President Clinton Announces Support For Internet Legislation

Office of the Press Secretary
(San Francisco, California)

For Immediate Release February 26, 1998


Ritz Carlton Hotel
San Francisco, California

11:30 A.M. PST

THE PRESIDENT: Thank you very much. I also want to thankwhoever turned the lights on. (Laughter.) When Sandy and I first cameout,you were all in the dark, and the lights were very bright. And I thoughtthere was something rather anomalous about my coming to a high-techconferenceand you being in the dark. (Laughter.)

Actually, I had to fight with the Vice President to see who

would get to come here today. Here's a guy who lives and breathes to talkabout teriflops (ph) and gigabytes. But I pulled rank. (Laughter.) Andsohere we are.

Thank you, Sandy, for your leadership and your kindremarks,and thank you for your friendship and your wise counsel. I'm verygrateful.

I am delighted to be here. In many ways, I think my tripheretoday would be sort of like a President going to Pennsylvania in the 1890stosee the people who first struck oil, or transformed iron ore into steel,thepeople who built our great Industrial Revolution America, for you haveminedthe myriad possibilities of the silicon chip, and likewise, havetransformedAmerica.

For those of us, like Congresswoman Pelosi and others whoserve in the national government, it's a very interesting challenge tryingtoassess where we are, where we're going, make the right decisions, and do it ina way that enables us to make the most of all this change while being truetoour most fundamental values.

These are good times for America. Sandy talkedabout it. We are almost now up to 15 million new jobs in thelast year and one month. We have the lowest unemployment in 24years; the lowest crime rate in 24 years; the lowest welfarerolls in 27 years; the lowest inflation in 30 years; we're aboutto have our first balanced budget in 30 years; the highest homeownership in the history of America. These are good times.

The economic strategy that we have embraced tobalance the budget, but to invest more in our people and theirfuture and to trade more around the world is working. But Ithink everyone who has studied this economy believes that at thedawn of a new century the strength of our economy, the health andprosperity of our people, indeed, the very security of our nationwill depend more than ever on the scientific and technologicalrevolution that so many of you have helped to set in motion.

Today, over 4 million Americans work intechnology-related industries, earning 70 percent above averageincomes. There are 70 new companies a week that start here inNorthern California alone in high-tech areas. There are newindustries -- biotechnology, super computers. But some of themost profound revolutions have occurred in old industries.Indeed, a great deal of information technology research anddevelopment is taking place in real estate, in services, inwholesale and retail trade, in construction, in transportation.The Ford Taurus that you drive today has more computer power thanthe Apollo 11 did that Neil Armstrong took to the Moon. It's aninteresting time.

I came today to talk about what we can do to buildon this progress by, in particular, promoting and expanding thefastest growing social and economic community in history -- theInternet. Ten years ago, it was still the province ofscientists, an obscure project developed by the DefenseDepartment. Five years ago, the World Wide Web barely existed; Ithink there were about 50 sites. Today, there are 1.5 millionnew web pages created every day, 65,000 every hour. Thisphenomenon has absolutely staggering possibilities todemocratize, to empower people all over the world. It could makeit possible for every child with access to a computer to stretcha hand across a keyboard, to reach every book every written,every painting ever painted, every symphony ever composed.

The next big step in our economic transformation, itseems to me, is the full development of this remarkable deviceand the electronic commerce it makes possible. One of the thingsI have focused on very much lately is with the unemployment rateat 4.7 percent, and the inflation rate very low and stable, thequestion arises from all conventional economic analysis, can wecontinue to grow robustly without new inflation. The answer is,if we're productive enough and we have enough technologicaladvances, we probably can.

The second this is, can we grow and finally extendthe benefits of this explosion of enterprise tothe isolated communities and people who have not yet felt thisremarkable economic upsurge -- the inner-city neighborhoods, theremote rural areas. I am convinced that the answer to both thosequestions can be yes, if, but only if, we maximize wisely thepotential of our technological revolution.

A new study soon to be released by our working groupon electronic commerce documents the remarkable growth of theInternet. Within a single year, an on-line bookstore,increased its sales nearly 10 times selling 6.5 million books in1997. In a year's time, Internet airline ticket sales nearlytripled and is expected to grow sixfold, to $5 billion a year, bythe year 2000. By 2002, electronic commerce between businessesin the United States alone will exceed $300 billion. And, ofcourse, as with everything on the Internet, that is just thebeginning.

This explosion of real commerce has the potential toincrease our prosperity, to create more jobs, to improve thelives of our people, and to reach into areas that have not yetfelt prosperity. But it raises new and serious issues as well:How can we further its growth and foster its magnificent freedomwithout allowing it to be used as a tax haven that drains fundsour states and cities need to educate our children and make ourstreets safe?

