age, and the rest of it would be subject to

tax.

So the answer is, if you draw Social Security and you pay some tax now, you would pay some more. If you don't pay any tax now, you won't pay any more because your income is too low to be subject to it.

Student Loans

Q. Hi. My name is Greg Gilmore, and I'm a senior here at Chillicothe High School. How will the new program for college loans and community service be handled? And, to clarify, what process will students have to go through to receive the college loans?

The President. Well, we're working out the details now. But let me tell you how I want it to work, okay? And it will be pretty close to this, I think. First of all, let me tell you how it works today. You know, there is a student loan program today, and the more you borrow, the more you have to pay back in short order. And you get the money through your bank, and there's a Government guarantee.

Today, that program costs the taxpayers about $4 billion a year: $3 billion in busted loans where people don't pay back the money they owe and $1 billion in transaction fees to the bank. What I hope to be able to do is to have people borrow the money directly from the Government and pay it back at tax time so they can't beat the bill. That will save a huge amount of money. And I want to take the savings and do two things:

One is to say to young people, you must pay the money back, but you can pay the money back as a percentage of your income. So that if you make less money, you pay less, and we'll string it out over longer periods of time. So we'll never discourage anybody from being a teacher or working in some other kind of public work just because the salary is low.

The second thing we want to do is give people the option either to earn credits against this loan before they go to college, or to do community service after they get out, as teachers or police officers or in other public service. And the way I'm trying to set it up, if you borrowed the maximum amount of money we'd make available and then you worked for 2 years at roughly half pay as a

teacher or police officer, that would wipe off your obligation. And you'd pay your loan back by giving something back to your country. And so that's how it's supposed to work.

Now, that's more Government spending all right, but see, that's a direct investment in you. That's not expanding some Government program. That's putting the money direct into you. That's cutting the cost of a program and increasing investment in your fu

ture.

Youth Apprenticeship Program

from Pickley Ross Vocational Center. Since there is a critical need in this country for skilled workers, I'm excited about your youth apprenticeship program. My question is what role will public vocational education play in your youth apprenticeship program?

Q. Mr. President, I'm a student member

The President. The short answer is, a big one. The longer answer is, here's how I want to set it up. What we're trying to do at the national level is to come up with enough funds to match with local funds and to en

courage private sector people to get into an apprenticeship program which will be an have done for years. American version of what the Europeans

I've asked the Labor Secretary

[At this point, the microphone malfunctioned.]

Is that me? No. I've asked the Labor Secretary, Bob Reich, to work with the Education Department, the vocational people in the private sector, to try to set up a framework within which every State in America would be able to design a program that a person, a young man or woman could enter in high school if they wanted, and they would continue for at least 2 years after high school.

Let me tell you why we have to do that very quickly. If you look at the income charts on American earnings from, oh, let's say for the last 20 years, for the last 20 years, you see a bigger and bigger and bigger gap every year between the earnings of young people with college degrees and young people who drop out of high school or young people who had only a high school diploma. However, if you look at the earnings of young people who get at least 2 years of training after high school in a vocational institution, the commu

nity college, in the service or on the job, if it is high-quality training, a great deal of that job gap is closed and the young person, moreover, acquires the ability to continue to learn new things throughout a lifetime. The best programs are those which start in the high schools and run with some continuity for 2 years thereafter. And so there is no magic answer. We're going to have to design these sector-by-sector in the economy, and the National Government can't do it. We can just set up a framework and standards and provide some of the funds, but we're going to have to do it on a State-byState and sector-by-sector basis.

But that's what we have to do. We need to get my dream would be for 100 percent of-first of all, my dream would be no high school dropouts. And then for 100 percent of the high school graduates to have at least 2 years of some kind of very high-quality training that is approved by both education and the private sector. Some would be delivered in schools; some would be delivered in the job place.

Health Care

Q. My name is Karen Ritinger. Mr. President, once reimbursement for Medicare is reduced, what actions will be implemented to prevent health care providers from shifting costs to the private sector?

The President. Well, first of all, that is a bigger problem with Medicaid than Medicare, as you know, I'm sure. The budget that I introduced to do that, to cut down on Medicare reimbursement, is a budget that assumes we're not going to do anything else about health care. Within 100 days of my taking office, we're going to present a plan to the Congress to try to deal with the cost shifting problem.

The question she asked indicates a real understanding of the problem. If all you do is to cut what the Government pays to doctors and hospitals, if you cut it below their real costs, then the medical providers will find a way to recover their real costs from people who pay directly or through private insurance, and the insurance premiums will go up

more.

So what we have to do is to do what every other country in the world but America has

done and develop some sort of all-payer system where the reimbursement levels are pretty much the pretty much the same, and where you have real efforts to eliminate unnecessary duplication and waste and paperwork that benefit the private sector along with the public sector, and that's what we're going to do.

In other words, I just presented the best budget I could with the system we've got, but what we need is a comprehensive system which eliminates the cost shifting from the Medicare and Medicaid to the private sector and has some cost reduction mechanisms that benefit everybody.

