a
world-class education.
Third, we must continue to lead in the global economy. While we are enjoying a moment of
unsurpassed economic strength at home, economic turmoil is crippling important trading partners
abroad. Unless we are prepared to honor our obligation to lead, we will not remain an "oasis of
prosperity" for long. That is why it is imperative that Congress fully fund our dues to the
International Monetary Fund. At a time when our economic growth demands continued American
economic leadership, refusing to live up to our IMF obligations will send a terrible signal to the
world, and put our prosperity at risk.
Times of plenty are not times to rest. They are the time for the hardest, most productive,
most determined work of all. Let's use this time of rising incomes and soaring confidence to put
progress ahead of partisanship, people ahead of politics. Let's think about how our willingness to
do so affects families like Monique's, now just starting to make ends meet. How our deeds can give
peace of mind to families like those I recently met in Kentucky ~ families forced to fight a callous
HMO just as they were summoning all their strength to fight a sickness or disease. How our actions
can help students start to read at grade level for the first time, like the young students I recently met
at the Oscar Meyer School in Chicago. In the remaining days of this legislative session, let's keep
in mind all that's at stake for our children and families. Let's do everything in our power to give all
our families a chance to earn the pride and peace of mind you heard Monique talk about today.
Thank you and God bless you.
###
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��Draft 11/3/98 10:35am
PRESIDENT WILLIAM J. CLINTON
TALKING POINTS FOR POOL SPRAY BEFORE ECONOMIC MEETING
THE WHITE HOUSE
November 3,1998
I'd like to start out by saying a few words about the tragedy that has been unfolding
over the past few days in Central America. Hurricane Mitch has already claimed thousands of
lives in Honduras, Nicaragua, El Salvador, and Guatemala. Many thousands more are in urgent
need of food and shelter. Across the region, communities have been devastated, bridges washed
out, agriculture disrupted, schools and hospitals destroyed. These nations are close to our hearts
and close to our shores, and we will do whatever we can to help.
Already, we have provided over $3.4 million to airlift food, plastic sheeting, water
containers, and blankets into the region. We have provided military aircraft and helicopters to
get supplies to isolated areas and deployed a Disaster Assistance Response Team to each affected
country. And we will be consulting with our friends in Central America and our people on the
ground to see what more we can do in the days ahead.
In a few moments, I will meet with my economic team to discuss a range of global
economic issues. Over the long run, if America's economy is to continue to grow, the
economies of our trading partners must continue to grow. Yet a full quarter of the world's
population now lives in countries with declining or negative economic growth. This presents to
us the biggest financial challenge in a half century.
Over the last year we have pursued a comprehensive strategy to fight the financial
crisis and protect American jobs at home as well. Just last week, in an unprecedented step,
leaders of the world's major economies agreed to create a precautionary line of credit to help
countries with sound economic policies ward off the global financial crisis before it reaches their
shores. Japan recently committed substantial resources to repair its banking system. The U.S.,
Japan, Canada, and several European nations have cut interest rates to spur global growth.
America has met its obligations to the International Monetary Fund.
Next week, I will travel to Asia, where we will continue to work with our Asian
partners to spur growth, expand trade, and strengthen the social safety net.
In the face of worldwide economic turmoil, the American economy remains the
strongest in a generation. But to keep it going we must stay with the strategy that created the
conditions of this enduring economic expansion, and we must address the challenges of the
global economy.
###
�THE WHITE HOUSE
Office ofthe Press Secretary
For Immediate Release
November 10, 1998
REMARKS BY THE PRESIDENT
TO PRESIDENT'S EXPORT COUNCIL
The Ronald Reagan Building and International Trade Center
Washington, D.C.
1:35 P.M. EDT
THE PRESIDENT: Thank you. Well, Lionel, you did a great job. The first thing I
asked him today was whether or not his speech was going to be beamed into his school.
(Laughter.) I love Brooklyn; I've been to Senator-elect Schumer's home. I've spent a lot of time
in Brooklyn. Neither Chuck Schumer, nor I would have the courage to leave our electorate on
Election Day. (Laughter.) And you did. And for that reason alone I hope that you are rewarded.
I'm glad you're with us.
I want to welcome the other student leaders and teachers, business people here today and
those joining us by satellite and the Internet. I'd like to thank Mike Armstrong for his great
leadership of the President's Export Council and all the other members of the Council who are
here with us on the stage today for their service.
I want to thank Secretary Daley for doing a superb job as Commerce Secretary, not only
in his responsibility to promote America's exports and generally a free trading system throughout
the world, but for the many other good things he does for the American economy as the Secretary
of Commerce.
I'm very glad to address this first ever national town hall meeting on trade. When the
President's Export Council was created 25 years ago to promote America's businesses and jobs —
just think of it, people are joining us today via satellite and the Internet ~ 25 years ago,
communications satellites were largely tools of our military. Even six years ago, when I took
office, the Internet was basically the private province of physicists - there were about 50 sites.
Today, it's the fastest growing organ of communication in all of human history. Today, the
Internet and communication satellites are not instruments of war, but ploughshares to help us to
cultivate education and understanding, exports and the growth of our global economy.
�I think I'd like to say that it's also fitting that this town hall be held in a building named in
honor of President Reagan, because he believes deeply in our indispensable role in promoting
freedom and free trade throughout the world. In 1982 he said this: "Great nations have
responsibilities to lead. If we lower our profile we might just wind up lowering our flag." Well,
we still have a responsibility to lead ~ in the aftermath of the Cold War, I would argue a greater
responsibility than ever before.
That is why, six years ago, we charted a new course for our country, designed to preserve
both the American Dream and the American community at home and America's leadership for
peace and freedom and prosperity around the world. We had a three-word motto: opportunity,
responsibility and community. That meant, among other things, that we took a new direction
with our economy ~ a new strategy that began first with fiscal discipline, because our deficit was
$290 billion that year, slated to go to nearly $400 billion last year. No country can buy
prosperity by spending itself into debt deeper and deeper every year.
In the years since, we have seen that the hard work of reducing the deficit and producing
the first balanced budget in a generation has paid rich dividends: lower interest rates, higher
investment, more growth, rising wages, a 28-year low in unemployment with a 32-year low in
inflation. We have more to do. We must keep America fiscally sound. We must deal with the
Social Security challenge that we face. We must expand the reach of enterprise into those
neighborhoods and places in America that have not yet felt this economic recovery. But it is
working.
The second thing we did in building this historic surplus was to make equally historic
investments in our people: in education, in health care, in economic empowerment. In the new
global economy, education and technology, research and development, health care and a clean
environment - all these things will be increasingly valued, and without them it will be very
difficult to prove that the global economy works for ordinary citizens.
We have more to do, especially in education. And we have more potential in research, in
medicine, and in economic and technological areas. But we are doing the right things.
The third thing that we did with our economy, after balancing the budget and increasing
investment, was to try to make the global economy work more aggressively for our people.
During the past five years, exports have helped to create more than two million jobs - highskilled jobs that on average pay more than 15 percent above the average.
The free'^d pp^
has been vital
to our prosperjty. tl^ough'out^
be far more important to
our continued -grpv^vm'ithe^l^icentujyr That is why I have been so c ' d l ^ i t t b d ^ o ^ i i i i i g v ^
markets to our goods and services throughout the world.
During the past five years, we have completed 260 trade agreements to open global
markets to areas from automobiles to telecommunications.
�Now, as we meet here today, this global trading system is facing two great related challenges:
first,;theimost serious financial challenge since Wor^^^^|g^d:,secorid, the continuing need to
put a human face.on-theiglobaliecondWy^^that^sj'ti^^e'sure that in every country increased
trade ahlilmv^sfefent works to benefit ordinary citizens.
A full quarter of the world is now living in countries with declining or negative economic
growth. Millions who were in the middle class in Asia or Russia, for example, have been
devastated by economic problems in their own countries. Therefore, we see people for the first
time in a good while beginning to question the premises of the free flow of goods and services
and capital.
With the whole world increasingly linked together in a global marketplace, with global
communications, clearly these shocks abroad also reverberate at home. We saw it most clearly in
the last several months in the markets that our farmers no longer had in Asia, leading to steep
drops in farm prices here at home. We see it most clearly today, perhaps, in the fact that
America's economy has remained strong, and with other countries suffering from no growth or
negative growth, the flooding of our markets by certain products, especially steel, which has
become a big source of concern and about which I'll say more in a couple of minutes.
The point I want to make to all of you, especially to the students who are here, is that
resolving the global crisis today is vitally important for the American people — from Brooklyn to
North Dakota, in small towns and big cities. Why? Not only because it is in our interest to help
our friends around the world to continue to enjoy the benefits of freedom and prosperity, but
because if we want to keep our own economy and social fabric strong, we have to do so in the
context of a growing economy where people embrace the ideas of freedom and free exchange of
goods and services. That is why America must continue to lead in building a strong financial
and trading system for the 21st century.
Over the past year we have pursued a very aggressive strategy to combat the financial
crisis and to protect our jobs here at home. In September I called for urgent action to spur
growth and to aid those nations most in need. The nations of the world have rallied to this
agenda. Japan has committed substantial resources to repair its troubled banking system. Brazil
is moving forward to address its fiscal problems. The international community is working to
support these efforts.
America, Japan, and others have cut interest rates. Our Congress agreed to fully fund our
commitment to the International Monetary Fund. Through our Export-Import Bank and our
Overseas Private Investment Council, we're providing credit and investment insurance to
encourage the flow of capital to developing nations. The World Bank has announced that it will
expand its spending to strengthen the social safety net in Asia, where so many people have been
hurt by financial and economic collapse.
�Just 10 days ago, the Group of Seven major industrial nations announced additional steps:
a new line of credit to help nations with sound economic policies fight off the financial contagion
in the first place ~ it is always less expensive to keep something bad from happening than it is to
fix it once it happens - and second, a new World Bank Emergency Fund to aid those who are
suffering the most.
Now, these are very, very positive steps. But there is still much more to do to keep
countries on the path to prosperity to stop future crises before they start. I have called on the
world community to act to adapt the architecture of the international financial system for the new
realities of the 21st century — the 24-hour a day high-tech markets; with $1.5 trillion a day in
currency exchanges. Let me say that again.
We set up a system for all the students here that would enable more and more trade to
occur in goods and in services and more and more investment to occur. Now, obviously, if
you're going to have more trade and more investment in other countries, and their money is
different from yours, there has to be a system to ensure a fairly free flow of capital around the
world because those things have to be purchased or invested in in other countries. But today, the
financial markets, more than any other time, are operating as an independent economic force ~
and let me say again ~ $1.5 trillion a day is changing hands in international currency exchanges.
That is many, many times the total value of goods and services traded in any given day.
And that is at the bottom of a lot of the challenges we're facing today. How do we
continue to support the necessary free flow of capital so that we can have the trade, the
investment we need, and avoid the enormous impact that afinancialcollapse can have when the
money being traded on its own is so much greater than the total value of goods and services
being traded or investments being made.
Later this week, leaders of the Asia Pacific community of nations will gather in Asia to
continue our efforts toward a more prosperous and secure future. We'll work on speeding the
economic recovery in Asia, strengthening the social safety net, helping companies there to
restructure their debt so they can emerge from the crushing burdens they face and once again
employ^people and pay them wages.
Now, in solving the current crisis in Asia, Japan is of particular importance. It is, after
' all, the second largest economy in the world. It has been a key engine of growth for the entire
world over the last two decades. The restoration of growth in Japan, which has been stalled now
for more thanfiveyears, is absolutely essential to the restoration of growth in the remainder of
Asia. The rest of us look to Japan to move quickly to implement the good banking reforms
which have been passed, to spur demand for goods and services in the home market, to reduce
unnecessary regulation and to open its markets.
r
At the Asia Pacific leaders summit, our nations will work together to bring down more
barriers to trade. Last year we agreed to consider opening nine key sectors, worth more than $1.5
trillion a year in world trade. We need to deliver on that agreement.
