Remarks by Governor Bill Clinton A Roundtable Discussion with Employees of Sandia National Laboratories Albuquerque, N.M. September 18, 1992 Thank you very much, Senator Bingaman. I am delighted to be here. I want to thank Al Narath and I want to thank you, Sig, for coming down from Los Alamos. And I want to thank the people who provided this tour for me this morning to see some of the things that I care most about, in terms of America's scientific and technological efforts. I'm glad to be here with my long time friend, Governor Bruce King. He and I are two of only three serving governors who actually served in the '70's, the '80's and the '90's. We're just about used up, but we're hanging in there. And I'd like to thank my friend, Congressman Richardson, for being here and for all the work that he's done on my behalf. And I'd like to acknowledge your state Democratic Party chairman, Ray Powell, who was for many years a distinguished employee of this laboratory. He told me that he would help me to carry New Mexico if I promised to take care of his former place of employment. You know, this is a funny business we're in and it's amazing how words get twisted around. I was over there cringing when Senator Bingaman said that you got here by lottery today. I can see tomorrow's headlines--''Clinton embraces gambling.'' Just when I come here to exalt the rule of rationality in human endeavor, instead it is all reduced to a game of chance. Let me say that I came here primarily to listen, to learn. I've already learned a great deal today and I want to get to your questions. But I would like to make a few points so that you kind of know where I'm coming from. I spent the last dozen years or so as the governor of a state struggling to compete in a tough global economy, a state like New Mexico, with an inordinate percentage of poor people, but also a state full of bright and growing companies and a lot of entrepreneurial energy and people determined to compete in the world today. We tried to develop as best we could a state economic strategy, since there was no national economic strategy. And one of the things we made up our minds to do was not to lose manufacturing jobs, even though America was. And it worked, to some extent. We were able to increase manufacturing jobs substantially while the nation was losing them--1.3 million just in the last three and half years. And for the last three months the Bureau of Labor Statistics has said for the previous 12 month period we've led the nation in private sector job growth. But it has also become clear to me over the last several years, and something I've been trying to talk about seriously for five years--is that most Americans are employed but most Americans are working harder for lower wages than they were making a decade ago. And we are changing the job mix of America in a way that is not very hopeful for us, partly because we have not educated and trained our people to do the jobs that are fully competitive in a global economy and create high wages and high growth and high opportunity, partly because we haven't had an economic strategy that would generate those jobs in this country; and for the last three years because we have been reducing defense spending, as we had to. We have done it without a strategy to reinvest all the money in high technology, high growth opportunities in this country. So the defense cutbacks, which should have spawned an explosion of economic opportunity in the United States have instead aggravated our economic distress. It is clear to me that marshalling the vast scientific and engineering and technological resources of this country to the business of rebuilding America is critical to our future. In the United States today, for example, only 16 percent of our work force works in manufacturing compared to 28 percent in Japan and 32 percent in Germany. In those countries, they use technology to improve productivity and to do more work with fewer people. Ironically, for example, in spite of all the jobs we've lost in the auto manufacturing industries in America in the last 10 years, we still use more people per car. We have more labor hours per car than the Japanese do. The difference is that their auto workers went to work in other, usually more sophisticated manufacturing endeavors generating greater wealth and productivity for the country. Ours normally wandered around till their unemployment ran out and took a job at a lower skill level making less money than they used to make. It is absolutely imperative then that we have a national economic strategy which includes a technology policy that permits us to take advantage of every resource we have in this country, and especially the national treasure represented by our labs. One of the reasons I asked Senator Gore to join this ticket is because he has spent a lot of time immersing himself in issues of technology policy. And I thought that was one of three reasons that he brought a special strength to this effort. Technology policy, his background and involvement with the environment, and his understanding of arms control issues, which are still, as I'm sure all of you know here, because of the work you do, very major issues for us as we look ahead to the years of the 1990s and into the 21st century. So, having said that, it seems to me that the other point I want to make is that you have to be at the core of not only maintaining our national defense, but of finding ways to convert defense spending to domestic economic opportunity, promoting not only conversion, but dual use technologies. And to do that, I do think we need a technology policy. I release one today, as Senator Bingaman said, and I worked very hard, not only with Senator Bingaman and other leaders in Congress, but also with a lot of high tech company leaders in silicon valley and elsewhere across the country, 21 of them--more than two thirds of them Republican--endorsed my candidacy two days, in no small measure because of this commitment to a new technology policy for America. The technology policy would affect the national labs in at least two ways. First of all, we would refocus federal R&D programs on critical technologies that have either dual uses or that enhance our economic performance. Today, of the 76 billion we spend annually on R&D, 60 percent still goes to defense, 40 percent goes to commercial technologies. I would like to see it closer to 50/50, or