Let me say--I don't know, there must be some people that work at the factories in town or work in other manufacturing facilities. Our program has some significant tax incentives over the next 5 years for businesses big and small to reinvest, to create jobs, and to become more productive. But the best thing we could do, better than an investment tax credit, better than the tax changes for big manufacturers, the best thing we could do is to find a way to get health costs in line with inflation and still take care of everybody in America. If you did that, you'd free up hundreds of billions of dollars to make America compete again. And so that's a very good question.

Yes, let's take one over here. We haven't taken any over here.

NAFTA

Q. Mr. President, as a member of the UAW and local union president, I'm concerned about the loss of American jobs to foreign countries. What impact will the North American Free Trade Act have on the economy and the budget deficit?

The President. The North American Free

Trade Agreement, in my opinion, will help the economy and reduce the budget deficit if, but only if, it is implemented in a way that protects us from unfair practices.

What I want to do is to get the North American Free Trade Agreement ratified, if we can also get an agreement that requires the Mexican Government and private sector to invest in environmental investments to get their environmental cost up to ours so we don't have people just running down there so they can evade all the Clean Air Act and

all those other acts in America. And I want to have some labor standards agreements that will reassure us that the Mexican Government will enforce even their own labor laws.

One of the things that-I don't know if you all remember the one of the television ads I ran in the last campaign about an American program where we were actually subsidizing companies that would move their plants overseas, and some of them went to Central America and lowered wages. They didn't raise wages down there; they went down there and lowered wages. So what we have to know is that we are actually strengthening the Mexican economy so they will buy

more.

Now, let me say this in defense of President Salinas. In the last 5 years, our trade deficit with Mexico has gone from a huge deficit to a slight surplus, and our volume has gone way up. So they bought a lot more

from us than we sold to them relative to where we were 5 or 6 years ago.

But this agreement, I'm convinced, needs some strengthening in order to avoid hurting the American work force. I do think, if you look at it over the long run, a country like ours can only get wealthier by selling more to other countries. And it's easier to sell to your neighbors than it is to people far away. And so far, Mexico has not been wealthy enough to buy a significant volume of our goods.

Let me give you an example. Our biggest trading partner by far is Canada, even though it's a tiny country. It's a big country geographically, but in terms of population they only have about 30 million people. But they buy a huge amount of our stuff, by far our biggest trading partner.

So we would be better off-one of the reasons the Japanese and the Germans have got ten so much richer so much quicker in the last 10 years is that they've been selling more stuff overseas. So I've got to try to make that a market. It's good for us over the long run, but I'm going to try to do it in a way that builds up the American manufacturing base, not tears it down.

Abortion

Q. I know the discussion so far has been centered around the economy, but personally I feel I must address a different issue. The Senate Report, 97th Congress, S. 158, concludes that, "Physicians, biologists and other scientists agree that conception marks the beginning of the life of the human being." And it goes on to say, "There's overwhelming agreement on this point in countless medical, biological, and scientific writings." The Constitution of the United States guarantees life, liberty, and the pursuit of happiness. My question for you, Mr. President, is deep down inside do you believe that life begins the right to life for the 4,400 human beings at conception? And if so, why are we denying a day and 1.6 million human beings a year in the murder of an abortion?

The President. Wait a minute. Okay. My question for you is do you believe that women who have abortions should be tried for first degree murder?

Q. Yes, I do.

The President. Good. At least you have a consistent position. He said yes. That was his answer. His answer was yes.

Then that brings me to the questionthere are two different issues here, not one. One is the biological question: Is a cell a living thing? Answer: If two cells join, in the process that begins to make a human being, are they living? Answer: No one disputes

that. That's not the issue.

The issue is a much deeper one, and one over which people have argued for a long for a long time: When does the soul enter time. One over which Christians have argued the body so that to terminate the living organism amounts to killing a person? That is the question. It is a deep, moral question over which serious Christians disagree.

I have heard you may smile with all your self-assurance, young man, but there are many Christian ministers who disagree with you. And the question is-and let me say, I honor your convictions. I worked very hard in my State to reduce the number of abortions. I don't like abortion. The question for policymakers on the issue of whether Roe v. Wade should be repealed is the question of whether we really are prepared to go all the

way and make women and their doctors criminals because we believe we know that. Now, you are. But here's the problem. In a great democratic society, you have to be very careful what you apply the criminal law to. For example, we make drugs criminal, right? And we throw a lot of people in jail, and our jails are full and they're just doubling all the time because they're so full. And 90 percent of us agree that drug use should be criminal, and we've still got the jails full. You have to be very careful when you know that there is a difference that splits the American people right down the middle.

Very few Americans believe that all abortions all the time are all right. Almost all

Americans believe that abortion should be

illegal when the children can live without the

mother's assistance, when the children can live outside the mother's womb. There is

about a 50-50 split in our country of honest conviction about whether terminating a baby in the mother's womb before the baby can live outside the mother's womb amounts to

what you say it does, which is first degree

murder.

So the reason I support Roe v. Wade and the reason I signed a bill to make abortion illegal in the third trimester is because I think that the Government of this country should not make criminal activities over which even theologians are in serious disagreement.