�We must also, here in the United States, move ahead on trade initiatives with Latin
America, with Africa, with Europe. We must launch negotiations on agriculture and other areas
within the World Trade Organization as we move toward next year's ministers meeting here at
home in the United States. And here, on our domestic front, we need to find common ground on
fast track negotiating authority, so that I can continue to negotiate good trading agreements with
other nations.
Now, as we deal with all these issues, we must remember that it's also important to keep
in mind that there must be a human face on the global economy - we must be able to show that
economic exchange benefits ordinary citizens. Therefore, we will continue to work for trade
agreements that include important protections for workers, for health and safety, for the
environment; and to work for a world trading system that is more open to all elements of society
and more designed to lift the fortunes of all people in all trading countries. Expanded trade must
not provoke the so-called "race to the bottom."
We'll also work hard with our Congress to make our own sanctions policy more
judicious, more fair, more cost-effective - something our business community has talked to us
about quite a lot.
America must also continue to lead the world to have an open rules-based trading system.
If we expect the American people to support expanded trade, free trade must also be fair trade.
I'm especially concerned, as I said earlier, about the impact of the international financial crisis on
American steel workers and our steel industry. We are committed to a full and timely
enforcement of our trade laws to address unfair trade practices affecting this industry, and we
will insist that our key trading partners play by the rules.
I am pleased that Secretary Daley earlier today released regulations to implement our
laws against unfairly subsidized imports. This expedited action will greatly help our steel and
other industries as they review the legal remedies available to them.
Our companies deserve fair treatment overseas as well. Earlier today I signed legislation
approving an agreement with other industrial nations to crack down on bribery in international
business transactions. This agreement requires the nations that sign it to enact laws barring their
citizens from bribing foreign officials to win business in those countries.
We've had laws like that on the books for more than 20 years. I'm sorry to say, as many
of the people up here on this platform can testify, it's cost us a lot of business over the last 20
years to do the right thing. But it is clearly the right thing. American companies deserve a level
playing field, and now, with this legislation and this international agreement, we will have it.
Let me say one other thing. We believe the global economic system is strengthened by
openness, so that people can judge whether governments, businesses, and international
institutions like the WTO and the IMF act responsibly and honestly. And we will continue to
push for greater openness.
�Finally, as I have told audiences this year from Santiago to Shanghai, no matter what we
do in the United States to try to restore growth, no matter how good our world trading and
financial systems are, there are some things nations must do for themselves. Unless nations
deepen their democracies, unless they provide good education, health care to the maximum
ability according to their means, unless they have a fair legal system, unless the citizens of each
nation feel they have an actual stake in their own economies and they've got a good chance to get
a fair shake if they work hard and play by the rules, unless these things are present, then nations
will resist - people will resist the reforms that a lot of these nations have to undertake now to
recover and to grow over the long run. Unless people are empowered with the tools to master
economic change, they will feel they are its victims, not its victors.
So I say again, we have heavy responsibilities here in the United States. We must
continue with our efforts to generate greater economic growth, to seek freer and fair trade, to see
that trade and the global financial systems are modified to meet the needs of the 21st century, to
roll back the present financial crisis, and to design efforts that will lift the lives of all people over
the long run. We have to do this, but other countries must do their part as well.
All of you young people who are out here, if you look at where we are in the United
States, with a population that is more diverse racially, ethnically, culturally than ever before in
our history, we are well-positioned to do better in the 21st century than at any time in our
glorious past. If you look at the efforts being made to overcome old problems — from Northern
Ireland to the Middle East, to Bosnia and Kosovo, to tribal difficulties in Africa — and you look
at the continuing troubles that are still out there, it is clear that if a unifying, rather than a
dividing, vision of human life and human society is the dominant one the young people in this
country and this world bring to the world of the 21st century, we have the chance to have the
most peaceful, most prosperous, most healthy, most forward-looking period in all human
existence for people throughout the globe.
But it is by no means certain. And this is a critical period. Everything we do for
economics should be seen not as an economic matter alone, but should be done because it also
advances the texture and meaning and quality of life - the ability of families to raise their
children, the ability of people to get better education, the ability of people to live in peace, the
ability of people to look beyond their noses and the struggles of putting food on the table today
to the need to reconcile our growing economy with our fragile environment around the globe.
That's what this is about. That's why your presence here is so important. And that's what
I ask you to think of. Yes, America is blessed. Yes, we're doing well. Yes, we're making money
from the global economy. Yes, we can make more money and have more jobs and enjoy more
prosperity. But in the end, the purpose of all this is to improve the quality, the depth, the texture
of life — not only for ourselves, but for the cause of peace and freedom throughout the world.
I believe we can do it. I hope you will support that. And I hope very much that, once
again in the coming year, we will make great advances here in the United States to that end.
Thank you very much. (Applause.)
END
1:54 P.M. EST
�WHITE HOUSE STAFFING M t l M u h A S D I M
Date: l ^ j ^ j ^
ACTION / CONCURRENCE / COMMENT DUE BY: ^ > f f i ?
Subject:
^€>^H?Ar5"
£ T T C
ACTION
FYI
ACTION
VICE PRESIDENT
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NASH
PODESTA
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ECHAVESTE
FYI
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REED
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RUFF
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LEW
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SMITH
BEGALA
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SOSNIK
BERGER
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SPERLING
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BLUMENTHAL
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STEIN
FRAMPTON
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STERN
IBARRA
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STREETT
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TRAMONTANO
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VERVEER
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WALDMAN
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YELLEN
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KLAIN
LANE
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LEWIS
LINDSEY
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LOCKHART
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MARSHALL
MOORE
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REMARKS.
RESPONSE:
staffing.. WPD 11/13/98
Staff Secretary's Office
Ext. 62702
�Draft 12/3/98 5:45pm
Lowelll Weiss
PRESIDENT WILLIAM J. CLINTON
REMARKS ON JOBS AND THE EITC
THE WHITE HOUSE
December 4,1998
y
B
6
Acknowledge: Sec. Herman. Gene Sperling [whose tireless fight to expand the EITC came
directly from the heart]. Amy Hillen.
One of the main reasons I ran for President six years ago is because I deeply believed that
people like Amy and her family could achieve great success — if we could just unstack the deck. I
knew that when our nation was taxing working families into poverty, that was wrong. I knew that
when a mother was rising at dawn, putting in an honest day's work, and still she could not afford to
buy her children proper clothes for school, that was wrong. I knew that we had to create new
incentives to help people climb the economic ladder and reach a place of true independence —
instead of kicking out the ladder's lowest rungs.
And that is why, in 1993, we fought for, and won, a dramatic tax cut for working families
like Amy's by doubling the Earned Income Tax Credit. That is why, two years ago, we fought for,
and won, a major increase in the minimum wage ~ and why we are fighting to increase it again.
Today, we are releasing a new analysis prepared by the Council of Economic Advisors that
shows just how helpful these actions have been for millions of working families. It shows that the
EITC family tax cut has been a major factor in encouraging work among single mothers and has
been responsible for much of our strong progress in reducing child poverty. And it shows that the
combined effects of increases in the EITC and the minimum wage have been nothing short of
remarkable. Since 1993, families with two children and one parent working full time saw their
income rise by more than $2,700 after inflation just because of these two policies alone. These
policies, which we fought so hard to achieve, have lived up to their promise. They have
strengthened the bonds of community. They have helped restore America's compact of mutual
responsibility. They have helped America live up to its obligation to promote our core values of
family and work.
And on top of these gains from the EITC family tax cut and the increase in the minimum
wage, America's working families are also reaping the rewards of America's growing economy.
This month, our economy will achieve the longest peacetime expansion in American history ~ and
all economic groups in America are being lifted by this rising tide. In fact, for low-income men and
women, paychecks are up approximately 6% since 1996 alone.
And just this moming, the Labor Department reported that average workers continue to
enjoy the fastest real wage growth in 20 years. These strong wage gains have been accompanied by
a steep decline in unemployment both for workers with college degrees and those without. Overall,
our economy added TK new jobs in November. And the nation's unemployment rate TK ~ while
inflation has remained low and stable.
�Now we must press forward with our comprehensive strategy of fiscal discipline, investing
in our people, and expanding markets for America's goods. For while our economy continues to
grow and create new opportunity, we do know that the shocks abroad can reverberate in important
sectors of our own economy. Boeing has annoijndi^that they will lay workers off because Asian
airlines can't pay for the planes they've ordere(d^t^g^teel industry has been overwhelmed by
imports atfire-salepricesi.fami prices are at record lows in the high plail&C Clearly these are
symptoms of the globalfinancialcrisis and in particular the economic problems in Asia. And that's
why, for more than a year now, we have worked so hard to limit the spread ofthe financial
contagion, reverse conditions in Asia, and restore economic growth around the world.
Our efforts are yielding positive results. Countries around the world are cutting interest rates
to spur global growth. The U.S. Congress has fully funded our obligations to the International
Monetary Fund Together with Japan we have launched an initiative to help relieve crushing debt
burdens in Asia and revive the private sector there. In countries like South Korea and Thailand
there are signs thatthe worst ot the crisis has come and gofe. And our efforts will continue. We
simply must continue to lead the world in restoring growth and in building a strong finance and
trade system for the 21st century.
x
Yes, An erica is blessed. Yes, our economy is doing very well. But if we are to continue to
Id new jobs, rcise wages, cut poverty, and give families like Amy's the tools they need to live up
we must continue to help restore growth abroad and strengthen our economy at
3 k together — and we use America's momentum and confidence wisely ~ I know we
Thank you and God bless you.
^
"
^
^5
/Ji
�Draft 12/3/98 5:30pm
Lowelll Weiss
PRESIDENT WILLIAM J. CLINTON
REMARKS ON JOBS AND THE EITC
THE WHITE HOUSE
December 4,1998
Acknowledge: Sec. Herman. Gene Sperling [whose tireless fight to expand the EITC came
directly from the heart]. Amy Hillen.
One .of the main reasons I ran for President six years ago is because I deeply believed that
people like Amy and her family could achieve great success ~ if we could j ust unstack the deck. I
knew that when our nation was taxing working families into poverty, that was wrong. I knew that
when a mother was rising at dawn, putting in an honest day's work, and still she could not afford to
buy her children proper clothes for school, that was wrong. I knew that we had to create new
incentives to help people climb the economic ladder and reach a place of true independence ~
instead of kicking out the ladder's lowest rungs.
And that is why,, in 1993, we fqught for, ^nd won, a dramatic tax cut for wqrking families
like Amy's by doubling the Earned Income Tax Credit. That is why, two years ago, we fought for,
and won, a major increase in the minimum wage - and why we are figfiting to increase it again.
Totfay, we are releafsing-a new analysis prepared by the Council of Economic Advisors that
shows just how helpful these aptions have been for'millions of working families. It shows that the
EITC family tax cut has been a major factor in encouraging work among single mothers,and has
been responsible for'much of our strong progress vf\ reducirig child poverty. And it shows that the
combined effects of increases in the EITC and the minimum wage have been nothing short of
remarkable. Since 1993, families with two children and oriepmrent working fdll time saw their
income rise by more than $2,700 after inflation just because pf these two priorities>alone. These
fjnOTitiesi which we fought so hard to achieve, have liyed ijp to their prqmiseT^piey have
strengthened the bonds of community. They have helped restore America's compact of mutual
responsibility. They have helped America liye up to its obligation to prqmote our core values of
family'and work.
And on top of these gains from the EITC family tax^ut and the increase in the minimum
wage, America's working families are also reaping the rewards of America's growing economy.
