Subject: Perot's Economic Plan (3/4)

From: [email-masked] (Michael Pye)
Date: Tue, 13 Oct 1992 10:57:26 GMT

AN AMERICA THAT PROSPERS (chapter 4)

"Made in the USA" can once again become the world's standard for excellence.
The United States can again become the preeminent economic power on earth.

Nothing can stop us, except ourselves.

When the Japanese planes returned to their carriers from bombing Pearl Harbor,
the fleet's second-in-command turned to Admiral Yamamoto. "You have won a
great victory, sir," he beamed. The Admiral turned away unsmiling, stared out
at the horizon, and said, "You don't understand. We have awakened a sleeping
giant."

Six months later the American fleet crushed the Japanese in history's first
great air-sea battle at Midway Island.

There is nothing to stop us from being the most productive nation on earth.
There is nothing to stop us from creating jobs that produce real wealth for
our working people. With strong leadership and involved citizens, there is
nothing to stop us from creating new industries and technologies that will
dazzle the world.

We are up against fine competitors. They know how to work. They know how to
finance their industries. They know how to produce excellent products. They
know how to use government to promote their growing economies.

Like it or not, we live in a tiny world. The international competition is
fierce. Every day somebody wins and somebody loses. In business they don't
hand out red ribbons when you lose. Instead, they hand out pink slips, close
factories, put families on welfare, and shut down entire towns.

America must be put back to work.

The next administration must move immediately to stimulate thousands and
perhaps even millions of new small businesses, to target industries of the
future where American know-how can take the lead, and to break down the
adversarial relationship between business and government that sends jobs
overseas.

                                   CREATE NEW JOBS

The vast majority of our new jobs won't come from our biggest employers. They
will come from our smallest. Americans are by nature an entrepreneurial
people. Almost everyone has an idea for a new product, a new service, a new
shop, a new kind of delivery system, a new way to make a living and maybe even
to make a fortune. We've got to do everything we can to make these dreams a
reality.

* Free up credit. The deregulation of our banks and savings and loans was
poorly thought through and poorly executed. Now we have to repair the damage.
Our small businesses are starved for credit. People with good ideas can't get
loans. The regulators came to a recent board meeting of a savings and loan to
read a message from the administration telling them to start making loans. The
board listened with utter bafflement. The day before the same regulators had
required them to tighten their capital requirements, which meant they couldn't
make any new loans. We need government officials who understand credit and
take the lead in restructuring our credit markets to give access to small
businesses so they can invest for growth.

* Stimulate investment. We can establish incentives through the tax code and
in other ways to stimulate the creation of capital pools for small business
where the risk is spread out and thereby reduced. Most new businesses are
founded on less than a $100,000 investment.

* No capital gains tax for small business investment. We should eliminate any
tax on gains made for investment in starting small businesses. This is the
quickest and surest way to convince investors to take the risk of backing
entrepreneurial ventures.

* Establish mentor programs. Small businesses fail for two reasons: lack of
money and lack of experience. We have a huge resource in our talented retired
people. Our retirees are younger and more fit than at any other time in our
history. Let's put them to work. Programs are already in place that
demonstrate how effective retired executives can be in mentoring young
companies.

Today very talented college graduates can't get jobs. Well-trained and highly
disciplined military personnel coming out of the armed services don't have
jobs. These people know how to organize. They know how to execute. We need to
stimulate the private sector to provide them with mentors, capital, and
credit. They will create jobs.

                              TARGET GROWTH INDUSTRIES

We cannot afford to keep this nation organized to fight the Cold War. We no
longer have an enemy. Today we're engaged in a new war for economic survival.
We have competitors. We are not threatened with nuclear destruction. We are
threatened with economic decline. To a family that just lost its house because
it couldn't pay the mortgage, to the single mother who just went on
unemployment because she lost her job, to the father who just realized he
won't be able to pay his children's tuition for college, this war is real and
personal.

We put the entire resources of our nation behind winning the Cold War. We
built an interstate highway system because we needed to be able to quickly
transport military material and personnel across this continent. We paid for
the finest aerodynamic engineering and design because we wanted to dominate
the skies. We created NASA because we wanted the quickest and most accurate
intelligence on our enemies.

Look at the byproducts of the public investments we made in our national
security: good transportation routes for commerce, the world's leading
aerospace industry, and the satellite communications industry. Where would we
be without them?

Where will we be in twenty years if we don't continue to make important public
investments?

The Japanese learned from our Pentagon, applied the lesson to business, and
proceeded to beat us at our own game. The Japanese ministry of international
trade and industry targets industries of the future ten years in advance and
then applies prudent incentives to the marketplace to make sure those
industries are nurtured and grow. Don't tell me that the Japanese are
different: homogeneous, regimented, willing to follow orders. We've been doing
the same thing they're doing for forty years but only in defense policy.

Some academics say this is a violation of the free market. Don't they realize
that the biogenetics industry is the result of our federally funded research
universities and the National Institutes of Health?