That's how I feel. Employment

Q. My name is Melissa Zangree. Mr. President, I'm a sophomore here at Chillicothe High School. Will there be jobs for me when I graduate college?

The President. There will be if my economic program has a chance to be put in, I think. But let me say this: The most maddening thing in the world for me as a public servant is to see people who want to work, who don't have jobs.

A year ago yesterday we celebrated the first anniversary of the first primary in our Presidential campaign in New Hampshire. And so I made a few calls there, and I was reminiscing yesterday about going into New Hampshire, a State that tripled the unemployment rate in 3 years, and listening to young people like you tell me that the worst

thing about their lives was going home at night when their parents, who had lost their jobs through no fault of their own, and they couldn't even bear to talk at the dinner table anymore.

But it is the big challenge. What is happening is all these big companies are restructuring. They're trying to be more competitive in a global economy, and they're laying people off. And small companies have to make up the difference, and a lot them can't borrow money from the bank, and there aren't markets there.

All I can tell you is I'm doing the very best I can to make sure that there will be jobs available for you. That is the issue. If we cannot maintain America's position and the American dream unless we are able to create a higher number of jobs every year. This is amazing. We're supposed to be coming out of this recession we've been in, and unemployment's higher now than it was at

the bottom of the recession. So the answer if my program is given a chance to work, it to your question is, I honestly believe that That's what I honestly believe. I believe that. will create jobs for young people like you. Taxes

Q. Welcome, Mr. President. My name is Barbara Smith, and I'm a concerned citizen. And my question is, instead of imposing an energy tax which would unequally affect consumers, why not develop a national sales tax which would be equal to all consumers, or even a national lottery, to help with the defi

cit?

The President. A lottery is a different issue. I doubt it would raise a great deal of money, and I've always been opposed to them, because lotteries tend to have an unequal effect, taking a disproportionate amount of money from lower-income people. So I've always been opposed to that.

But let's talk about the national sales tax. Almost every country that I know of that we compete with, advanced countries, all the European countries and Japan and Canada, have a national sales tax. They call it a valueadded tax. Most of them-if you go to Canada you see it on your bill-you know, they separate it out, just like the sales tax.

But most countries just put the valueadded tax into the wholesale price, and you don't even see it on your bill. And a lot of those countries like that because what they do is they tax things sold in their country. Now, what's good about that? That means that let's take, again, your plant here. If Mead Paper makes, let's say, stationery and sells 15 percent of its products overseas, those products would not be subject to the VAT tax. Or, you're in the UAW, if you make an automobile, and any automobile you sold in another country would be subject to no tax at all. Then, when another country's car came in here, it would be subject to the tax.

So a lot a people in manufacturing like this national sales tax because it helps your exports, and it puts a burden on imports coming in, supports the job base of the country. It's perfectly legal; all our other competitors

do it.

Now, here's why I didn't propose it right now. That is a radical change in the tax system of the United States. It is something I think we may well have to look at in the years ahead. But I did not want to confuse two different things: One is the imperative of getting the deficit down with the need to maybe change our tax system. I mean, there's only so much change a country can accommodate at the same time. Also, the energy tax equals about 1.5 percent of total Federal revenues, or 1.6 percent. And it will have a very modest impact on energy, and it is pretty equal throughout the regions of the country, actually.

If you take a farmer, you might argue that a farmer might pay a little more directly or indirectly because if you buy fuel it's about 2 cents a gallon. But then, if you buy fertilizer, that's got a lot of fuel in it. So the only people who will be unevenly affected are people who buy things that have a lot of fuel component.

But I thought, and by the way, we still have the lowest energy cost by far of any of our competitors, and our energy taxes are very low. If it were to put us out of compliance, I might have thought of that. But I do believe that America, at another time, and maybe not too long in the future, will debate whether we want to shift the nature of our

Q. Mr. President, my name is Cathy Dunn. My mother's monthly prescription drug costs exceeds her monthly income on retirement. What, if anything, can be done about the rising cost of drugs in this country?

The President. Well, one problem is that older people who are eligible for Medicare, but not poor enough to be on Medicaid, don't have their prescription drugs covered. So you have this ironic development that older people who have serious medical problems and require expensive medicine who are on Medicare might actually have lower incomesreal incomes-than some people on Medicaid. And it's a big gap in our health care system, and it's one that I'm going to try to see that we address now.

Let me say you may have seen on the other end of the age spectrum-I've been in somewhat of a dispute with some of the drug companies, because I want to immunize all the children in our country. But only about half of our 2-year-olds are immunized against serious diseases. That's a very serious thing. And I'm coming back to the drug problem. Let me bring you back around to this, because it's very important that you understand this. And we save $10 later for every $1 we invest now in immunizations of children for preventable diseases. And yet, a lot of vaccines made in America sell for lower prices overseas than they sell in America.

Now, if you look at the price of vaccinesfor a lot of these vaccines, the most expensive price goes to the family doctor who buys them. That's why the cost of getting your shots has gone from about, oh, $10, to over $200 if you just go to a family doctor and get all the baby's shots. Right?