This month, our economy wiH achieve the longest peacetime exp^ansioiyin American history ~ and
all economic groups in America are beingTifted by this rising tide. In fact, for low-income men and
Women, paychecks are up approximately 6% since 1996 ^lone.
i
And j i ^ t this morning, the Labor Department repofted that average workers continue to
enjoy,.the, fastest real wage'gro.wth iri 2,0 years. These strong wag'e gains have^een accompanied/by
a^ste^-declme in unemployment both for workers with college degrees an^l those wj.the«t^Oy£rall,
frn^ovemberTbur economy added TK more jobs. And the nation's unemploymer^ateJTIw-- v/hfie
inflatioTrha^remained lowand stableT
�Now we-muptpre^s forWard with otfrcomprehensive strategy ofTiscal discipline,investing
in ounpeopte, and expanding markets for America's goods. For while ouf^economy contirnies to"
grow ai>d create neW(6pporturiity, \ye do knoyv that the shocks abroad can reverberate in important
sectorsof our p^q\ economy. Boeing harannouiiced that they will layworkers off because Asian
^r'mrHries can^bu^he^lanes they've prdered; tjie steel industry has bifen overwhelmed^by import^at
fi/e-sale pri<5esriarm prices are at recqfcl loWs^h the high plains. Clearly these are symptoms of the
global finaticial crisis arid itt particular the eccmomic prpblems in Asia. And that's v/i^Hiave'given
sucha high^riori^ for more that) a year now to trying to limit the spreacf of thefinancialcontagion,
reverseconditions in Asia, and restore economic growth around the world.
(
J
''^C
Our efforts are yielding(^ositive)results. Countries around the world are ciitting interest rates
to spur global growth. T^e U.S. Congress has fully funded qur obligations to the International
Monejary Furicl. Together with Japan we^have launched an initiative to, help relieve crushing debt
burdens in Asia and revive the private sector there. In countries like South Korea and Thailand
there are-signs that the' worst of^ the crisis has come and gone. And qur efforts will continue. We
simply must continue to lead the world intestoring growth and in building a strongjinancjal and
trading system for the 21 st century.
(
Yes, America is blessed. Yes, qur economy is doing very well. But if we are to continue t6
add new jobs, raise wagps, cut poverty, and give families like Amy's the tools they need to liye up
to th^ir drearris, weinyst continue ^to help restpre growth abrpad arid strengthen our economy at
home. If We wofk together ~ and We us6 America's momentum and confidence wisely --1 know we
can do just that. Themk you and God bless you.
(
(
###
�Withdrawal/Redaction Marker
Clinton Library
DOCUMENT NO.
AND TYPE
001. fax
SUBJECT/TITLE
DATE
John Wancheck to John Arzack and Chuck Marr, re: Earned Income
Credit [partial] (1 page)
12/2/98
RESTRICTION
P6/b(6)
COLLECTION:
Clinton Presidential Records
Speechwriting
Weiss, Lowell
OA/Box Number:
17195
FOLDER TITLE:
EITC [Earned Income Tax Credit]
2006-0470-F
wr221
RESTRICTION CODES
Presidential Records Act - |44 U.S.C. 2204(a)|
Freedom of Information Act - |5 U.S.C. 552(b)|
PI National Security Classified Information 1(a)(1) of the PRAj
P2 Relating to the appointment to Federal office 1(a)(2) of the PRA|
P3 Release would violate a Federal statute 1(a)(3) of the PRA)
P4 Release would disclose trade secrets or confidential commercial or
financial information |(aX4) of the PRA|
PS Release would disclose confidential advice between the President
and his advisors, or between such advisors |aX5) ofthe PRAj
P6 Release would constitute a clearly unwarranted invasion of
personal privacy 1(a)(6) ofthe PRA]
b(l) National security classified information 1(b)(1) ofthe FOIA)
b(2) Release would disclose internal personnel rules and practices of
an agency |(bX2) ofthe FOIA]
b(3) Release would violate a Federal statute [(b)(3) ofthe FOIA)
b(4) Release would disclose trade secrets or confidential or financial
information |(bX4) ofthe FOIA|
b(6) Release would constitute a clearly unwarranted invasion of
personal privacy 1(b)(6) of the FOIA)
b(7) Release would disclose information compiled for law enforcement
purposes |(bX7) ofthe FOIA]
b(8) Release would disclose information concerning the regulation of
financial institutions 1(b)(8) ofthe FOIAj
b(9) Release would disclose geological or geophysical information
concerning wells 1(b)(9) of the FOIA]
C. Closed in accordance with restrictions contained in donor's deed
of gift.
PRM. Personal record misfile defined in accordance with 44 U.S.C.
2201(3).
RR. Document will be reviewed upon request.
�FAX TRANSMISSION
CENTER ON BUDGET AND POUCV PWORITIBS
620 Rrat StrMt. NE Suite 510
WMhlnoton, DC 20002
202-408-1080
Fax: 202-408-1058
war>chfick«center.cbpp.arg
To:
John Arzack, Chuck Marr
Date;
December 2,1998
Fax#:
456-2223
Pages:
2, including this cover sheet.
From:
John Wancheck
Subject:
Earned Income Credit
COMMENTS: Sony if I mangled your last name spellings...
The Maryland Committee for Children, which brought Monique Miskimmon down for
the news conference several weeks ago, has identified two people capable of speaking
at the event on Friday. The Committee and I will also be working to find others for
diversity. Following are quick summaries of both people who've each agreed to
participate if you want them. Both are late-twenties or thirty. You may call each of
them directly, I gave them John's name.
Hillen - CaKbe reached this evening after 8:30 and all day tomorrow at t l l l l l
works out oWier house); lives in Howard County, MD. Works as a job counselor
with people mtransition from welfare to work for a non-profit group called Grassroots,
which does this under contract with the state/county. She herself was on welfare,
divorced with two children for 5 years until the end of 1996 (continued to go to college).
She went to work for a month in 1996 and claimed a small EITC; in 1997 she earned
$17,000 and got an EITC of "about $3,000" [EITC was $2,583 for $17,000 in 1997]. She
used it to buy a car, pay insurance and pay child care expenses so that she could
continue to work and continue her education. In 1998, she's working less hours and
will eam $11,000 [EITC will be $3,7561; she's working toward a master's degree now aa
well. Promotes the EITC with people she counsels. Articulate, mature and enthusiastic
about EITC. She's white. Checking with some of her clients this evening on whether
they would also participate in the event. Has not participated previously in media
events on EITC.
2. Rhonda Clarke - H iWMffSflllW- 410-752-7588; lives in Baltimore, works as a
receptionist for MD Committee for Children. Has two children. Was on welfare as a
single parent until November of 1993, when she came to MD Committee. Has used her
EITC to pay child care expenses, without which she would have had a very difficult
ol
o
�time continuing to work. Now earning about $18,500 [EITC would be $2,437], In April
of 1995, she spoke about the EITC at an event with Sec. Rubin in Washington DC at the
Martin Luther King Library. She also spoke later that year with Monique Miskimmon
at a news conference called by Carol Mosely Braun in reaction to proposed EITC cuts.
Larry Summers also participated. She was featured in a W. Post story (Judy Havemann,
Barbara Vobejda) in Oct. 95 regarding impact of EITC cuts. No media coverage 96-98.
She is white.
�GOOD NEWS FOR LOW INCOME FAMILIES:
How EXPANSIONS IN THE EARNED INCOME TAX CREDIT AND THE MINIMUM WAGE
HAVE REINFORCED THE ECONOMIC GAINS OF LOW-WAGE WORKERS
1. The Labor Market Continues to Perform at a Record Pace
American workers are currently benefiting from the strongest labor market in a
generation. Employment is at an all-time high, with 13x million Americans at work in
November 1998 and x million jobs created since 1993. Only 4.x percent of the labor force is
unemployed, having fallen by x.x percent since 1993; the unemployment rate is now at its lowest
level since 1969. Moreover, wages of workers are up sharply in the past several years, with a
gain in median wages (after inflation) of 4.4 percent from 1996 through August of this year. As
this report indicates, these gains are particularly strong among low-wage and disadvantaged
workers, following more than a decade of labor market losses. Administration policies have
been important in helping those at the bottom end of the labor market begin to catch up and share
in the overall economic growth of the 1990s.
2. Low-Wage and Disadvantaged Workers are Making Particularly Large Gains
Low-wage and disadvantaged workers have experienced substantial gains in wages and
employment. The real wages of low-wage male workers have shown sharp increases in the past
few years, in contrast to the period from 1979 to 1993, when they declined from $6.51 to $5.55
per hour. (We define low-wage as those workers at the bottom decile of the wage distribution.)
Among low-wage women, the decline was 15.8 percent over this period. Charts 1 and 2 show
recent significant improvements in real wages among all workers, but with particularly large
gains among the least skilled. Since 1996, men in the bottom decile have increased their
earnings by 5.7 percent after inflation (Chart 1), while women have gained 6.1 percent (Chart 2).
�At the same time, unemployment rates among the least skilled have plummeted. When
this Administration took office in 1993, 11.1 percent of workers without a high school degree
were unemployed; today that rate has fallen to x.x percent. Among high school graduates (with
no college), the rate has fallen from 6.6 to x.x percent. Hence, low-wage workers are working
more and earning more for every hour that they work.
One group in particular — single mothers — has also experienced significant increases in
labor force participation during this time period. Labor force participation rates among single
mothers began to climb in 1993 after remaining essentially unchanged at 66 percent since 1979.
By 1997, x.x percent of single mothers were in the labor force. Combined with their recent
earnings increases, this means that employment and income are rising among a group that has
traditionally had extremely high poverty rates and high rates of welfare usage.
3. Administration Policies Have Played a Key Role in These Gains
The strong overall economy has been an important factor in increasing the wages and
employment of less-skilled workers. Typically, employment and unemployment among workers
with less education are more sensitive to changes in the economy, with larger gains in recoveries
and larger losses in downturns. This Administration has worked hard to maintain an
environment in which economic growth can flourish and American businesses can compete
fairly, both at home and abroad. However, the strong economy is not the only reason for these
gains among less skilled workers. Administration policies to "make work pay" by expanding the
Earned Income Tax Credit and raising the minimum wage have also been important.
3.1 Expanding the Earned Income Tax Credit
Description of the EITC
Chart 2: Hourly Wages of Women Aged 16 and Over
Chart 1: Hourly Wages of Men Aged 16 and Over
16
16
-14
£14
50th dedle (median)
o
12
•D
'10
-,2
10
50th dedle (median)
C
D
3
20th decile
o
o
1
I
6
10th decile
1979
1982
1985
1988
1991
Note: 1998 figure is the January through August average.
1994 1997
1979
1982
1985
1988
1991
1994 1997
Note: 1998 figure is the January through August average.
The goals of the Earned Income Tax Credit (EITC) are to reward work so that parents
�Chart 3: The Earned Income Tax Credit in 1993 and 1998
4o o |
,o
w h o are e m p l o y e d f u l l - t i m e d o n o t h a v e t o r a i s e
1 their children in poverty and families have a
greater incentive to move from welfare to work.
To achieve these goals, the EITC consists of a
refundable tax credit for working families with
low incomes. Because the credit is refundable,
individuals can receive the full amount to which
they are entitled even if the amount exceeds the
individual income taxes they owe.
Only families that work are eligible for the
50 0 1 , 0 1 , 0 20,000 25,000 30,000 tax credit, and the amount of the credit depends
, 0 00 0 50 0
9
on a family's labor market earnings. In 1998, for
Earnin
s
Note: Credit amount depicted is for a family with two or more children
i
11
i
•
i
every dollar a low-mcome worker earns up to an
established limit, as much as 40 cents is added to compensation in the form of a tax credit. In
particular, the amount of the credit rises with earnings up to a maximum of $2,271 for a family
with one child and $3,756 for a family with two or more children (expressed in 1998 dollars).