I am an advocate of fair, free trade. To keep the free market dynamic and our
nation competitive, new industries sometimes need to be fertilized and
incubated. If our competitors are looking ten years ahead, we must look
fifteen years ahead and beat them.

Instead of continuing to lose whole industries, we must fight to be
competitive in every arena of the future. Take a look at your VCR, or your
television, or even your telephone. They weren't manufactured here. They may
have American names on them, but they were made overseas. We have allowed
entire industries to vanish. Our loss is another nation's gain.

We can be winners. We can target and stimulate new industries, applications,
and inventions that have not even been conceived of yet. We can nurture them,
and we can back them against competition. We can put all our muscle behind
industries that produce jobs and a higher standard of living for all
Americans.

               PUT GOVERNMENT ON THE SIDE OF JOBS AND GROWTH

We have an adversarial relationship between government and business. This has
got to stop. We need to put government on the side of investment, new
industries, and better jobs.

One example of government getting in the way is the Sherman Anti-Trust Act. It
was passed in 1890 when we were concerned that our large companies were
getting so big they would dominate the market.

Over a hundred years later, isn't it time to face up to the fact that the
world has changed? We're no longer competing against each other. We're
competing against other countries. Don't worry about our businesses getting
too big; worry about our businesses getting too small. Nobody needs to be
frightened about General Motors taking over the automotive industry. We've got
to be concerned about General Motors succeeding in the automotive industry.
It's time for Congress to wake up to the new realities and stop clinging to
the ideas of the past. We urgently need substantial revision of laws that
impede our ability to compete.

We can't have employees without employers. We need to relieve the immense
burden of paperwork we have placed on small businesses. Anybody with under one
hundred employees should only have to fill out a one-page form once a year.
That's for Social Security, unemployment compensation, health insurance,
safety regulations, and compliance with civil rights legislation. We've turned
our small businessmen into bureaucrats. We have more than enough bureaucrats
already. We must free our small business people to improve their products, to
perfect their services, and to be successful so that they can grow and hire
more people.

We can depend on the ingenuity and hard work of our people. Americans know how
to get the job done. Government's role should be to support business: creating
jobs and creating taxpayers.

Once we make these changes, nothing can hold America back from becoming the
leading economic superpower on earth.

                              ENCOURAGE SAVINGS

I talk to people in all walks of life. I sense this current recession has had
one good effect. "Let the good times roll" will definitely not replace "In God
We Trust" as our national slogan. For a while I was worried.

Nobody believes any longer that their home equity values will rise
indefinitely, giving them a tidy nest egg for retirement. In fact, in this
recession many home values have declined. Many people have seen their down
payments eaten away. Nobody believes that their paychecks will increase ahead
of inflation every year. Most feel fortunate to have a paycheck at all.
Everyone knows someone who is unemployed. Nobody in the baby boom generation
that I've met believes any longer that he or she will be able to count on
Social Security being solvent twenty-five or thirty years from now when it's
time for their retirement. Many believe they will have to provide for
themselves.

This is not happy news, but we can turn it to good use. We can declare as a
people that our national spending spree is over. Now we can redirect our
energy to building our savings.

We need to replenish our national savings pool so that we have capital to
invest. We're saving at a rate of 4 percent compared to the Japanese at 18
percent and the Germans at 10 percent. This is not just dry economic theory.
Capital is the very lifeblood of the capitalist system. Capitalism simply
can't operate without capital. Our economic engine needs capital, and it needs
it now.

We need it for two good reasons.

First, our companies now pay a higher cost for money than companies in Japan
and Germany. It's tough to compete when your interest payments are higher than
your competitors. He can put that extra money into the productyou can't. By
increasing our savings, we reduce the cost of investment.

Second, we are borrowing foreign money. Foreign money kept us afloat during
the lg80s. That money can leave just as easily as it came. Look at Germany as
a case in point. The absorption of East Germany into West Germany's economic
bloodstream will cost billions. Germany's excess cash is no longer available
to invest in America.

We need to take steps to reinstill the ethic of saving among the American
people. I sense the people are ready for it. When this recession ends, I don't
believe we'll go back to spending every nickel we earn.

We need to press immediately for pro-savings incentives on all fronts. This
problem has been studied and restudied. There are hundreds of good ideas for
increasing individual retirement accounts, creating college tuition funds and
home equity pools, allowing tax-free personal savings accounts, and offering
other solutions to the problem of enlarging our capital base. It is not the
world's most difficult task to sift through these ideas, calculate the
benefits versus the costs, open up the results to a national debate, and then
enact a package of actions to reverse the present trend.

We should do more than that. The Secretary of Education should create a
program whereby our children can participate in this great national endeavor.
We need to reinstill these values in our culture. Children in America
contributed to the Liberty Bonds during World War II. Our children today need
to know how important savings are. Our goal should be to ingrain in the next
generation the lesson that was temporarily lost in the present one.

