ACCESSION NUMBER:377300 FILE ID:POL402 DATE:02/02/95 TITLE:WHITE HOUSE REPORT, THURSDAY, FEBRUARY 2 (02/02/95) TEXT:*95020202.POL WHITE HOUSE REPORT, THURSDAY, FEBRUARY 2 (Deficit/interest rates, China/rights, intelligence study) (600) 1EWS BRIEFING -- Press Secretary Mike McCurry discussed the following topics: INTEREST RATE HIKE WILL IMPACT CLINTON '96 BUDGET McCurry said he did not know if the Federal Reserve's hike in interest rates compelled President Clinton to go back into the budget for "more programmatic cuts." McCurry told a questioner, "That is a good question. I don't know whether they had to adjust any of their baseline calculations based on the actions of the Fed yesterday. I have to refer that to those who will be briefing next week" on the 1996 federal budget. McCurry said that as part of budget calculations, the administration would have to determine "what the impact" of higher rates will be "on the federal budget. How you calculate that, how you anticipate the interest on the federal debt that will then be added, in a sense, to the federal budget deficit," he said, are determinations made by budget experts who will answer questions February 6. Clinton, talking with reporters while presenting his choice for surgeon general, told a questioner that he will not be able to reduce the deficit as much as he had originally planned because of the Fed's action. The president said again that he plans twice as much in spending cuts as in tax reductions in the Middle Class Bill of Rights. "We will keep a tight rein on the budget deficit," he said. "One thing that we have no control over," Clinton noted, "is the impact of higher interest rates. The American people should know that whenever interest rates are raised by the Fed, among other things the cost of carrying the nation's debt goes up. We can't do anything about that. In that sense, the deficit will not go down as much as I had hoped, because interest rates have gone up. We can't fully compensate for that, there's nothing to be done about it." OTHER DEVELOPMENTS: CLINTON SAYS CHINA TREATED FAIRLY IN HUMAN RIGHTS REPORT President Clinton rejected China's claim that the State Department's Country Reports on Human Rights Practices for 1994 treated it unfairly, noting, "That's always been their defense; we disagree. We believe that there are international standards of human rights. The assistant secretary is charged by law with submitting a report every year. All he did was fulfill his legal responsibility to tell the truth as he saw it, and that is what he did. I think Mr. Shattuck has done a good job." The president called this year's report "the most comprehensive report ever filed by the State Department and it covers far more than China. China was not singled out. We evaluated every country in every part of the globe...in this regard." CLINTON NAMES INTELLIGENCE COMMISSION MEMBERS President Clinton named Les Aspin to head the Commission on the Roles and Capabilities of the United States Intelligence Community and former Senator Warren Rudman as co-chairman. Aspin, the former congressman and former defense secretary, is chairman of the Foreign Intelligence Advisory Board. In a written statement, Clinton said intelligence gathering and analysis "remains a critical element of our national power and influence," and he called for a renewal of bipartisan support for intelligence operations. Clinton also named to the commission Zoe Baird, Ann Caracristi, Stephen Friedman, Anthony Harrington, Robert Hermann, former ambassador Paul Wolfowitz, and retired General Lew Allen. Congress selected former Congressman Tony Coelho, David Dewhurst, Congressmen Norman Dicks and Porter Goss, Senators James Exon and John Warner, former Senator Wyche Fowler, and retired Lieutenant General Robert Pursley. 1NNN .