The credit is flat for a range of earnings and then is phased out.
The EITC expansions championed by the Administration has resulted in a much stronger
work incentive than it did in 1993, as Chart 3 indicates. The increase in the EITC in 1993 helped
lower taxes for 15 million working families. For every dollar earned by a low-income working
parent with one child, the EITC now adds another 34 cents to the family's income, up from 19
cents in 1993; for low-income working parents with two children, the increase was from 20 cents
to 40 cents. In addition, the maximum credit increased dramatically and eligibility was extended
to families with two or more children with incomes up to $30,095.
The EITC is a non-bureaucratic way to reward work effort. There are no middlemen
service providers, no long lines at government office, and there is no need to take time off from
work to apply for the credit. The tax refund is given directly to working families by the Internal
Revenue Service.
Participation in the EITC
While the EITC offers a substantial incentive to work and move out of poverty, the credit
is effective if low-income families apply for it. About 19.7 million workers are expected to
claim the EITC in tax year 1998, receiving an average credit of $1,547. This represents a
substantial increase over the past decade. A relatively high fraction of families eligible for the
EITC — 81-86 percent — claim the credit. This participation rate is substantially higher than it is
for other antipoverty programs, including AFDC (65-70 percent), and Food Stamps (56 percent).
The EITC has reduced poverty
�The EITC is targeted to families living in poverty with the goal of lifting their income
above the poverty line. As shown in Chart 4, the latest estimate from the Census Bureau shows
that the EITC removed 4.3 million persons from poverty in 1997, which is more than double the
number who were removed from poverty in 1993.
Analyses by the Department of Treasury [DON'T THESE NUMBERS COME FROM
CENSUS?] show that over half of these persons (2.2 million) were children under the age of 18,
and 1.8 million were unmarried mothers and their children. [SHOULD EXPLAIN THAT THE
FOLLOWING ANALYSIS WAS DONE IN LAST YEAR'S ERP AND THESE ARE
UPDATED FIGURES. I WOULD INCLUDE THE TABLE.] In addition, over half of the
decline in child poverty between 1993 and 1997 can be explained by changes in taxes, most
importantly the EITC. It is clear that the EITC has become a major weapon in our fight against
poverty.
SHOULD ADD IMPACT OF EITC ON REDUCING POVERTY AMONG
MINORITIES. WE'LL E-MAIL NUMBERS IN SEPARATE DOCUMENT.
The EITC has increased labor force participation of single mothers
Between 1993 and 1996, the real value of the maximum EITC payment increased by 38
percent for single mothers with one child and by 116 percent for single mothers with two or more
Chart 4: Number of People RemovedfromPoverty
by the EITC
1993
1994
1995
1996
1997
�1
children. These increases coincided with the period when the proportion of single mothers in the
labor force increased dramatically, as mentioned above. In clear contrast, the labor force
participation of single women without children -- who were eligible for only a small credit - did
not change over this period (Chart 5). As Chart 6 indicates, the difference in the employment
rates of single women with and without children has closely tracked the growth in maximum
EITC benefits. [SHOULD ADD SPECIFIC LABOR FORCE PARTICIPATION
NUMBERS AS IN EXECUTIVE SUMMARY ABOVE]
Chart 6: Maximum EITC and Difference in Labor Force
Participation Between Single Women W t h and Without Children
Chart 5: Labor Force Participation Rates of Single Women
With and Without Children
100
3,000
Single women
without children
T
-10
-12
Sf 2,500
ro
o
90
(U
/
S 2,000
E
-14 «
-16
C
s
a s
o
o
O 1,500
Maximum EITC
(left axis)
H
UJ
t
-18 |
§ 1,000
a
(U
Single women
with children
I 70
|
-20°-
Labor force participation
difference (right axis)
500
-22
60
-24
1984
1986
1988
1990
1992 1994
1996
1984
1986
1988
1990
1992 1994
1996
Note. After 1990, the maximum EITC is the average of the maximum for
taxpayers with one child and with more than one child.
One recent study concluded that as much as 60 percent ofthe increase in the employment
rates of single mothers since 1984 was attributable to expansions in the EITC. A second study
examined the 1986 EITC expansion, which was more modest than the 1993 expansion, and
found that it significantly increased labor force participation among single mothers, especially
for less educated women. [SHOULD HAVE NEW CITATION FROM PUBLISHED
SOURCE FROM NBER BOOK.] [ADD KARL SCHOLZ'S PAPER ON EXPECTED
INCREASE IN LFPR FROM 1993 EXPANSION, FOLLOW WITH ONE SENTENCE ON
2
3
'These changes are calculated assuming one earner in the family. The same numbers
would apply to a two-parent family with one and two children, and one earner as well.
2
Meyer, B., and D.T. Rosenbaum. (1998). "Welfare, the Earned Income Tax Credit, and
the Employment of Single Mothers." Department of Economics, Northwestern University.
3
Liebman, J.B. (1997). "The Impact of the Earned Income Tax Credit on Incentives and
Income Distribution." John F. Kennedy School of Government, Harvard University.
�EXPERIENCE.]
[CUT PARAGRAPH BECAUSE PAPER IS BASED ON FLIMSY STUDY. IT'S
NOT CLEAR THAT ONE CAN USE THE SAME METHOD THAT JEFF USED IN HIS
PAPER FOR MARRIED COUPLES. HIS METHOD IS ONLY APPLICABLE TO
SINGLE MOTHERS.] EITC benefits for married couples are based on the combined earnings
of both husband and wife. Hence, married couples are more likely than single parent families to
fall in the range of earnings where the EITC is being phased out. This has caused some
researchers to predict that the EITC might cause a decrease in hours of work among married
couples. However, the limited available evidence suggests that the expansions in 1986, 1990,
and 1993 had modest disincentive effects of 1.2 percentage points on labor force participation of
wives, and they actually had a small positive effect on married men (of 0.2 percentage points).
4
How is the extra income from the EITC being used?
Most families receive their EITC
dollars at tax payment time, in the form of a
larger refund. A recent study of families
7.00
receiving the EITC in the Chicago area found
that 61 percent planned to use at least some of
their refund for investment purposes, such as
to pay for education (9 percent), repair, buy,
or finance a car (10 percent), or to pay for a
move (5 percent). Twenty-eight percent said
they were saving at least some of the EITC for
future use.
Chart 7: The Real Value of the Minimum Vtoge
5
3.2 Increasing the Minimum Wage
4.00
1979 1982 1985 1988 1991 1994 1997
The Administration has fought for
increases in the minimum wage, and on October 1, 1996 the rate was raised from $4.25 to $4.75.
The rate was increased again to $5.15 on September 1, 1997. Prior to these increases, it had been
six years since the minimum wage was last raised, and its real value had decreased by 15 percent
(Chart 7).
As shown in Charts 1 and 2, the wages of low-wage workers increased substantially since
1996, and the recent minimum wage increases are likely to explain much of this rise. It has been
4
Eissa, N. and H.W. Hoynes (1998). "The Earned Income Tax Credit and the Labor
Supply of Married Couples." Department of Economics, University of California, Berkeley.
'Smeeding, T., K. Ross, M. O'Connor, and M. Simon. (1998). "The Economic Impact of
the EITC." Center for Policy Research, Maxwell School of Public Policy, Syracuse University.
�estimated that almost 10 million workers benefited from the recent minimum wage hikes/'
Most of the workers benefiting from the wage increases are adults from lower income
families, and their wages are a major source of their family's earnings. Among workers who
were earning between $4.25 and $5.15 just prior to the minimum wage increases, 71 percent
were adults (20 or older), 58 percent were women, and one-third were black or Hispanic workers.
Almost half of the affected workers (46 percent) worked full-time, and most of the low-wage
workers were in low-income households. That is, 58 percent of the benefits from the minimum
wage increases were received by households in the bottom 40 percent of the income distribution.
And in 1997, the earnings of the average minimum wage worker accounted for 54 percent of
their family's total earnings.
One of the potential side effects of increasing the minimum wage is a reduction in
employment. That is, with labor more expensive, some firms may hire fewer workers. Many
empirical studies have examined this issue, and the weight of the evidence suggests that modest
increases in the minimum wage have had very little or no effect on employment. In fact, a recent
study of the 1996-97 wage increases used several different methods and found that the
employment effects were statistically insignificant. [CITE UNEMPLOYMENT FOR
AFRICAN AMERICAN TEENAGERS AND LOWER SKILLED.]
4. The Combined Effects of EITC and Minimum Wage Expansions
Increases in the minimum wage and expansions in the EITC reinforce each other.
Among low-wage workers, these changes have produced substantial increases in income. Table
1 demonstrates the combined effect of the two policies, comparing 1993 and 1997. [SHOULD
DISCUSS ALTERNATIVE WAY TO PRESENT NUMBERS. CALL ME.] During this
period the minimum wage rose (after inflation) by 9 percent, while the maximum EITC credit
rose by 39 percent for one-child families (117 percent for two-child families.) For families with
one earner working full-time at the minimum wage, their combined eamings-plus-tax refund
would have risen 13 percent if they had one child (26 percent if they had two or more children.)
This is a significant gain in real purchasing power among these parents.
As the bottom of Table 1 demonstrates, full-time work at the minimum wage no longer
leaves families below the poverty line. As a result of these policy changes, one and two-child
families with a single minimum wage worker now eam enough to escape poverty.
5. Conclusion
The past several years have been very good ones for less-skilled workers in the labor
market. Wages are up and unemployment is down. Among single mothers, many more are
6
This finding, and the subsequent two paragraphs are based on: Bernstein, J., and J.
Schmitt (1998). Making Work Pay: The Impact of the 1996-97 Minimum Wage Increase.
Economic Policy Institute, Washington, D.C.
�participating in the labor market, while welfare caseloads have declined steeply. The research
evidence indicates that these gains partially reflect the strong economy, but that the gains have
been reinforced by Administration policies that have increased the financial rewards for lowwage and less skilled persons to work.
Providing the economic incentives to work are an important legacy of this
Administration. These gains mesh well with other goals this Administration has pursued, such as
adequate child care for the children of working mothers and available training for those workers
who want to increase their skills and work opportunities. In the long run, a healthy strong
economy must rely on a trained and hard-working labor force, with opportunities for both the
more and less educated. There has been real progress toward this goal in recent years.
�Table 1. The Effects of Changing Minimum Wage and EITC on Earnings of Single Parents
(All numbers in $1997)
1993
1997
Percent Change
$4.72
$5.15
9
One-child family
$1,592
$2,210
39
Two-child family
$1,678
$3,656
117
One-child family
$11,032
$12,510
13
Two-child family
$11,118
$13,956
26
0.99
1.13
Program Parameters
Minimum wage
Maximum EITC
Earnings plus credit*
Ratio of earnings
plus credit to poverty
line
One-child family
0.86
1.08
Two-child family
•Assumes one earner works full-time/full-year (2000 hours) at minimum wage.
�Q&As
1. Compliance rates
The EITC amount claim exceeded the amount for which taxpayers were eligible by 35.4
percent in 1988. This error rate declined by 10-15 percentage points by 1994. It is expected tat
it is even lower today because of: 1). Intensified enforcement activities during the 1995 filing
season, 2) requirement that taxpayers will be required to provide a social security number for all
EITC qualifying children, and 3) EITC is now denied to undocumented workers. The Taxpayer
Relief Act of 1997 contains six new Administration proposals to combat EITC noncompliance.
Administrative costs of the EITC are likely to be less than 1 percent ofthe dollars
transferred. Costs to administer the AFDC program are about 16 percent of benefits paid. In
addition, most of the recipients who were found ineligible were needy. In particular, 86 percent
of ineligible EITC recipients had incomes low enough to qualify for the EITC if they had been
otherwise eligible. Most were not eligible because they did not have a child entitling them to
claim a credit.