Once again, we cannot afford four more years of talk and buck passing. The
committees have already met. The studies have already been done. Meanwhile,
we're losing industries and jobs by the day.

The American people are ready to act. They need a Congress and a President
willing to lead.

                         ENCOURAGE PRIVATE INVESTMENT

We're not investing in our future. From 1980 to 1989 Japan had an investment
rate of 16 percent of gross domestic product. Ours was 4.5 percent. Who is
going to win the race?

I grew up in a farming community. Time and time again we were told stories
about the farmer so down on his luck that he had to eat his seed corn instead
of planting it. Today our companies are eating their seed corn. They ought to
be planting it. We can change the incentives to make them want to plant
instead of consume.

Once again, there's no reason to sit on our hands and stare at the ceiling.
The policies have already been proposed that can reverse our slide and get the
economy moving for the long term.

* Investment tax credits. We can stimulate growth by providing tax credits to
companies that buy productive equipment and machinery.

* Research and development tax credits. We need to encourage our companies to
put their money into new improvements, new products, and new lines of
products.

* Tax breaks for long-term capital gains. My Republican friends are wrong to
think this is the magic cure-all for what ails us. My Democratic friends are
wrong to think this is just a present to the rich. If we want our corporate
executives to think long-term we have to make their investors think long-term.
If shareholders aren't squawking for a short-term gain, the company can
concentrate on improving its product so it can survive, compete, and grow. We
need a stair-stepped capital gains tax, decreasing each year over five years,
on shares purchased from public companies with the money going into the
treasury to build the company. This would provide the proper incentives to
industry and to the market.

                           INVESTMENTS AS A PERCENT OF GDP
                                   1980 TO 1989
        
                                                              16%
16.0% +                                                 ***************
      |                                                 ***************
14.0% +                                                 ***************
      |                                                 ***************
12.0% +                                                 ***************
      |                                                 ***************
10.0% +                                                 ***************
      |                                 8%              ***************
 8.0% +                           ***************       ***************
      |                           ***************       ***************
 6.0% +                           ***************       ***************
      |          4.5%             ***************       ***************
 4.0% +     ***************       ***************       ***************
      |     ***************       ***************       ***************
 2.0% +     ***************       ***************       ***************
      |     ***************       ***************       ***************
 0.0% |_______________________________________________________________________
             United States            Germany                Japan

                      ENCOURAGE ENVIRONMENTAL PROTECTION

This planet is our home. If we destroy the planet, we've destroyed our home.

America has always valued its wealth of natural resources, next to its people,
as its most important asset. When we pollute our air and contaminate our
water, waste our energy resources, and destroy our wilderness and wildlife, we
squander our national wealth.

When we think about how to use our natural resources, we have to think ahead
one hundred years, not just two, five or ten years. We can hand over to our
children the world's most dynamic economy and the planet's most beautiful
environment.

The principles that should guide us will accomplish protection for our
environment while stimulating the growth of our economy.

* Conservation makes basic economic sense. Pollution equals waste. A
competitive economy depends on a clean environment. Preventing pollution
before it happens is cheaper than cleaning it up afterwards. Recycling and
conservation are morally and economically sound policies.

* We should support business strategies for sustainable economic development
and assist local communities in making the transition away from dying
industries.

* Businesses which depend upon the purchase of publicly owned resources at
below-market prices offer the illusion of prosperity, not the reality. Stop
subsidizing inefficient, environmentally destructive activities in the mining
and timber industries that promote private gain at public expense.

* Over-regulation only fouls things up. Our mission is to clean things up. We
spend over $100 billion a year to comply with environmental regulations. We
should support incentives over regulations to achieve environmental goals.
Give people and businesses an incentive to do things the right way in the
first place, and they will.

* We need to take the lead in defining the future of global economic
development. It is in our best interests to help countries that seek to
stabilize their population growth to decrease poverty.

* American companies should be at the forefront of emerging global markets for
environmental technology. In 1980, more than 60 percent of the pollution
control equipment used in the United States was domestically produced. In
1990, the figure was less than 35 percent.

* We should invest in research. On too many environmental questions we don't
even have agreement about the scientific facts. We can't operate in the dark.
We certainly can't afford to create solutions to problems that may not exist.
We need to get the facts straight. We don't need to create false choices. We
can't afford a debate that doesn't need to take place.

A strong, considered environmental strategy based on these principles can
create growth and jobs, not retard them.

                        CREATE A LONG-TERM ENERGY POLICY

A fundamental part of our approach to the environment is a consistent,
long-term energy policy. We recently fought a war that cost precious human
lives. It might have been avoided if we were not so dependent on foreign oil.
We have ignored our wasteful use of energy sources and the related foreign
dependency for far too long. Like so many of our problems, our energy problems
call for leadership with an eye to the future.

Let's start with cutting down on imports. We import 40 percent of our energy
requirements. One-third of our imports come from Persian Gulf countries and
other members of OPEC. We should increase motor fuel taxes which will help
reduce this dependency and give us money to create jobs.