with more emphasis on dual use technologies. Secondly, our 726 federal laboratories have a budget of 23 billion, but much of that still reflects the priorities of the Cold War. I would very much like to see federal labs which can make a significant contribution, as this one is, to our competitive position. And one of the things that I want to do is to set aside 10 to 20 percent of that funding for the kind of joint ventures that have accelerated so dramatically here in this lab in just the last year. I think it's fair to say that probably because of your historic mission, and probably because of your leadership, there's been a bigger increase in a shorter amount of time of cooperative research and development agreements here in the public and private sector than in any other lab--at least that I am familiar with. But we need to do much, much more of this. There has been a bias against it by some folks in this administration. People, for example, have recommended a 20 percent cut in the overall federal contribution for Semetech, which I think would be a terrible mistake, given the plain and evident benefits that the GAO chronicled just one month ago in its report. And what I want to do is to see us do more of that, and not only in economic issues, but also in dealing with environmental technologies, which themselves are economic issues, and with some of the national defense issues that we still much face, especially the challenges we face in trying to find ways to contain proliferation of weapons of mass destruction. At the end of the Cold War, with the demise of the Soviet Union, if with your help we can in fact figure out how to first store and then dismantle and destroy the nuclear arsenals of the former Soviet Union, the biggest threat we will face in the future is the proliferation of nuclear, biological and chemical weapons of mass destruction in the hands of dictators who obviously have very little concern for the casualties that might be inflicted on their own people. One of the little known--or it's well known, but one of the little chronicled aspects of the Gulf War which makes the future so frightening is that Saddam Hussein, without apparently a second thought, took casualties at 1,000 to one. Unparalleled ratio in the history of modern warfare, which indicates that it wouldn't take many Saddam Hussein's in the world with the capacity to use chemical, biological or nuclear weapons willing to take casualties at 1,000 to one to wreak a great deal of havoc in civilization even when the Cold War is over. So there will be things to be done in that arena which the labs will be a very important part of. What I'd like to ask you to do--besides vote for me is--what I'd like you to do is to know first of all that I understand the pivotal roll that this lab and our federal labs must play in the future, that I want to make good decisions as president, that my party historically has had a commitment to the use of technology to advance both peace and prosperity in America. Los Alamos was started under Franklin Roosevelt, this lab under Harry Truman. And I believe President Kennedy was the last president to visit a federal lab in a non-election year. And I can tell you that I will be the second if I win in 46 days. The second thing I want to say, in all candor, is that in this, as in so many other areas, I obviously do not have all the answers. And I want to urge you, all of you collectively, through your leadership and appropriate channels, to feel that you will be a full partner in the crafting of America's post- Cold War defense systems, and the revitalization of America's economy, and the solving of many of America's environmental and health care problems. We are living in a world where brain power will determine the lives of all of our people. We have these incredible resources that we have, but only scratch the surface of their potential. And I want to make sure that each of you has a chance to contribute your full potential to the welfare and to the future of your country. I will do my very best to do that if I win this election on November 3rd. Thank you very much. MODERATOR: I was told that people were going to write out questions and we were then going to address those to Governor Clinton. GOVERNOR CLINTON: If we get through them I don't mind taking a few from the audience. I believe in unstructured accountability. Q: The first question--it's somewhat already been dealt with but let me just go ahead with it--what do you see as the future role of Sandia and its sister laboratories--Los Alamos and Lawrence Livermore? Should the Department of Energy laboratories expand or shrink in size? And why? GOVERNOR CLINTON: I think they should expand in size for the reasons that I've said. First of all, we need a lot of work on what we can do on the issue of proliferation--how can we contain it. What technologies can be developed to restrain it? If we develop an international regime--an agreement among the major arms technology suppliers to constrain proliferation we still will need to know who's cheating as soon as possible and what we need to do about it. There are massive technological issues here that have to be answered. And I think that will be our major responsibility, apart from doing what we can to fulfill the agreements we now have with the former Soviet Union--those republics--to reduce their nuclear forces. Secondly, I want to have more cooperative research and development opportunities between the public laboratories-- publicly funded laboratories and the private sector--for all the reasons that I said, with a focus on dual use as well as purely commercial technologies. Thirdly, specifically, I think we need a lot of work in environmental technologies of all kinds, with which you would be as familiar as I, perhaps more so. And finally, I saw one thing over at the demonstration that I want to reemphasize. We need to do a lot of work in this country because we have a more diverse and complex nation than most other advanced countries to use technology as well as a different system to hold down health care costs and bring it down within inflation. Because I can tell you that until we are successful in getting our health costs in line with inflation it is going to be very difficult for us to increase investment at the levels we should increase it. And it's going to be very difficult for us to get our budget deficit under control. The