Noncompliance for all individual income tax returns is 17 percent, not much lower than
the 21 percent for the EITC.
10
�ODDS AND ENDS
The EITC encourages employment by raising the return to work. But it has an
ambiguous effect on hours of work for those already employed. Over the phase-out range, for
example, the total credit received goes down with each additional hour worked, reducing the
incentive to work more hours.
Add citations???
11
�GOOD NEWS FOR LOW INCOME FAMILIES:
How EXPANSIONS IN THE EARNED INCOME TAX CREDIT AND THE MINIMUM WAGE
HAVE REINFORCED THE ECONOMIC GAINS OF LOW-WAGE WORICERS
December 1998
A report by
The Council of Economic Advisers
�December 2, 1998
MEMORANDUM FOR MICHAEL WALDMAN
FROM:
JOSH GOTTHEIMEI
SUBJECT:
FRIDAY'S EITC EVE!
TIME: Friday, 10:45-11:30am
LOCATION: Roosevelt Room
PARTICIPANTS:
/ POTUS
/ VPOTUS(T)
/ 2 Family Members [who have benefited from EITC expansion/ possible minimum wage
increase]
MESSAGE:
/ announce job numbers — tie into: minimum wage and EITC expansion
/ how expansions in EITC and minimum wage have reinforced the economic gains of low-wage
workers
ATTACHED: CEA Report "Good News for Low Income Families..."
�GOOD NEWS FOR Low INCOME FAMILIES:
HOW EXPANSIONS IN THE EARNED INCOME TAX CREDIT AND THE MINIMUM WAGE
HAVE REINFORCED THE ECONOMIC GAINS OF LOW-WAGE WORKERS
December 1998
A report by
The Council of Economic Advisers
�GOOD NEWS FOR LOW INCOME FAMILIES:
How EXPANSIONS IN THE EARNED INCOME TAX CREDIT AND THE MINIMUM WAGE
HAVE REINFORCED THE ECONOMIC GAINS OF LOW-WAGE WORKERS
EXECUTIVE SUMMARY
* The strongest labor market in a generation has resulted in particularly large recent gains among
low-wage and disadvantaged workers^ for whom wages are up and unemployment is down.
Labor force participation among single mothers is also rising rapidly.
* The foundation for these gains is the continued strong economic expansion that has occurred
under this Administration. But the effects of a strong economy have been reinforced by
successful policies designed to make work pay.
* Expansions in the Earned Income Tax Credit (EITC) since 1993 are supplementing the
incomes of low-wage working parents. The EITC is one of our most successful anti-poverty
programs in recent years. Research has also linked the EITC expansions with the strong growth
in labor force participation among single mothers with children.
* Increases in the minimum wage have been important in raising the earnings of low-wage
workers. Empirical research suggests that recent minimuoi^age^increases h^^^Httie^or..no .
adverse effect on "employment; indeed employment amohg'single mothers "--"traditionally one of
the-lowest wage^ groups in the -labor market - is up sharply.
A
* The combined effects of the minimum wage and the EITC ha.ve dramaticallyfincreasedjthe
returns to work for families with children. Between 1993 and 1997, families with one child and
one earner who worked full-time at the minimum wage experieneted?awt3-p"erGent*increase in-their
income, after inflation, just because of these two policies alone. Similar families with two
children experienced'-a 26 percent increase in their income.
�GOOD NEWS FOR Low INCOME FAMILIES:
How EXPANSIONS IN THE EARNED INCOME TAX CREDIT AND THE MINIMUM WAGE
HAVE REINFORCED THE ECONOMIC GAINS OF LOW-WAGE WORKERS
1. Tlie Labor Market Conlinues lo Perform at a Record Pace
American.workers are currently benefiting from the strongest labor market in a
generation. Employment is at an all-time high, with ;i^xsmillion Americans at work in
November 1998 and | million jobs created since 1993. Only I f l percent of the labor force is
unemployed, having fallen by fUj percent since 1993; the unemployment rate is now at its lowest
level since 1969. Moreover, wages of workers are up sharply in the past several years, with a
gain in median wages (after inflation) of 4.4 percent from 1996 through August of this year. As
this report indicates, these gains are particularly strong among low-wage and disadvantaged
workers, following more than a decade of labor market losses. Administration policies have
been important in helping those at the bottom end of the labor market begin to catch up and share
in the overall economic growth of the 1990s.
2. Low-Wage and Disadvantaged Workers are Making Particularly Large Gains
Low-wage and disadvantaged workers have experienced substantial gains in wages and
employment. The real wages of low-wage male workers have shown sharp increases in the past
few years, in contrast to the period from 1979 to 1993, when they declined from $6.51 to $5.55
per hour. (We define low-wage as those workers at the bottom decile ofthe wage distribution.)
Among low-wage women, the decline was 15.8 percent over this period. Charts 1 and 2 show
recent significant improvements iri teal wages among all workers, but with particularly large
gains among the least skilled. Since 1996, men in the bottom decile have increased their
earnings by 5.7 percent after inflation (Chart 1), while women have gained 6.1 percent (Chart 2).
Chart 2: Hourly Wages of Women Aged 16 and Over
Chart 1: Hourly Wages of Men Aged 16 and Over
16
16
r14 -
•S-14 o
?12
no
SOhttodMrorfaii)
20th dedle
1979
1982
1985
1988
1991
Np(e: 1998 figure Is the January through Augusl average.
1994
1997
1979
1982
1985
1988
1991
Note: 1998 figure i i the January through August average.
1994
1997
�At the same time, unemployment rates among the least skilled have plummeted. When
this Administration took office in 1993, 11.1 percent of workers without a high school degree
were unemployed; today that rate has fallen to x.x percent. Among high school graduates (with
no College), the rate has fallen from 6.6 to x].x percent. Hence, low-wage workers are working
more and earning more for every hour that they work.
One group in particular -- single mothers ~ has also experienced significant increases in
labor force participation during this time period. Labor force participation rates among single
mothers began to climb in 1993 after remaining essentially unchanged at 66 percent since 1979.
By 1997,
percent of single mothers were in the labor force. Combined with their recent
earnings increases, this means that employment and income are rising among a group that has
traditionally had extremely high poverty rates and high rates of welfare usage.
3. Administration Policies Have Played a Key Role in These Gains
The strong overall economy has been an important factor in increasing the wages and
employment of less-skilled workers. Typically, employment and unemployment among workers
with less educatiort are more sensitive to changes in the economy, with larger gains in recoveries
and larger losses in downturns. This Administration has worked hard to maintain an
environment in which economic growth can flourish and American businesses can compete
fairly, both at home and abroad. However, the strong economy is not the only reason for these
gains among less skilled workers. Administration policies to "make work pay" by expanding the
Earned Income Tax Credit and raising the minimum wage have also been important.
3.1 Expanding the Earned Income Tax Credit
Description of the EITC
The goals of the Earned Income Tax Credit (EITC) are to reward work so that parents
who are employed full-time do not have to raise their children in poverty and families have a
greater incentive to move from welfare to work. To achieve these goals, the EITC consists of a
refundable tax credit for working families with low incomes. Because the credit is refundable,
individuals can receive the full amount to which they are entitled even if the amount exceeds the
individual income taxes they owe.
Only families that work are eligible for the tax credit, and the amount of the credit
depends on a family's labor market earnings. In 1998, for every dollar a low-income worker
earns up to an established limit, as much as 40 cents is added to compensation in the form of a
tax credit. In particular, the amount of the creditriseswith earnings up to a maximum of $2,271
for a family with one child and $3,756 fora family with two or more children (expressed in 1998
dollars). The credit is flat for a range of earnings and then is phased out.
�Chart 3: The Earned Inoorm Tax Credit in 1993 and 1998
The EITC expansions champiorYea# V
Administration has resulted in a n/.ich''"trong
work incentive than it did in 199.
Chart 3
indicates. For every dollar earneu
a lowincome working parent with one. child, the EITC
nOw adds another 34 cents to the family's income,
up from 19 cents in 1993; forlow-income
working parents with two children, the increasewas from 20 cents to 40 cents. 'In additiorvthe
maximum credit increased dra^iatir^Uy and
5,009 10.000 15,000 20,060 25,000 30,000 eligibility was extended to famHtes with two or
Earnings ' ') '
more children with incomes up to $30 '
Note: Crodl amort depkax) h lor «iBTit/ wtlh (wo'ot more ct**on
The EITC is a non-bureaucratic ' . •>;
reward work effort. There afe no middic t
service providers, no long lines at government office, and there is no need to take • off ffofh
work to apply for the credit. The tax refund is given directly to working families Lv ite - tcr 'al
Revenue Service.
4.000
1
T
Participation in the EITC
While the EITC offers a substantial incentive to Work and move out of poverty, the credit
is effective if low-income families apply for it; About 19.7 million workers are expecte'• io
claim the EITC in tax year 1998, receiving an average credit of $ 1.547. Tfii$x©presem * •
substantial increase over the past decade. A relatively high fraction of famines .eligible fo- ihr
EITC ~ 81-86 percent ~ claim the credit. This participaljon raters substantially higher th.. j.-. :<>
for other antipoverty programs, including AFDC (65-70 percent), Food Stamps (56 percent),
Head Start (28 percent), and Public or Subsidized Housing (20 p^cent^
-.- * ''
The. EITC has reduced poverty
The EITC is targeted to families living in poverty with the goal of lifting their iiicome
aboyc the poverty line. As shown in Chart 4, the latest estimate from the Census Bureau shows
that the EITC removed 4.3 million persons from
Chart.4: >lonibef of PeopiqiRertovwjtbflri Poyerty
poverty in . 1997, which is more than doubly the
number who were removed from poverty in ,
1993.
|
Analyses by the Department of Treasury
show that over half oif these persons (2.2 f
.*
million) were children under the age of 18, and
1.8 million were unmarried mothers and their "
children. In addition, over half oif the decline in
child poverty between 1993 and 1997 can be
explained by changes in taxes, most importantly
the EITC. It is clear that the EITC has become
-a major weapon in our fight against poverty.
1997
1996
1993
19W
11995
. i •.
•• •••••
�Tlie EITC has increased labor force participation of single mothers
Between 1993 and 1996, the real value of the maximum EITC payment increased by 38
percent for single mothers with one child and by I 16 percent for single mothers with two or more
children. These increases coincided with the period when the proportion of single mothers in the
labor force increased dramatically, as mentioned above. In clear contrast, the labor force
participation of single women without children -- who were eligible for only a small credit - did
not change over this period (Chart 5). As Chart 6 indicates, the difference in the employment
rates of single women with and without children has closely tracked the growth in maximum
EITC benefits.
1
Chart 6: Maximum EITC and Difference in Labor Force
Participation Between Single Women With and.Without Children
Chart 5: Labor Force Participation Rates of Single Women
With and Without Children
3,000
100
Single mmon
wilhout chiWran
•"e 2.500 ^
90
UD 2,000 .S
l
) 1,500 -
80
o
a
i 1,000
E
Single womenwith chlldiMi
J
2
2
60
1984
1986
1988
1990
1992
1994 1996
500
1984
1986
1988
1990
1992
1994
-24
1996
Note: After 1990, the maximum EITC Is the average o( the maximum for
taxpayers with one child and with more lhan one child.
One recent study concluded that as much as 60 percent of the increase in the employment
rates of single mothers since 1984 was attributable to expansions in the EITC. A second study
examined the 1986 EITC expansion, which was more modest than the 1993 expansion, and
found that it significantly increased labor force participation among single mothers, especially for
less educated women.