We can do more. We need a national policy that conserves fuel through
education, research, regulations, and market incentives.

At the same time, we should strive for better balance in the use of the
various energy resources available to us, including natural gas, nuclear
power, and coal. We should reexamine the heavy regulation of the natural gas
industry. It is likely that nuclear power will be a major source of the
world's energy in the next century. We should take the lead in developing a
safe standard modular reactor and expand our research and education regarding
waste disposal.

Coal is our largest single domestic source of energy, and we have more than a
two-hundred-year supply at current consumption levels. We should increase
research and development efforts to obtain clean-coal technologies. They will
be of value to us and to other countries. As good global citizens we should
lead the way in finding ways for other countries to grow while preserving the
environment.

Finally, there are many alternative, renewable energy sources: solar,
hydroelectric, wind, biomass, and geothermal. In most cases the cost of them
is now too high to allow much use. That may not always be true. Unfortunately,
the government has wasted a good deal of money promoting these sources
unrealistically in expensive programs like the synthetic fuels corporation.
Nevertheless, we should continue to encourage ;he future low-cost production
of these sources with modest research and development programs.

With all of these efforts we will have a stronger, more productive America.

                             "ACTION THIS DAY!"

At England's darkest hour, Winston Churchill rallied his people with stirring
words, and he offered much more than just the words. He gave them leadership,
decisiveness, and a sense of urgency. On memo after memo now preserved in the
archives from the war ;ears, are Churchill's scribbled words "Action this
day!''

Churchill successfully instilled in his commanders and ministers the idea that
when survival is at stake, any action worth taking is worth taking now.

We need this same lesson in our country. We need it instilled in our
government, in the Congress, in our industries, and among our people. Stop
bickering. Stop blaming each other. Stop posturing for partisan advantage.
Stop dodging the hard decisions. 

There is work to do.

                      AN AMERICA THAT WORKS (chapter five)

The American dream.

Those three short, simple words encompass the hopes and aspirations of all the
peoples on earth. The words are not only short and simple. They are also
fragile.

A dream denied can shrivel and die like a raisin in the sun. The President and
Congress don't need to look very far to see that the American dream has
deteriorated for many people. They only need to look out their windows in
Washington, D.C. Here is our nation's capital, with its monuments and parks,
its statues and museums. It should represent everything that we are as a
people. Instead it represents neglect, incompetence, and shame.

Washington i6 the murder capital of the nation. By the time its children reach
the fifth and sixth grades, 31 percent of them have witnessed a shooting, 43
percent have witnessed a mugging, 67 percent have witnessed a drug deal, and
76 percent have witnessed an arrest. These are fifth- and sixth-graders!

Have we lost our sense of decency? Have we lost our ability to be outraged?
Have we given up on the children of our cities?

After all, we created the quagmire we now expect these children to grow up in.
We need to face the fact that 72 percent of black children born between 1967
and 1969 have been dependent on welfare for some portion of their young lives.
A young male in Bangladesh has a better chance of reaching age 55 than a young
male in Harlem.

Go to London, Paris, or Rome. These cities have existed for centuries upon
centuries. They are bustling and alive, clean and well-maintained. They, too,
have their share of the urban poor. Now revisit the cities we know so well:
New York, Philadelphia, Detroit, Los Angeles, or most of our other major
cities. These are relatively new, but parts of them are dirty, rundown,
littered with abandoned buildings, and ravaged with drugs, crime, and
violence.

In my church on the Sunday nearest the Fourth of July we sing "America the
Beautiful." Every year I am struck by that one verse: "Her alabaster cities
gleam, undimmed by human tears."

Why shouldn't our cities gleam?

Why shouldn't our children be untouched by human tears?

I believe in the American dream. I've experienced it. I know it not as some
faraway ideal but as a living, breathing reality. It exists. It is real. It
can happen. It takes work and faith and perseverance and caring. It can never
be a gift bestowed by government.

The federal government has tried program after program, and our cities have
gotten worse. Instead of figuring out how to develop a solution that works, we
assumed that simply spending money would make the problems go away.

For example, we spent billions on urban renewal and model cities programs, but
our cities weren't renewed and they're certainly not models.

Neglect doesn't work either.

I believe that most of our people want to share in the American dream. We must
put a ladder down to reach them so they can climb out of the mire we've put
them in. After so many years it's not surprising if people don't know what a
ladder looks like or where it leads. We should reach out to give them a lift
to the first rung. We should reawaken in them the dream of what they can
achieve if they try to make it up that ladder one step at a time. After that,
the climbing is up to them. Soon it will be their turn to reach down and lend
a hand. That's the way America is supposed to work.

                              REFORM EDUCATION

Failing schools and shoddy performance are undermining our nation's ability to
compete and our children's expectations for the future.