explosion of health care costs is the number one component in the increasing federal deficit--explosion in two ways. One is the cost itself going up. The second is more and more people falling through the cracks of the private system going into Medicare and Medicaid so that the rolls of Medicaid, for example, are increasing 12 to 15 percent on average in this country this year. So anything we can do to contain that is a job well done that will free up other money for investment growth and opportunity. Q: Where do you think cuts should be made in defense spending and what would be your emphasis in defense-related research and development? GOVERNOR CLINTON: Let me first of all tell you what kind of defense I think we ought to have because I think that when we start talking about defense cuts before we talk about what kind of defense we need, I think we're putting the cart before the horse. And I have a general opposition to what I perceive to be the two major approaches to reducing the defense budget, which we have seen in the last four years. One is what might be called the predominant--not exclusively but the predominant administration approach--which is basically to downsize the defense structure we have more or less across the board, except taking more out of the Guard and Reserves and the main force. But otherwise, just make what we have smaller. The other might be called the piggy back approach that some people in my party have taken, which is the Cold War's over. Let's just see how money we can get out of the defense budget to do other things. The proper question is, what are the security threats to the United States. What are our commitments to our own fundamental interests and to our allies, and how can we best meet them? If you look at the Gulf War I think you see the two things that are best about what we do now that we need to do more of and the one problem we still have, and that would dominate my defense budget. What was best about the Gulf War? A superbly trained and motivated personnel and world class technology, by defense standards. What was the problem in the Gulf War? Mobility. We had five and a half months to settle in. We might not ever have that much time to move people and equipment and supporting material. So under my defense budget we would emphasize but very well trained and motivated force. I would have a strong component of Reserve and Guard, equally well trained and motivated and more closely integrated in the training with the regular services, because you can make someone combat ready in a Reserve or Guard role for 25 to 75 percent of the cost of the regular services. I would continue to vigorously invest in new appropriate weapons technology, like the V-22 airplane, for example and faster sealift capacity and faster airlift capacity. And I would, as compared with the administration's recommendations, leave substantially fewer troops in Europe. I don't think we need--we need some there but I don't think we need the forward positioning of 150,000 troops in Europe. And I would spend less on the space based portion of SDI. And then there are some other weapons systems I would spend less on. I don't think we need 12 carrier groups, for example. And my defense budget over five years spends 95 percent as much as the Bush recommendations--only 5 percent less, if you put it in the other way; but focuses more on training, new technology in weaponry and greater mobility of forces--because if you look at what we're facing, we're going to move people in a hurry to deal with problems, many of which we may not be able to imagine at this moment. So that's where I think the cuts should be made, as I've outlined. Q: Considering the dollars promised to programs, tax cuts and promises to reduce the national debt made by you and by Bush, the numbers don't add up. Could you please explain your position. GOVERNOR CLINTON: Yes, they do--I mean, mine do. If you don't agree, you can get a copy of my budget. We got it printed in a paperback book now; and if you don't think it adds up, you can write me a letter and we'll argue about it. If you can convince me, then I'll find someplace else to cut more. But let me say that--let me discuss the general problem, if I might. The general problem is that American productivity has been at fairly low rates for almost 20 years, and has been increasing at a much lower rate than other major countries have for nearly 20 years. For 12 years, we have tried to address that productivity problem, that growth problem, with the present theory of what we Democrats call trickle-down economics, what the Republicans call supply-side economics. But its essential outline is clear. It is basically that the government should have minimal partnerships with the private sector; that the most important ingredient in economic growth and opportunity is keeping tax rates low overall, but especially on upper-income people so that you will concentrate wealth in the hands of the enlightened and the private sector, and they will in turn invest it in ways that generate jobs and income and growth and opportunity. Now we're the only advanced country in the world that followed that theory to the extremes that we did. Mrs. Thatcher in Britain followed it to some extent, but she couldn't tolerate the deficits that we were willing to tolerate, and didn't have the options to do it. All other advanced countries, including Germany under a conservative government, followed a different theory entirely. Their theory was that the most important thing you could do to create a high-wage, high-growth economy was to have an investment strategy in which every year you increased dramatically both private and public investment; a strategy to have the best educated and trained workforce in the world and to continually reeducate and retrain them; and then to have a very sophisticated and flexible partnership between the public and the private sectors so that you were always moving technology from the laboratory to the workplace, so that you were always helping more and more small companies to get into trade, and so that your trade policy always worked to expand trade, rather than to contract it. Now that's what they did. And most of ``they''--the Japanese, the Germans and others--were governed by people who would be called Republicans if they lived in this country. So the issue is that we face now that we've got a $400 billion deficit, to go back to