Remarks to Business Leaders on the Deficit Reduction Plan
November 23, 1987
Mr. Baker. Mr. President, the group you have here is a representative group from the Wall Street community, from the industrial community, from labor, and from the farming sector, from associations such as the Chamber of Commerce, and other representatives of important sectors of the economy. It's been our privilege and pleasure to have lunch together and to talk about the package just negotiated between the White House and Congress in an effort to reduce the deficit and to avoid a sequester. It's been a good conversation. And I think there's a general consensus that you are entitled to high marks for having taken this initiative, and we were fortunate that we were able to produce a result. They each have their own views on the various aspects of it, and I'm sure they would like very much to discuss this with you.
The President. Well, I want to thank you all for coming today, especially on such short notice. I thought that it was important quickly to begin a series of meetings with a wide range of opinion leaders to tell you what is in and what is not in our agreement on the budget. And I know that you have received a rather detailed assessment from Howard and Jim Baker and Jim Miller.
Let me mention three things about this agreement that I believe are important to reiterate. As I said on Friday, this agreement must not be the last word on deficit reduction. This is a good first step, a basic framework to work within for this year and next. And we can and should do more.
Second, let me share with you the personal assurances that I have from the congressional leaders as well as the chairmen of the tax writing committees that they have committed to hold the level of taxes to no more than the $9 billion this year and the $14 billion next. They've also committed to leave our tax reform intact. There will be no change in marginal rates or indexing, and there will also be no new broad-based taxes, such as a sales tax or new excise taxes. I know that you're concerned about provisions I haven't mentioned, like taxing mergers and acquisitions. Just let me say that this agreement does not preclude us from vetoing any or all of the legislation that comes out of this agreement, and I will veto any bad tax bill.
Finally, I believe, and I think that you will agree, that this package is better than the automatic sequester under the Gramm-Rudman-Hollings law. It prevents the otherwise indiscriminate, across-the-board cuts of a sequester, especially those that will cripple our national defense, and it provides for more reforms in entitlement programs, reforms that will provide lasting reductions. It calls for the imposition of over $1 billion in user fees to advance my policy of requiring people to pay for the services they receive. And perhaps most importantly, it shows that the executive and the Congress can come together to produce a credible package rather than to have to rely on the autopilot approach of Gramm-Rudman-Hollings. I think that's what the American people are looking for: the ability of this government to make choices.
And now, John, I'd like to call on you, John Phelan, to tell us how you think the markets here and abroad will react and perform in the foreseeable future.
Mr. Phelan. Well, I would merely echo what others have said, Mr. President, that I think one of the important things about this agreement and this accord is not that it's an end, but it's a beginning. As you've said, it must continue in some way. It's much better than sequester. I think this at least sends a message both domestically, but more importantly abroad, that the leadership in this country is willing to sit down to work on an agreement, realize the seriousness of it. And I think that a lot of people don't understand the impact of interest rates that all of this has had not only on our domestic markets but overseas, as well. And I think, without a voluntary agreement like this, that would certainly be viewed in foreign markets and by foreign governments as an extremely serious situation in which it was not possible to get an agreement of this country, and I think that would be to the long-term detrimental interest of this country. It certainly is the beginning.
Reporter. Mr. President, can you set the record straight, sir, as to whether you would consider any pardons in the Iran-contra affair before Mr. Walsh's investigation is over?
The President. This is a subject I have not and will not discuss at this time.
Q. Until what point, Mr. President?
The President. Well, just let's say sometime in the future.
Q. Would you address the Iran-contra report sir? You have not commented on that. It's been out almost a week.
The President. Well, maybe no comment is called for.
Q. Sir, why is that? After months of investigations, you said that when the report was finally in we would hear a lot from you -- that we wouldn't be able to shut you up, I think was your words.
The President. Well, maybe they labored and brought forth a mouse.
Note: The President spoke at 2:34 p.m. in the Cabinet Room at the White House. In his opening remarks, he referred to Howard H. Baker, Jr., Chief of Staff to the President; James A. Baker III, Secretary of the Treasury; and James C. Miller III, Director of the Office of Management and Budget. John J. Phelan was the chairman and chief executive officer of the New York Stock Exchange.