If this were only a problem in our inner cities, we could concentrate our
attention there. It's not. Even our richest suburban schools and our private
schools are failing to produce results that measure up on a global scale. The
top 1 percent of American students are matched by the top 50 percent of
Japanese students. In a recent math competition, the top 1 percent of American
students scored the lowest of the top 1 percent of any other participating
nation. Bankrupt, exhausted, and struggling, Russia has five million young
people studying calculus. The United States has only 500,000. Russia may be
bankrupt, but it's planting seeds for the future. When harvest time comes, it
will reap the benefit.

We lead the world in only one educational category. We spend more per public
school student than any other nation.

I've been personally involved in education for years. I know the territory. In
1983, the governor of Texas asked me to head a committee to overhaul the Texas
public school system to improve results. Against fierce opposition from
entrenched interests, we were able to make considerable headway. I know it can
be done.

From the perspective of those years spent on the front lines, I see the major
causes of our educational failure to be these:

* We don't have good preschool training.

* Parents aren't thought of as consumers.

* Schools are bogged down by bureaucracy.

* We don't have national standards. We don't hold local schools accountable
  for their product.

* We don't reward students and teachers for success.

* We haven't made learning the first priority.

* Our schools aren't organized to meet society's needs.

Don't tell me that money is at the root of the problem because it isn't. We
spend billions a year on education. More money poured into the same system
will only produce the same results.

We can't expect overnight success. We can start with steps that will turn into
strides if we pursue excellence with dedication and hard work.

Today there are programs that have proven successful in regions all over the
country. There are new pilot programs just starting up. Washington's role
should be to establish the means of measuring results and to encourage the
spread of successful programs throughout the country. Washington should show
local districts how to reallocate tax money away from things that don't work
to things that do. The President must use his "bully pulpit" to press again
and again for change. Here are the specific steps I recommend:

1. Establish comprehensive preschool programs. Countless studies have proven
that $1 spent on preschool programs will save at least $5 down the line.
Thousands of children enter first grade without the necessary learning and
social skills needed to succeed. I've seen firsthand how early intervention
and development centers can change children from even our most bleak and
blighted neighborhoods. I've seen a little four-year-old girl sitting on the
wooden steps of a tiny house in a poor area playing the violin with the whole
neighborhood gathered around, filled with admiration and pride. She went to a
special school. It changed her life. The logo of that school was a thumbprint.
The message of that thumbprint, taught to those children every day, is that
each person is unique and special, that every person has talents, that if you
believe you are somebody you will become somebody. Our children need more than
a "head start." Our children need and deserve a "running start."

2. Spend Federal dollars to spread programs that work. The Department of
Education currently spends $148 million on "Research, Statistics and
Assessment." Most of these studies end up in the files. We don't need more
studies. In the small towns and local school districts across America, there
are many success stories. We should reallocate the research money to spread
the word and to encourage implementation of these successful programs. Let's
stop trying to re-invent the wheel.

3. Empower parents. Our system is upside down. The producerseducators,
experts, administrators, bureaucratshave all the power. The
customersparentshave very little power. Let's turn the system rightside up.
The producers are better organized, as I know from my own experience.
Successful producers listen to their customers. We should start by giving
middle class and poor parents the same option that wealthy parents have:
choice. We should encourage all school districts to allow parents to choose
which school within that district their child will attend. This move alone
will put pressure on districts to provide equitable choices, with ready access
to all. We should also act to remove any federal obstacles to states allowing
choice among public, private, and parochial schools. We won't know if this
will work until several states try it on a pilot basis. The time to debate is
after the results are in. Washington doesn't have the answers. That's been
proved beyond debate. Parents may not have the answers, but they are as close
to the problem as anyone will ever get. Nobody else has more reason to care.
They should be empowered as consumers to achieve excellence for their
children.

4. Restore local autonomy with accountability. Our federal government, our
states, and even larger urban school districts hamstring our local schools
with bureaucratic orders from on high. Our most successful schools hold one
thing in common. They have a determined principal who is an academic leader
and who takes pride in the achievements of the students. We can neither bind
our principals with regulations nor allow incompetent principals to stay on
the job.

5. Establish national standards and measure results. We'll never fix this
system until parents, as consumers, can plainly see how schools measure up
against one another and against the world competition. This information is
practically impossible to obtain today. Parents should be able to know how
their elementary school performs against the nation's and the world's.
Employers need to know how their local school districts perform against others
in their state. Principals and teachers need to see where they are succeeding
and where they need to concentrate their resources for improvement. Right now
we have a $185billion enterprise operating essentially in the dark. We
shouldn't be surprised that it doesn't work. We need to haul it out into the
light of day, measure results, student by student, in a thorough, fair way and
publish the results school by school for everyone to see.

6. Make learning the first priority. When I first studied the Texas
educational system, I was surprised to discover how little time in each school
day is actually devoted to learning. Junior high and high school students do
not need baby-sitters. They do not go to school to play. These are young
adults, and they go to school to learn. We all want our children to be
well-rounded and sociable and involved in activities. However, the public is
paying for first things first, and the first thing it is paying for is
education. Extracurricular activities should take place at the end of a full
day of learning. Participation should be allowed only for those students who
have demonstrated their willingness to accomplish their academic goals.