the question. And our debt in the last 12 years has gone from $1 trillion to $4 trillion. And both parties have to accept blame. This idea that Congress is to blame is a load of bull. For ten of the last 12 years, Congress has spent less money than the executive recommended. Now that doesn't let Congress of the hook, but I just want you to understand, there's more than enough blame to go around. In ten of the last 12 years, if the Bush or Reagan budgets had been passed, the deficit would be bigger than it is today. Then they come out at mid-term with all these alleged budget-cutting recommendations that they really don't want to stand behind. And you don't have to take my word for it. Last year, three-quarters of the Republican House members voted against the Bush budget. So what we need--and here's the problem. so we quadrupled the deficit, right? Long- term interest rates are still high. It's a real threat to our long-term economic health. But meanwhile, we are investing at far lower levels than our major competitors. So what we have to do is to find a way to bring the deficit down and to increase investment at the same time. This is not easy to do. If it were easy, we'd probably be doing it, right? So let me say there are basically four schools of thought on this, and you all have to decide where you stand. There's the present administration's policy, which is let's have one more across-the-board tax cut heavily weighted to upper- income people and see what happens. Maybe it will work this time. Keep in mind the Census says that two-thirds of the American people are working harder for lower wages than they were ten years ago--not just unemployment, but downward earnings. So that's one extreme, okay? Then there is the statement represented by the hundred economists, including the five Nobel Prize winners, who said yes, we should increase the deficit, but not by cutting taxes again, but instead by increasing investment in infrastructure and education and training, and in public works program for the hard-core unemployed to jump-start the economy. Then there is the position best identified with Ross Perot, which says the most important thing you can do is bring the debt down as quick as possible. And he offered a plan to do that which included very modest tax increases on upper-income people; steep tax increases on middle-class people, even though their tax rates have gone up for the last decade; some pretty good budget cuts unspecified in the health care area. But it did do the job. It brings the deficit down in theory to zero in four or five years. What are the problems with that? There are two. Number one, he hired a firm to analyze it, and they said the problem with that is you drive unemployment up and incomes down and have a bigger recession for the next or five years, but by the year 2000, you're in great shape. But you forego a lot of investment opportunities between now and then. The second problem is, if you drive the economy down too much, all your revenue estimates are off and you've still got a big deficit. So then there's the last position, which is the one I decided to take, which is that what we really need to do is to show our allies and the financial markets we are serious about the deficit. We need to cut it in half over the next four years. But we have to do it with a disciplined program that will increase investment. How do you that? You cut spending. You bring health costs in line with inflation. You reinvest the defense cuts in domestic economic opportunities. And you ask the upper 2 percent of the American people to have a modest tax increase because they have received--their tax rates are now $76 billion lower than they would be if 1980 tax policy prevailed. So I don't recoup anywhere near all of that, but I do ask for a modest revenue increase there. And I think that will increase the investment and reduce the deficit; and, to me, that is the soundest way to go. You think about it. If I held your funding flat here for eight years, how many opportunities would we forego that would generate economic growth, put people to work, get incomes up and bring tax dollars into the Treasury. So I think I've made the right choice, but it is a matter for honest debate--one reason I wish Mr. Bush would show up in East Lansing Tuesday so we could argue this out. Q: Let me just ask one more question. I've been a note that that's all the time that we have today. The laboratory has great potential to do non-nuclear work, but the transition is proving to be difficult, slow and somewhat demoralizing. The same difficulties are being experienced in defense-related industries. Will you provide the lab with the continued support needed, even if the transition takes years? GOVERNOR CLINTON: Absolutely. One of the things we've got to build into our thinking is long-term benefits, and we got to encourage people to try and fail. I mean, if you can't fail, you can't succeed if you're moving into uncharted waters. I feel the same way, by the way, about traditional industries. I think that we should have a transition in defense conversion which would give not only workers the opportunity to retrain but would give industries the opportunity to retool and let them carry over some of the funds for a while and try to retool. We won't make it everywhere. But this is an inexact business, you know. And so yes, I would. Let's do one more. That's a short answer. You ask complicated questions, I've got to give an answer. Q: I put away all the good ones there. GOVERNOR CLINTON: Ask me a bunch of ``yes,'' ``no'' and ``maybes''--that would be good. Q: Are you in favor of the Comprehensive Test Ban Treaty? GOVERNOR CLINTON: Yes, I'm in favor of the one that I think Congress is developing that I believe this administration will finally sign off on which would permit some testing for a few years, working toward an absolute ban, providing testing for safety in the near-term. I know there's a big dispute about this. But let me say that France has stopped testing; Russia has stopped testing. And I perceive the biggest threat in the future to be, as I've said earlier, the proliferation of nuclear technology, as well as other weapons of mass destruction, to other countries. And I think to contain that, we ought get out there and join the parade on working toward a comprehensive test ban, and then focus our energies on this proliferation issue. Q: Thank you very much.