2
3
EITC benefits for married couples are based on the combined earnings of both husband
and wife. Hence, married oouples are more likely than single parent families to fall in the range
of earnings where the EITC is being phased out . This has caused Some researchers to predict that
'These changes are calculated assuming one earner in the family. The same numbers
would apply to a two-parent family With one and two children, and one earner as well.
2
Meyer, B., and D.T. Rosenbaum. (1998). "Welfare, the Earned Income Tax Credit, and
the Employment of Single. Mothers." Department of Economics, Northwestern University.
3
Liebman, J.B. (1997). "The Impact of the Earned Income Tax Credit on Incentives and .
Income Distribution." John F. Kennedy School of Government, Harvard University.
�the EITC might cause a decrease in hours of work among married couples. However, the limited
available evidence suggests that the expansions in 1986, 1990, and 1993 had modest disincentive
effects of 1.2 percentage points on labor force participation of wives, and they actually had a
small positive effect on married men (of 0.2 percentage points).
4
How is the extra income from the EITC being used?
Most families receive their EITC dollars at tax payment time, in the form of a larger
refund. A recent study of families receiving the EITC in the Chicago area found that 61 percent
planned to use at least some of their refund for equity purposes, such as to pay for education (9
percent), repair, buy, or finance a car (10 percent), or to pay for a move (5 percent). Twentyeight percent said they were saving at least some of the EITC for future use.
5
3.2 Increasing the Minimum Wage
The Administration has fought for increases in the minimum wage, and on October 1,
1996 the rate was raised from $4.25 to $4.75. The rate was increased again to $5.15 on
September 1, 1997. Prior tO these increases, it
Chart 7: The Real Value o( the Minimum Wage
had been six years since the minimum wage
7.00
was last raised, and its real value had
6.50
decreased by 15 percent (Chart 7).
As shown in Charts 1 and 2, the wages
, 6.00
of low^wage workers increased substantially
since 1996, and the recent minimum wage
5.50 increases are likely to explain much of this
cn
rise. It has been estimated that almost 10
5.00 "
million workers benefited from the recent
4.50 minimum wage hikes.
Most of the workers benefiting from
4.00
1979 1982 1985 1988. 1991 1994 1997
the wage increases are adults from lower
income families, and their wages are a major
source of their family's earnings. Among workers who were earning between $4.25 and $5,15
just prior to the minimum wage increases, 71 percent were adults (20 of older), 58 percent were
women, and one-third were black or Hispanic workers. Almost half of the affected workers (46
percent) worked full-time, and most ofthe low-wage workers were in low-income households.
6
4
Eissa, N: and H.W. Hoynes (1998). 'The Earned Income Tax Credit and the Labor
Supply of Married Couples." Department of Economics, University of California, Berkeley.
5
Smeeding, T., K. Ross, M. O'Connor, and M. Simon. (1998). 'The Economic Impact of
the EITC/" Center for Policy Research, Maxwell School of Public Policy, Syracuse University.
This finding, and the subsequent two paragraphs are based on: Bernstein, J., and J.
Schmitt (1998). Making Work Pav: The Impact of the 1996-97 Minimum Wage Increase. .
Economic Policy Institute, Washington, D.C.
�That is, 58 percent of the benefits from the minimum wage increases were received by
households in the bottom 40 percent ofthe income distribution. And in 1997, the earnings of the
average minimum wage worker accounted for 54 percent of their family's total earnings.
One of the potential side effects of increasing the minimum wage is a reduction in
employment. That is, with labor more expensive, some firms may hire fewer workers. Many
empirical studies have examined this issue, and the weight ol the evidence suggests that modest
increases in the minimum wage have had very little or no effect on employment. In fact, a recent
study of the 1996-97 wage increases used several different methods and found that the
employment effects were generally quite small, and statistically insignificant.
4. The Combined Effects of EITC and Minimum Wage Expansions
Increases in the minimum wage and expansions in the EITC reinforce each other. Among
low-wage workers, these changes have produced substantial increases in income. Table 1
demonstrates the combined effect of the two policies, comparing 1993 and 1997. During this
period the minimum wage rose (after inflation) by 9 percent, while the maximum EITC credit
rose by 39 percent for one-child families (117 percent for two-child families.) For families with
one earner working full-time at the minimum wage, their combined eamings-plus-tax refund
would have risen 13 percent if they had one child (26 percent if they had two or more children.)
This is a significant gain in real purchasing power among these parents.
As the bottom of Table 1 demonstrates, full-time work at the minimum wage no longer
leaves families below the poverty line. As a result of these policy changes, one and two-child
families with.a single minimum wage worker nOw earn enough to escape poverty.
5. Conclusion
The past several years have been very good ones for less-skilled workers in the labor
market. Wages are up and unemployment is down. Among single mothers, many more are
participating in the labor market, while welfare caseloads have declined steeply. The research
evidence indicates that these gains partially reflect the strong economy, but that the gains have
been reinforced by Administration policies that have increased the financial rewards for lowwage and less skilled persons to work.
Providing the economic incentives to work are an important legacy of this
.Administration.; These gains mesh well with other goals this Administration has pursued, such as
adequate child care for the children of working mothers and available training for those workers
who want to increase their skills and work opportunities. In the long run, a healthy strong
economy must rely on a trained and hard-working labor force, with opportunities for both the
more and less educated. There has been real progress toward this goal in recent years.
�Table 1. The Effects of Changing Minimum Wage and EITC on Earnings of Single Parents
(All numbers in $1997)
1993
• 1997
Percenl Change
$4.72
$5.15
9
One-child family
$1,592
$2,210
39
Two-child family
$1,678
$3,656
117
One-child family
$11,032
$12,510
13
Two-child family
$11,118
$13,956
26
0.99
1.13
Program Parameters
Minimum wage
Maximum EITC
Earnings plus credit*
Ratio of earnings
plus credit to povertv
line
One-child family
1.08
• 0.86
Two-child family
•Assumes one earner works full-time/full-year (2000 hours) at minimum wage!
7
�a^OWMjL — - >
V
�when construction
* that is why one of the very first things we did...
* today we have new evidence that amy's experience is not an isolated case
* details of eitc section
* also shows that minimum wage is big success
—
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mtikp s e
Ur
the minimum
wngr in * lining Witgw."
1
'y^lB^f ^
of<5oiirse, the other big factor: economy is booming, end of this month longest boom
joj>s report
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that is why we're working so hard on asian crisis
�THE WHITE
HOUSE
WASHINGTON
J u l y 28, 1993
EARNED INCOME TAX CREDIT ADDRESS
DATE:
LOCATION:
TIME:
FROM:
I.
July 29, 1993
OEOB 450
11:30 a.m.
Jonathan Prince
PURPOSE
This event i s designed t o h i g h l i g h t one o f t h e l a r g e s t
investments i n t h e r e c o n c i l i a t i o n b i l l — a t a x c r e d i t f o r
working f a m i l i e s .
II.
BACKGROUND
I t i s widely but wrongly believed by most Americans t h a t your
budget w i l l mean an increase i n t h e i r own taxes. I t i s c e r t a i n l y
not understood t h a t t h e budget includes a dramatic expansion of
the Earned Income Tax C r e d i t — which w i l l provide a t a x break
f o r m i l l i o n s of Americans.
The e s s e n t i a l message of t h i s event: This budget i s good for
people and i t i s very good for working families. I f i t i s
passed, a tax credit for working families w i l l be s i g n i f i c a n t l y
expanded.
Three f a m i l i e s who c u r r e n t l y receive a c r e d i t through EITC w i l l
j o i n you a t t h e event t o b r i e f l y t e l l t h e i r stGiryT Because t h e
event i s designed t o h i g h l i g h t t h e budget's b e n e f i t t o working
f a m i l i e s , we thought i t would be p a r t i c u l a r l y appropriate t o
include Mrs. C l i n t o n .
A d d i t i o n a l l y , we are p r o v i d i n g Members of Congress w i t h a
d i s t r i c t by d i s t r i c t analysis t h a t i n d i c a t e s t h e percentage o f
f a m i l i e s i n each d i s t r i c t t h a t w i l l be e l i g i b l e f o r a t a x break
under your proposal.
III.
PARTICIPANTS
The Presiclent
The F i r s t Lady
The Risner Family:
Connie, 34 and Frank Dale, 35
Daughters Brandi, 14; Lesley, 1 1 ; and Jessica, 8
The Risner's are from Mt. S t e r l i n g , Kentucky. Frank has
been a self-employed tax-preparer since 1989; Connie i s a
�f u l l - t i m e secretary a t an Extension Service county o f f i c e .
They used t h e i r c r e d i t t h i s year and l a s t year t o help b u i l d
Frank's o f f i c e . Frank worked f o r h i s f a t h e r as a t a x preparer f o r 16 years u n t i l h i s f a t h e r died of a heart
attack. Frank went i n t o t h e o f f i c e supply business i n 1985,
but t h e business went i n t o bankruptcy.
The Dorsey Family:
Kevin, 31 and Marian, 30
Sons: Delmario, 8; Anthony, 4; Kevin, 2 ; and Dexter, 1
An African-American f a m i l y from A t l a n t a , t h e Dorseys used
l a s t year's c r e d i t t o pay overdue b i l l s , f r e e i n g money t o
make a down payment on a used car Kevin uses t o g e t t o work.
Kevin i s a former drug user; he was homeless f o r several
years. Today he i s t h e manager o f a food d i s t r i b u t i o n
warehouse f o r t h e A t l a n t a Comimuriity Food Bank. He married
his w i f e i n 1991 and adopted her two boys; she r e c e n t l y
began work a t a c l e r i c a l / s e c r e t a r i a l temporary service. The
fainily l i v e s i n Section 8 housing.
The Dikeman Family:
JtoJbin, 34
(divorced)
Daughter: C h r i s t i a n e , 15 and Son: Nicholas, 13; Robin
has an 18 y e a r - o l d daughter who i s not a t t e n d i n g .
tRobin.has been d a v o r c e d v ^ r f f i v e years. She used her EITC
l a s t year t o buy a used car"which i s her t r a n s p o r t a t i o n t o
work. She believes she would have l o s t her j o b as an
account c l e r k f o r a property management f i r m w i t h o u t t h e
car.
She r e c e n t l y received a P e l l g r a n t and f i n a n c i a l a i d
from t h e U n i v e r s i t y o f Tulsa where she plans t o begin
classes i n t h e f a l l . She expects t h a t her daughter w i l l
joiiv^her a f t e r her senior year i n high school.
Audience
The audience, w i l l be composed p r i m a r i l y of Members of
Congress, and r e p r e s e n t a t i v e s of c h i l d r e n ' s , i h i h o r i t y ,
women's, and other community groups from across t h e country.
They have a l l i n d i c a t e d support f o r t h e budget. The
outreach was conducted by A l e x i s Herman and P u b l i c L i a i s o n
s t a f f people. A d d i t i o n a l l y , t h e r e w i l l be a group from Bob
Greenstein's Center f o r Budget and P o l i c y P r i o r i t i e s ; t h e
Center was enormously h e l p f u l i n p u t t i n g t h i s event
together.
IV.
PRESS
Open Press,
The Media A f f a i r s s t a f f i s aggressively s e l l i n g t h e
p a r t i c i p a t i n g f a m i l i e s t o l o c a l media o u t l e t s from t h e i r
home and other markets. We w i l l also d i s t r i b u t e t h e
d i s t r i c t by d i s t r i c t a n a l y s i s o f EITC e l i g i b i l i t y .
�V.
SEQUENCE OF EVENTS
The President and the F i r s t Lady w i l l meet the families
in the Oval Office.
The entire party w i l l proceed to OEOB 450. You and the
F i r s t Lady w i l l be wearing l a v a l i e r mikes.
The three families w i l l proceed to the stage.
You and the F i r s t Lady w i l l proceed to the stage.
The F i r s t Lady w i l l make brief opening remarks.