7. Treat teachers as respected professionals. Good teachers are the heart of
our drive for excellence. They should be rewarded with better pay and with
community recognition. Their professionalism should be underscored by holding
them to standards as rigorous as their counterparts in law or medicine. We
should also broaden the available pool of excellent teachers by reexamining
the certification process that often acts more as an obstacle to excellence
than as a standard of excellence. College professors, business and legal
professionals, and military professionals should be encouraged to teach. We
have thousands of non-commissioned and commissioned officers who will reenter
the civilian job market as the defense budget decreases. These are experts in
the single most successful educational enterprise on earththe United States
military. We should put them to work where we need them the most, in our inner
city schools.

8. Make better use of school buildings. We have a vast infrastructure that too
often goes unused during part of the day and part of the year. We could use
these buildings before and after hours for day-care, routine medical clinics,
adult literacy teaching, and other purposes. School districts should be
encouraged to stretch their school year and keep the buildings in use. We
should draw adults into the learning center of the community's children and
try to cultivate shared values by bringing people together.

Right now our federal government continues blindly down the path we put it on
a generation ago. That path leads nowhere. We need to change direction. We
need to be more concerned with outcomes and results than with maintaining a
status quo that has clearly failed. This is the first rung on the ladder to
the American dream, and we need to plant each child's foot firmly in place to
begin the climb.

                       IMPROVE LIFE IN OUR INNER CITIES

Our cities cannot be allowed to die. They are the sinew and muscle of our
industrial base. They are filled with people who could add to the productive
wealth of our nation.

The key issue in our cities is jobs. A robust and expanding national economy
could do more to improve the well-being of our cities than all the handouts
ever conceived of. By expanding the economy and by focusing on job creation in
our cities, we can turn tax-users into tax-payers. This would build dignity
and self-esteem,  save the rest of us money, and increase our overall economic
strength.

Many of the past programs to aid the cities have fallen victim to the
pork-barrel mentality. For example, the original model cities program was
meant for only ten to fifteen of our urban centers. By the time it got through
Congress it was spread across 160 and diluted to the point of uselessness. The
recent bill resulting from the Los Angeles riots found itself held hostage
until rural areas received a portion of the money for their own development.
The Congressional leadership should show some by keeping Congress focused on
attacking our problems, not on trying to make everyone happy.

The way to change our cities is to change the incentives. When the proper
incentives are in place, the people themselves take matters into their own
hands.

That's why I strongly support enterprise zones, with demonstrable, real-world
incentives to induce companies to create jobs in our inner cities. The recent
package passed by Congress is a watered-down version of what we really need.
Congress seems to be afraid that somewhere, somehow, somebody will make money.
A strong enterprise-zone package won't encourage big businesses to evade taxes
by moving into depressed areas. Big businesses would never take the risk. The
right package will encourage the people themselves in those areas to start
their own businesses. That's where the jobs will come from.

We have millions of people struggling to get off welfare. We need income
incentives to enable people who work, even minimally, to see immediate
positive results in their monthly income. Right now we punish people who take
on jobs or try to save. That's wrong.

We need to restore pride and a sense of community. The experimental programs
already in place to allow residents in public housing to buy the homes they
live in have worked, but once again the incentives aren't there to make them
work as well as they could. The new owners don't even have the right to sell
their newly fixed-up homes to any seller. They have to sell it back to the
government. Sometimes you wonder if the people who write these laws know
anything about human nature. We ought to want to motivate people to assume the
pride of ownership that will make these communities function again.

Most of our federal employees today are focused on rules and regulations. What
good are the rules if the results are what we've seen so far? Throw out all
but the most essential rules. Give the elected leadership in our cities and
states the tools to do the job, and use the federal government to instigate,
prod, and encourage good results throughout the nation.

                           REDUCE CRIME AND DRUG USE

We've been fighting phony wars on crime and drugs. If this were a real war,
the enemy could comfortably declare victory. Between 1981 and 1990, the
violent crime rate increased 23 percent, the forcible rape rate increased 14
percent, and the aggravated assault rate outpaced all other crimes, rising an
astonishing 46 percent. This was during a Republican administration.
Republicans like to think of themselves as being tough on crime. If this is
tough, I'd hate to see soft. Meanwhile, the Democrats don't have any new ideas
either. Maybe it's too unpleasant for them.

In 1990, one murder was committed in the United States every 22 minutes, an
all-time high.

Crime is often linked with drugs. More than half the people arrested in our
major cities tested positive for one or more illicit drugs.

In 1991, more than one million Americans used crack cocaine or heroin for the
first time.

The result? Our people are afraid to go out at night in their own
neighborhoods. We're not talking about traveling across town. We're talking
about walking the dog. Millions of innocent people have wrongfully been put in
jail. They've had to put bars on their windows, multiple locks on their doors,
and security alarms everywhere. They've had to turn their houses into prisons
while criminals rule the streets.

