millions of dollars creating phony ads to accuse the Democrats in Congress, who are in the minority, of doing what the Congressional Budget Office -- their own Congressional Budget Office -- says they are doing. That is, spending the Social Security surplus.
..........In fact, just yesterday, the very day they were announcing these misleading and unfair ads, their own Congressional Budget Office sent them a letter that shows they are spending $18 billion from the Social Security
surplus. Now, I can't help noting that these are the same people who told us they could spend all this money and cut taxes $792 billion, and never touch the Social Security surplus.
..........QUESTION: On the budget, if the Republicans won't give you the taxes you want, what's the alternative? Cut back on the spending you want? How do you get out of this pickle?
..........THE PRESIDENT: Well, the alternative is, just mechanically -- if they won't raise money, the alternative is you either have to say -- well, let me say what the alternative is not, first. The alternative is not their gimmicks, and then we'll come up with our gimmicks, and we'll all see who can out-gimmick someone else. That is not the alternative.
..........The alternative should be that we decide we're going to cut back on the spending for a year. Or if it's too severe -- and from what we hear out there in the country from -- and what we know about the needs of education, what we know about what we both want to do to help restore our ability to recruit in the military and help our military families with a pay increase there, what we know in a number of other areas -- if we decide
to spend this money together, if we jointly agree on it, and it won't allow us to have a divided surplus -- which, keep in mind, we want to do this year -- then both parties need to agree on that.
..........Now, I strongly prefer to go on and get out of the Social Security surplus this year. And what I proposed is not all that onerous -- I mean, dealing with -- the corporate loopholes I proposed to close, the cigarette tax and the toxic waste dump fees. That's not all that bad. You could always compromise. You could raise less and spend a little less.
..........But my point is, the most important thing is, we should be straightforward with the American people about this, and we shouldn't try to get them all tied up in knots and pretend that something is going on that isn't. We know we are going to now have, in the future years, a surplus that will -- except when we have economic downturns, but on average, a surplus that will be large enough, projected, that we can meet the future needs of education, the environment, national security out of non-Social Security revenues.
..........Now, this is a -- let me remind you all, this is a new development. When we were in the deficit spending mode all during the '80s -- all of you know this, you wrote about it a lot -- the deficits were made to seem smaller than they were because Social Security revenues were in surplus over Social Security payments. They are still in surplus over Social Security payments, but now other revenues are in surplus over other spending this year.
..........But the '97 budget caps were very tight -- they were for the teaching hospitals; they were for a lot of other things; they were when it comes to continuing to improve education, and we do need to spend some more
on national defense, as all of you know -- at least I feel that way, and the Republicans do, too, because of the problems for the military families and some modernization problems.
..........So this whole question that there is just so much agitation on and all these ads filling the airwaves, it's really about the fact that when they started looking at their budget, they couldn't get out of the Social Security funds until next year either unless they were willing to raise some money this year from the cigarette tax, from closing corporate loopholes, or the toxic waste dumps.
..........So all I'm suggesting is we need to sort of stop misleading the American people -- they need to, with their television ads -- and we need to sit down and work this out and figure out what's right for the people, make the right disciplined choices and go forward."