The F i r s t Lady w i l l introduce the three families.
The Risner Family w i l l speak.
The Dorsey Family w i l l speak.
The Dikeman Family w i l l speak.
Robin Dikeman w i l l introduce you.
You w i l l make remarks.
You and the F i r s t Lady may mingle with the audience.
VI.
Remarks prepared by Alan Stone.
�THE WHITE HOUSE
Office of the Press Secretary
(New York, New York)
For Immediate Release
September 14, 1998
REMARKS BY THE PRESIDENT
TO THE COUNCIL ON FOREIGN RELATIONS
Council on Foreign Relations Building
New York, New York
12:00 P.M. EDT
THE PRESIDENT: Thank you very much, Pete. Hillary and I are delighted to be here
with you and Joan, and I'm glad to be joined by Secretary Rubin and Jim Harmon, Gene
Sperling, other members of our team. I'm glad to see Dick Holbrooke over here. I hope, if we
can overcome the inertia of Congress, he will soon be a member ofthe team again. And I thank
David Rockefeller and Les Gelb and others who welcomed us here today.
The subject that I want to discuss ~ let me just say one thing in advance -- I'm going to
give you my best thoughts. We have been working on this for three years at some level of
intensity or another, going back to the Naples G-7 meeting in the aftermath ofthe Mexican
financial crisis. I have done everything I could do personally to reach out across the country, and
indeed across the world, for any new ideas from any source. I'm going to give you my best
thinking today about what we can do, but I want you to know that I'm here, and i f l had my
druthers, this would be about a three-hour session where I'd give this talk and then I would listen
for the rest of the time.
So I want to encourage you, if you think we're right, to support us. But if you have any
ideas, for goodness sake, share them, because I agree with what Pete said: this is the biggest
financial challenge facing the world in a half-century. And the United States has an absolutely
inescapable obligation to lead, and to lead in a way that's consistent with our values and our
obligation to see that what we're doing helps lift the lives of ordinary people here at home and all
around the world.
The Council on Foreign Relations has always stood for political and economic freedom,
since right after World War I. And I think one of the things that has impacted all of us, and it
was implicit in what Pete said, is that for the last decade the growth of freedom around the world,
with more than half the people in the world living under governments of their own choosing,
more than half the villages, the one million villages in China now, even electing their own
governments, and this sweeping replacement of command and control economies by market
economies. I think it seems to have happened so easily, so effortlessly, so inexorably, that I
think we think the trend is inevitable and irreversible.
�But if you consider today's economic difficulties, disruptions, and the plain old, deep,
personal disappointments of now tens of millions of people around the world, it is clear to me
that there is now a stark challenge not only to economic freedom, but, if unaddressed, a challenge
that could stem the rising tide of political liberty as well.
Obviously we have profound interests here. It is a great irony that we are at a moment of
unsurpassed economic strength at a time of such turmoil in the world economy. We, I think all
of us in this room, know that our future prosperity depends upon whether we can work with
others to restore confidence, manage change, stabilize the financial system, and spur robust
global growth.
For most of the last 30 years, the United States and the rest of the world has been
preoccupied by inflation, for reasons that all of you here know all too well — and it was a good
thing to be preoccupied with. Today the low and stable inflation we enjoy has been critical to
our economic health, and low inflation has also contributed to that of many other nations as well.
But clearly the balance of risks has now shifted, with a full quarter ofthe world's population
living in countries with declining economic growth or negative economic growth.
Therefore, I believe the industrial world's chief priority today, plainly, is to spur growth.
It seems to me there are six immediate steps we should take to help contain the current financial
turmoil around the world, and then two longer-term projects in which we must be involved.
To take the immediate first, we must work with Japan, Europe, and other nations to spur
growth. Second, we will expand our efforts to enable viable businesses in Asia to emerge from
crippling debt burdens so they can once again contribute to growth and job creation. Third,
we've asked the World Bank to double its support for the social safety net in Asia to help people
who are innocent victims of financial turmoil. Fourth, we'll urge the major industrial economies
to stand ready to use the $15 billion in IMF emergency funds to help stop the financial contagion
from spreading to Latin America and elsewhere. Fifth, our Ex-Im Bank, under the leadership of
Jim Harmon, will intensify its efforts to generate economic activity in the developing world
immediately, in the next three months. And sixth, Congress must live up to its responsibility for
continued prosperity by meeting our obligations to the International Monetary Fund.
Secretary Rubin has been working with his counterparts in the G-7 to get cooperative
support for several of these measures. I understand Chairman Greenspan is also consulting with
his counterparts on these items as well.
As we take these immediate steps, we also must intensify our efforts to reform our trade
and financial institutions so that they can respond better to the challenges we now face and those
we are likely to face in the future. We must build a stronger and more accountable global trading
system, pressing forward with market-opening initiatives, but also advancing the protection of
labor and environmental interests, and doing more to ensure that trade helps the lives of ordinary
citizens across the globe.
�Above all, we must accelerate our efforts to reform the international financial system.
Today I have asked Secretary Rubin and Federal Reserve Board Chairman Greenspan to convene
a major meeting of their counterparts within the next 30 days to recommend ways to adapt the
international financial architecture to the 21st century.
Over the past six years, our strategy at home offiscaldiscipline, investment in the skills
of our people, and open trade has worked for all Americans. Unemployment at a 28-year low,
inflation a 32-year low, wages rising at twice the rate of inflation after decades of stagnation.
And on October 1st we'll have the first balanced budget in 29 years.
But the global economy brought a lot of that prosperity to us, and now fast-moving
currents have brought or aggravated problems in Russia and Asia. They threaten emerging
economies from Latin America to South Africa. With a quarter of the world's population in
declining growth, we must recognize what Chairman Greenspan said the other day: we cannot
forever be an oasis of prosperity. Growth at home depends upon growth abroad. A full 30
percent of our growth, just since I became President, has been due to our expanding positive
involvement in the global economy.
That's why ordinary Americans should care if Asia or Russia or South America is on
solid economic footing. These people are our customers. With one-third of the growth of our
economy coming from exports, much of it from emerging markets, we know that those markets
will falter as their economies flatten. When the problem is widespread and perceived to be
moving in the wrong direction, we have seen that our stock market can react, having a direct and
immediate impact on the wealth of the American people.
These nations are also our competitors. And under conditions of decent equilibrium that
is a very good thing, indeed. But when their currencies drop precipitously, the prices of their
goods fall, they could undercut the sales of our own goods here at home that are otherwise
profitable, dramatically increasing our trade deficit under circumstances that could cause the
American people to turn away from open trade toward protectionism in a way that has terrific
negative consequences long-term for our global growth objectives.
Finally, these nations are our friends, our allies and our security partners. Where
economic turmoil plunges millions into sudden poverty and disrupts and disorients the lives of
ordinary people, the risks of political and social instability and of a turn from democracy clearly
rise. Just look at Russia. Russia is facing an economic crisis that threatens the extraordinary
progress the Russian people have made in just seven years, building a new society from the
ground up. The ruble and the stock market have plummeted, banks are weak, tax collections
have slowed, the government has trouble paying its debts and its salaries.
Some Russians have become wealthy, but many, many more are struggling to provide for
their families. I talked to some of them when I was in Russia just a few days ago.
Amid such political uncertainty and economic difficulty, some now talk of abandoning
the path of reform and returning to policies of the past, even policies that have already failed. At
�worst, adversity in Russia could affect not only the Russian economy and prospects for our
economic cooperation ~ at worst, it could have an impact on our cooperation with Russia on
nuclear disarmament, on fighting terrorism and the spread of weapons of mass destruction, on
standing together for peace, from the Balkans to the Middle East.
Now Russia has a new Prime Minister, Mr. Primakov, who's been in office a grand total
of four days. He and President Yeltsin face one of the great challenges of their time. Never has
there been a more important moment to set a clear direction for the future, to affirm the
commitment of Russia to democracy and to free markets, and to take decisive steps to stabilize
the economy and restore investor confidence.
But if Russia is willing to take these steps, we must do everything we can to provide
support to them. Because again I say, as long as ordinary people don't feel any benefits from
this, in the end it's going to be difficult to sustain the direction we think the world should take.
On the other hand, we need to be honest with Russia and everyone else. No nation, rich
or poor, democratic or authoritarian, can escape the fundamental economic imperatives of the
global market. No nation can escape its discipline. No nation can avoid its responsibility to do
its part.
But since all economies are increasingly interdependent, fear and uncertainty about the
economy of one country can prompt investors to pull money out of other countries thousands of
miles away. Markets work best when they are driven neither by excessive inflows or outflows of
capital based on indiscriminate optimism or pessimism.
Regardless of what changes in policies or institutions may be warranted, we have to say
we'll only be able to help those countries who are willing to help themselves. If a nation chooses
to print money indiscriminately, to wink at cronyism or corruption, to hide bad loans and protect
corrupt or inefficient banks, then investors, foreign and domestic, sooner or later, will withdraw
their investments, with consequences both swift and severe.
That is why we support the fundamental approach of the International Monetary Fund to
extend assistance only when nations have taken responsibility, strengthening their banking
systems, introducing honest accounting and open markets, awarding credit on merit instead of
connections.
Still, what has been done is clearly not enough to reverse the decline in particular
countries, to douse the flames of the international financial crisis, to support steady and
sustainable growth in the future. In the face of this new challenge, America can and must
continue to act and to lead to take the urgent steps needed today to calm thefinancialcrisis,
restart the engine of growth in Asia, and minimize the impact offinancialturmoil on other
nations, and to make certain that for tomorrow the institutions and rules of international finance
and international trade are prepared to support steady and sustainable growth over the long term.
First and foremost, the leading economic nations must act together to spur global growth.
�Our strong and growing economy here has made a major contribution to global growth, just as
our weak economy was holding the world back six years ago when I attended my first G-7
meeting in Tokyo and every other country said, the first thing they needed was for America to
put its economic house in order. We did that.
Now I believe strongly we must maintain our fiscal discipline. It has led to lower interest
rates and a huge investment and job growth. Maintaining economic growth is the best thing we
can do right now, not only for the United States but for the global economy.
I would also remember that back in 1993 we had a general agreement that what was
needed was America should get rid of its deficit, Europe should lower its interest rates, and Japan
should open its markets. There was this general agreement that if we did all those things, we
would have a remarkable resumption of growth.
Europe did moderate its interest rates and the then prime minister ~ now the finance
minister — Mr. Miyazawa, oversaw a significant market opening trade agreement between the
United States and Japan, which also benefited others, not just us. And of course we got rid of our
deficit. The results were quite satisfactory for several years for us.
Now Europe has to continue to pursue policies that will spur growth and keep their
markets open because they, too, must be able to provide markets for Asian goods as those nations
seek to find their footing. But the key here is Japan, for the second largest economy in the world,
by far the biggest economy in Asia, has now gone several years without any economic growth.
Thank goodness, a lot of their ordinary citizens have been able to maintain a decent life because
of the wealth of their country and probably because of the enormous personal savings rate they
have enjoyed for many, many years now.
But it is difficult to see how any actions of the world community can be successful in
restoring growth in Asia in the absence of the restoration of growth in Japan, which would enable
Japan to lead the region out of its present condition. Therefore, we must support Japan and do
everything we can to help create the conditions in which, together, we can all lead again, just as
we did in 1993.
Their challenges are quite formidable. They have to spur domestic demand, revive a
banking system, restore confidence, deregulate the economy, and open markets. And we all
know all the forces that seem to be working against these developments in Japan. But I would
remind you that this is a very strong, sophisticated nation full of people of knowledge and
enormous achievement. It is fully capable of playing its world leadership role. I believe its
business leaders right now know what needs to be done and would support it.
Next week I'm going to meet with Prime Minister Obuchi here in New York to discuss
how America can support Japan's efforts to restore economic growth and investor confidence.