Crime and drugs cost our country millions of dollars in lost productivity,
larger prisons, clogged courts, overworked law enforcement, strained medical
and health facilities and personnel, and the terrible social costs of
destroyed families and individuals.

We watch on television the awful images of a place like Sarajevo, and our
hearts go out to those people. Many of our own cities and towns are
mini-Sarajevos every night of the week. We cannot offer hope and succor to the
rest of the world if we cannot bring hope and relief to our own crime-ridden
streets.

Drugs are the source of many of our rising crime statistics. The drug problem
at its core is a reflection of our social decay, resulting from the
dissolution of the family structure, lack of economic opportunity, and the
decline of individual responsibility. We can't restore virtue by the snap of
the fingers. That's no reason not to assert strongly the basic moral precepts
by which any decent society lives and by which healthy men and women are
raised.

As this message is repeated, especially in our schools, programs must be put
in place to help drug addicts escape from the pit they've dug for themselves.
Specifically, treatment must be available so that when an addict is ready to
confront his or her affliction, help is ready at that moment. Right now more
than five million Americans are awaiting drug treatment, including 400,000
teenagers and 100,000 pregnant women. We can only handle 32 percent of the
load. The rest are left to fall even deeper into the pit.

Almost 80 percent of prisoners released from state facilities end up back in
prison. Our prisons are so overloaded that the majority who commit major
crimes serve only one-third of their sentences. This is a terrible fact. One
thing that might help is to require mandatory drug testing and counseling for
prisoners, parolees and probationers, with automatic penalties for those who
fail to stay off drugs.

While lowering demand, we also have to reduce supply. Having 19 different
federal agencies and over 40 different programs only leads to duplication of
effort, turf battles, and bureaucratic paralysis. To be effective, the federal
drug Czar should have administrative and budgetary responsibility for all our
drug control programs, including the coordination of our efforts with other
governments.

We've allowed drug and crime syndicates to lure many of our young people into
selling drugs. The money's good, but the life expectancy isn't. We need to
disrupt the marketing chain and salvage these young people.

We should take these steps:

* Apply all appropriate statutes to prosecute gangs and ask the nation's
prosecutors and U.S. attorneys what further legal tools they need.

* Mandate life sentences without parole to persons convicted of three violent
crimes, no matter at what age those crimes were committed.

* Make literacy and a marketable skill a precondition for release from prison
for criminals convicted of violent crime.

* Make federal facilities, especially former military bases, available to
states to establish rehabilitation centers for youths convicted on drug or
violent crime charges.

* Try joint public/private experiments in diverting gang members from criminal
enterprises to legal profit-making enterprises.

The primary responsibility for law enforcement rests with our state and local
governments. So far they have borne the brunt of a losing battle. The federal
government can provide active leadership, establish a national strategy, act
as the coordinating arm for local governments, and provide financial
assistance to help communities plagued by drugs and violence.

We have to face the facts. We are 5 percent of the world's population, and we
consume about 50 percent of the world's drugs. We cannot survive if that one
statistic holds up much longer. If the measures I've recommended above don't
work, let's try new ones. If those don't work, try new ones. Admit mistakes,
own up to failure. The American people are tired of a government that tries to
hide the facts and paint a rosy picture. We know how tough this plague is to
eradicate. We want a government that confronts it day after day, that spells
out its failures, and that opens its successes to public debate. That's the
only way we'll ever reach the day when a President can stand before the people
and honestly say, "We've found the solutions. We're putting them to work right
now."

                    MAKE OUR HEALTH CARE THE BEST IN THE WORLD

We spend more than anybody else in the world on health care, as the
accompanying graph shows. We have 37 million people who aren't covered at all.
We rank 15th in life expectancy and 22nd in infant mortality. We're paying top
dollar for a front-row box seat, and we're not even getting a bad show from
the bleachers.

That's the bad news. The good news is with the money we're spending now we can
have the finest, most modern, and most comprehensive health care in the world.

We've been talking about health-care reform since Truman was President. The
reason we're talking about it now is because of the ballooning costs.
Health-care costs have grown at twice our economic growth rate. They are the
fastest growing part of the federal budget except for interest payments on the
deficit. Our companies are forced to divert money from jobs, higher wages, and
research and development because of skyrocketing health and insurance costs.

                         HEALTH CARE SPENDING AS A PERCENT OF GNP
                                        IN 1990

               |       .       .       .       .       .       .       .
               |**************************************************     .
 United States |**************************************************     .
               |**************************************************     .
               |       .       .       .       .       .       .       .
               |       .       .       .       .       .       .       .
               |**********************************     .       .       .
        Canada |**********************************     .       .       .
               |**********************************     .       .       .
               |       .       .       .       .       .       .       .
               |       .       .       .       .       .       .       .
               |**********************************     .       .       .
        France |**********************************     .       .       .
               |**********************************     .       .       .
               |       .       .       .       .       .       .       .
               |       .       .       .       .       .       .       .
               |********************************       .       .       .
       Germany |********************************       .       .       .
               |********************************       .       .       .
               |       .       .       .       .       .       .       .
               |       .       .       .       .       .       .       .
               |*****************************  .       .       .       .
         Italy |*****************************  .       .       .       .
               |*****************************  .       .       .       .
               |       .       .       .       .       .       .       .
               |       .       .       .       .       .       .       .
               |**************************     .       .       .       .
         Japan |**************************     .       .       .       .
               |**************************     .       .       .       .
               |       .       .       .       .       .       .       .
               |       .       .       .       .       .       .       .
               |*************************      .       .       .       .
United Kingdom |*************************      .       .       .       .
               |*************************      .       .       .       .
               |       .       .       .       .       .       .       .
               |-------+-------+-------+-------+-------+-------+-------+
              0.0%    2.0%    4.0%    6.0%    8.0%   10.0%   12.0%   14.0%

The need to act has been given a new and terrible urgency by the deadly AIDS
epidemic that has already taken such a tragic toll. This plague must be
attacked at every level: education, prevention, and accelerated research.

The problem with our health-care system is that it was jerryrigged over many
years with a patchwork of different objectives, conflicting demands, colliding
interests, and confused incentives. It's not that the programs are bad in
themselves. Some, like Medicare and Medicaid, have done an enormous amount of
good. The problem is structural. Health care needs to be reformed.

The political arena is the last place to expect a rational system to be
developed. The political system, after all, is ingeniously constructed to
allow different groups to push their own interests in the hope that the
compromises that result will benefit the whole nation. That has worked fine in
some areas. It hasn't worked in reforming a public/private relationship as
loaded with pitfalls and potential profit as our health-care system.

I suggest that we should adopt both short-term and long-term strategies. In
the short term, a cost containment and prevention program should be developed
immediately. Various health-care experts and representatives of affected
groups should have a series of work sessions with government officials. A plan
should be put into effect as quickly as possible.

In the longer term, comprehensive national healthcare reform based on a
public-private partnership should involve the following:

* Establishing a national health board as an independent federal agency to
oversee cost containment and comprehensive health-care reform efforts

* Setting a national health policy

* Encouraging problem solving by everyone involved

* Reaching a consensus on a set of principles for reform

* Determining a basic benefit package for universal coverage and appropriate
tax treatment of health benefits

* Asking states to submit comprehensive healthcare reform proposals that meet
agreed-upon principles and cost-containment targets

* Changing federal rules to allow states the necessary flexibility to conduct
pilot programs.

One important thing should be kept in mind. Preventive action works. An ounce
of prevention is worth a pound of cure." One dollar spent on prenatal care
saves more than three dollars of special care for the newborn. One dollar of
inexpensive immunizations saves ten dollars of health care and other costs.

It is only a failure of leadership that has kept us from solving this problem.
As the problems and dollars mount and our national leaders do nothing, we
begin to give in to the notion that nothing can be done. That's baloney. Our
health care and medical professionals are the best in the world.

We have the talent. We have the money. We probably even have most of the
answers. There are several good plans on paper. We lack leadership. Again, we
need "Action this day."

                       KEEP OUR FAMILIES STRONG AND WORKING

The family is the fundamental unit of society. We have to recognize the
changes that have occurred in the American family if we are to deal
effectively with many of the problems that confront us. We can't just bury our
heads in the sand, call ourselves "pro-family," and then pretend that women
and families have the same needs they did twenty or thirty years ago. More
women are in the workforce today than ever before. Many of these women are
mothers. Over half these mothers return to the workplace before their child's
first birthday.

One of the keys to preservation of the family unit is job security. If we
strengthen our economy, we lessen the pressures of unemployment and low
incomes that so often tear families apart. Another key is changing our welfare
structure to encourage families to stay together.

When families are torn apart, we must insist that both parents continue to
meet their responsibilities to the children. Many children are on public
assistance because a parent has refused to pay child support. Congress should
pass legislation to make it a felony to cross state lines for the purpose of
evading court-ordered child support. We should change the tax code to require
parents to report their child-support obligations on their tax-withholding
forms. We should also keep a national database on deadbeat parents so they can
be tracked and made to pay what they owe to their children.

                           A LADDER EVERYONE CAN CLIMB

The whole world thinks of us as the land of opportunity, and we are. However,
millions of people are cut off from the blessings this land can provide.

These rungsbetter education, revival of our cities, crime control, improved
health care, and support for familiescan be put firmly in place so that even
the most disadvantaged of our people can climb to heights that they can only
dream about today. We want to encourage their dreams, but dreams alone are not
enough.

No one can ever tell me that the ladders don't matter. No one can tell me we
have to give up on generations of our young.

If we have to build those ladders with our own hands, the ladders must be
built and put in place.