And I will do everything I can to try to make sure that as we go forward, we have America,
Europe, and Japan all doing our part to get beyond this present moment, just as we did back in
1993.
�The second step we should take is to intensify our efforts to speed economic recovery in
Asia. When countries like South Korea and Thailand have taken strong and responsible steps,
the freefall has ended, progress is being made. But the human cost of Asia's collapse is only now
being fully felt. Recent press reports have described an entire generation working its way into
the middle class over 25 years, then being plummeted into poverty within a matter of months.
The stories are heartbreaking — doctors and nurses forced to live in the lobby of a closed
hospital; middle class families who own their own homes, sent their children to college, traveled
abroad, now living by selling their possessions.
It is in our interest to help these nations and these people recover. They will become once
again our great markets and our great partners. It is also the right thing to do. We've worked
with international lenders, like the IMF, to help these nations to adopt pro-growth budget, tax,
and monetary policies, but clearly we're going to have to do more to restore Asian growth. We
must work to lift the weight of private sector debt that has frozen the Asian economies.
Today, I'm asking Secretary Rubin to work with other financial authorities and
international economic institutions to enhance efforts to explore comprehensive plans to help
Asian corporations emerge from massive debt where individual firms have been swept under by
systemic, national economic problems, rather than their own errors. We need to get credit
flowing again. We need to get business back to making products, producing services, creating
jobs.
Third, Asian businesses need assistance, but so do millions of Asian families. We must
do more to establish an adequate social safety net in recovering nations. Wrenching economic
transition without an adequate social safety net can sacrifice lives in the name of economic
theory, and, I might add, can generate thereby so much resistance that reform grinds to a halt. If
we want these countries to do tough things, we have to protect the most defenseless people in the
society and we have to protect people who get hurt when they didn't do anything wrong. I think
that is terribly important.
With our support, the World Bank and the Asian Development Bank have started to deal
with these challenges, but they have to expand their efforts. There is simply not enough being
done. I asked them to double their aid through an expanded social compact initiative focusing on
job assistance, basic needs and economic transition, on children and the elderly, on groups most
vulnerable to economic change. And I want to commend Jim Wolfensohn for his efforts and his
willingness to lead this expanded initiative. We have to be ready to respond immediately with
financial force if necessary, to the currency crisis, if it spreads, especially if it threatens the
economies of Latin America, where nations have struggled to make progress to do the right
thing, only to find themselves buffeted by economic storms outside their control.
Therefore, the major economies should stand ready to activate the $15 billion now in the
emergency funds of the IMF, the general agreement to borrow, to ensure that the IMF continues
to support reform and fight economic contagion.
Fifth, our Export-Import Bank will increase its commitments to specific economic
�development projects over the next three years — three months — projects which will have
concrete benefits for ordinary citizens in other countries, projects which will increase our own
exports and thereby help our economy, and ones which can help to restore confidence in
countries that they are not alone and that actual, specific, positive developments can occur.
Sixth, for the effort of the international community to succeed, America simply must meet its
own obligations to the International Monetary Fund. After a year of financial firefighting, the
IMF's resources are badly strained. Every day we don't act, we undermine the confidence the
world badly needs that we are trying to restore. Congress simply must assume its responsibility
for our leadership in the economy.
In my State of the Union address, I said it was better to prepare for a storm when the skies
were clear than when the clouds were overhead. Well, eight months later, the clouds are closer,
and you can nearly hear the thunder. Now, the Senate, by an overwhelming bipartisan majority,
has, thankfully, approved our obligation to fund our part of the International Monetary Fund.
But with only five weeks left in this congressional session, there is still no action from the House
of Representatives.
Let me put this as plainly as I can: failure by this Congress to pay our dues to the IMF
will put our own prosperity at risk. Failure to act will send a sharp signal that at a time of
economic challenge, our lawmakers were unwilling to protect our workers, our businesses, our
fanners from the risks of global economic change, and unwilling to maintain our leadership in
building a global economy system that has benefited us more than any other nation.
Concerted action to spur growth, helping Asia through private sector debt restructuring,
and a strengthened social safety net, helping to protect the rest of the world through the use ofthe
IMF's emergency fund, increasing the activity of the Ex-Im Bank, and meeting our own
obligations to the IMF ~ these are the six immediate steps we want to take.
But we must also be willing to take action for the long run — to modify the financial and
trading institutions of the world to match the realities of the new economy they serve. By
creating the WTO, the World Trading Organization, in 1994, we began to build a modern trading
system. We must redouble our efforts to tear down barriers around the world. But as I said in
Geneva last May, we must do more to ensure that spirited economic competition among nations
never becomes a race to the bottom ~ in environmental protection, consumer protection, or labor
standards.
We are working to open the procedures of the WTO to participation by the public and the
full range of affected interests, so that people will know and see and be able to do for themselves
things which will ensure that the trading system makes the world better for all the people in all
the countries.
We've already completed 260 trade agreements, opening markets in areas from autos to
telecommunications. Next year we will host the meeting of the world's trade ministers to set the
agenda for expanded trade in the first decade in the new century.
�History teaches us that at a time of worldwide difficulty, it would be folly to retreat into a
protectionist shell. We must keep trade flowing among nations, but I will say again, if we want
to do that, we have got to give ordinary citizens and the groups that represent them in countries
all over the world the sense that it is going to be done in a fair way, consistent with nations'
obligations to advance the interests of their working people and protect not only their national,
but the global environment.
This November, when I meet with the leaders of the Asian economies at the APEC
meeting, we will move forward to further open markets in Asia. And when Congress returns
next year, I will work to pass legislation to open markets further --from trade negotiating powers
to the African Trade Initiative. I will do so in a way that I believe will win broad support from a
majority of both parties.
From the G-7 meeting in Halifax in 1995 in the wake of the Mexican financial crisis, to
the Birmingham meeting this year, we have been working, also, with our major economic
partners to plan for new financial architecture for the 21st century.
For the first time, this year we included key emerging markets in the process in a new
Group of 22, recognizing their important stake in the global economy. This group has been
working together for nearly a year now to improve the global financial assistance with a special
focus on improving financial sectors, on transparency, and on private sector burden sharing.
I just want to emphasize again that even as we respond to the urgent alarms of the
moment, we must speed the pace of this systemic work as well. That is why I have asked
Secretary Rubin and Chairman Greenspan to convene the finance ministers and central bankers
of the G-7 and key emerging economies in Washington within 30 days to develop a preliminary
report to the heads of state by the beginning of next year on strengthening the world financial
system.
We must develop policies so that countries can reap the benefits of free-flowing capital in
a way that is safe and sustainable. We must adapt the IMF so that it can more effectively
confront the new types of financial crises, minimizing their frequency, severity, and human cost.
We need to consider ways to extend emergency financing when countries are battling crises of
confidence due to world financial distress as distinct from their own errors in policy. We must
find ways to tap the energy of global markets without sentencing the world to a cycle of
continued extreme crises.
For half a century now in our national economy, we have learned not to eliminate but to
tame and limit the swings of boom and bust. In the 21 st century, we have to find a way to do
that in the global economy as well.
I've discussed this in recent days with Prime Minister Blair of Great Britain, who is now
the Chair of the G-7. He shares my belief that this is an urgent task. It is critical to the mission
that he and I and Prime Minister Prodi of Italy will be discussing next week at the New York
University Law School in a very interesting meeting that the First Lady and others in our
�administration helped to organize on how to extend the benefits of the world economy to all and
how to strengthen democracy in a time of such sweeping economic change.
Now, let me just say it all again very briefly: in short, we must improve our ability to
address the current financial emergency, and we must build a system to prevent such future
emergencies, whenever possible, and to blunt their impact when they do occur. There is no
mission more critical to our own strength and security.
And let me say this again, what is at stake is more than the spread of free markets and
their integration into the global economy. The forces behind the global economy are also those
that deepen democratic liberties: the free flow of ideas and information, open borders and easy
travel, the rule of law, fair and even-handed enforcement, protection for consumers, a skilled and
educated work force.
Each of these things matters not only to the wealth of nations but to the health of
freedom. If citizens tire of waiting for democracy and free markets to deliver a better life for
them, there is a real risk that democracy and free markets, instead of continuing to thrive
together, will begin to shrivel together. This would pose great risks not only for our economic
interests but for our security.
We see around the world the international aggressors, the harborers of terrorists, the drug
lords. Who are these countries? They're authoritarian nations without democracy and without
open markets. Nations that give their people freedom are good neighbors; when nations turn
away from freedom, they turn inward toward tension, hatred, and hostility.
We now have a chance to create opportunity on a worldwide scale. The difficulties of the
moment should not obscure us to the advances of the last several years. We clearly have it
within our means, if we do the right things, to lift billions and billions of people around the world
into a global middle class and into participation in global democracy and genuine efforts toward
peace and reconciliation. That is a possibility, but recent events show it is not a certainty.
At this moment, therefore, the United States is called upon once again to lead — to organize the
forces of a committed world; to channel the unruly energies of the global economy into positive
avenues; to advance our interests, reinforce our values, enhance our security.
In this room, I think it is not too simple to say we know what to do. The World War II
generation did it for us 50 years ago. Now, it is time for us to rise to our responsibility, as
America has called upon to do so often so many times in the past. We can, if we do that, redeem
the promise of the global economy and strengthen our own nation for a new century.
Thank you very much.
�
Dublin Core
The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/.
Title
A name given to the resource
Lowell Weiss
Creator
An entity primarily responsible for making the resource
Lowell Weiss
Office of Speechwriting
Date
A point or period of time associated with an event in the lifecycle of the resource
1997-2001
Is Part Of
A related resource in which the described resource is physically or logically included.
<a href="http://clinton.presidentiallibraries.us/items/show/36408">Collection Finding Aid</a>
<a href="https://catalog.archives.gov/id/7431951">National Archives Catalog Description</a>
Identifier
An unambiguous reference to the resource within a given context
2006-0470-F
Description
An account of the resource
This collection consists of the speechwriting files of Lowell Weiss. Lowell Weiss worked as a Special Assistant to the President, Presidential Speechwriter from June 1997 - August 2000. Weiss traveled and wrote speeches for President Clinton on domestic issues. His speeches cover a broad array of topics. Major issues he wrote on concern the environment, education, the economy, and race relations. He wrote weekly radio addresses; commencement speeches; and remarks for bill signings, events, and conferences. The records consist of speeches, drafts, memoranda, correspondence, schedules, event and travel arrangements, notes, articles, and printed email.
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
Publisher
An entity responsible for making the resource available
William J. Clinton Presidential Library & Museum
Extent
The size or duration of the resource.
464 folders in 36 boxes
Text
A resource consisting primarily of words for reading. Examples include books, letters, dissertations, poems, newspapers, articles, archives of mailing lists. Note that facsimiles or images of texts are still of the genre Text.
Original Format
The type of object, such as painting, sculpture, paper, photo, and additional data
Paper
Dublin Core
The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/.
Title
A name given to the resource
EITC [Earned Income Tax Credit]
Creator
An entity primarily responsible for making the resource
Office of Speechwriting
Lowell Weiss
Identifier
An unambiguous reference to the resource within a given context
2006-0470-F
Is Part Of
A related resource in which the described resource is physically or logically included.
Box 13
<a href="http://clinton.presidentiallibraries.us/items/show/36408">Collection Finding Aid</a>
<a href="https://catalog.archives.gov/id/20760947">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
Publisher
An entity responsible for making the resource available
William J. Clinton Presidential Library & Museum
Format
The file format, physical medium, or dimensions of the resource
Adobe Acrobat Document
Medium
The material or physical carrier of the resource.
Preservation-Reproduction-Reference
Source
A related resource from which the described resource is derived
20760947
42-t-7431951-20060470-F-013-003-2015