Thirty thousand separate taxing authorities in theUnited States -- I'll say that again -- there are 30,000 separatetaxing authorities in the United States -- all struggling to cometo grips with this phenomenon, with only their existing old taxmethods to apply to a very new world. There should be no specialbreaks for the Internet, but we can't allow unfair taxation toweigh it down and stunt the development of the most promising neweconomic opportunity in decades.

I think America should adopt a moratorium ondiscriminatory taxation so that a bipartisan commission ofelected officials, business leaders, consumers andrepresentatives of the Treasury Department can carefully studythe matter and come to a resolution. Therefore, I support theInternet tax freedom act now before Congress, because it takesinto account the rights of consumers, the needs of businesses andthe overall effect of taxation on the development of Internetcommerce. The legislation does not prevent state and localgovernments from applying existing taxes to electronic commerce,as long as there is no discrimination between an Internettransaction and a traditional one. It does give us time to workthrough what is a very, very complex issue.

I'm committed to listening to the concerns of thegovernors, the mayors, other officials and businesses, and toachieve a consensus that will establish rules that arepro-growth, nondiscriminatory, but will provide appropriaterevenues our communities need to meet vital public purposes. Ithink this legislation will have the support of both parties.And I look forward to working with many of you to pass it and,along the way, to reach a greater consensus in our nation abouthow to go forward from here.

To ensure that electronic commerce can flourishacross international borders, I've also asked the Secretary ofthe Treasury to work with our international trading partners toblock new or discriminatory taxes on global electronic commerce.Already, we've fought off a bit tax, a tax on every unit of dataconsumers download from the Internet. And we're working with theOrganization of Economic Cooperation and Development to preventsuch discrimination and streamline tax administration incyberspace.

There are other ways our nation must work to harnessthe potential of the Internet. We want to work with you to meetour goal of connecting every classroom and library in America tothe Internet by the year 2000. Just this morning in Washington,Vice President Gore announced that we have now connected nearly80 percent of our schools to the Internet; more than twice asmany as were connected in 1994 when we had the first Net Day herein California under the leadership of many of you in this room.He also announced new private and nonprofit efforts to connectunder-served communities to 21st century technology, bringing uscloser to ensuring that a child from the poorest inner city, themost isolated rural area, or the most affluent suburbs all willhave the same access to the same universe of knowledge in thesame real time.

We want to work with you to make certain thatcyberspace is a healthy place for our children in a way that doesnot overregulate the Internet or stifle the growth of electroniccommerce. We will work with you to make sure that consumerprotections and laws that promote competition remain strong inthe new economy at the dawn of the new century, just as we builtcompetition into the old economy at the turn of the last century.

We will work with you to make sure that the Internetnever becomes a vehicle for tax evasion or money laundering. Wewill work with you to build a new Internet that operates up to athousand times faster than it does today. My balanced budgetincludes $110 million to develop the next generation Internet inpartnership with leading U.S. high-tech companies anduniversities. Today, I'm pleased to announce new NationalScience Foundation grants that will connect 29 more universitiesto help create the next generation Internet, bringing the totalnow to 92. And we will work with you in every way we can to liftour eyes to the remarkable potential of the Internet forlearning, for the arts, as a means to spread our shared values.

The First Lady and I launched the White HouseMillennium Program to help our nation honor our past and imagineour future as we come to this new millennium. In the State ofthe Union address I announced a public-private partnership topreserve our historic treasures for future generations and tohelp make them more accessible to more Americans, including theDeclaration of Independence, the Bill of Rights, theConstitution, the Star-Spangled Banner. Putting our treasures online will help us to do just that. Our balanced budget will make3 million objects from the Smithsonian Institution, the NationalArchives and other collections available on the Internet by theyear 2000. And together with the private sector we'll helpmuseums and libraries and communities all around our country todo the same thing.

Two weeks ago, thanks to Sun Microsystems, welaunched the first ever cybercast from the White House, whenhistorian Bernard Bailyn from Harvard gave the first in a seriesof our Millennium Lectures. We started this special program tobring some of our greatest thinkers, writers, historians andscientists to the White House to talk about our nation's historyand our future at this pivotal time. Next week, the worldrenowned physicist Stephen Hawking will be with us to talk abouthuman knowledge in the 21st century, and the innovations it willcreate. I hope you will join us on-line at We'll be there. And this time, we will have thecapacity not to shut down like we did last time. (Laughter).

This is a truly exciting time to be an American.The qualities of the digital revolution, its dynamism, itcuriosity, its flexibility and its drive -- they're at the coreof our character and the legacy of our original revolution. Byonce again adding the fuel of interest to the fire of genius, asAbraham Lincoln once said, our country is leading the world tonew heights of economic and human development.

I ask you to think about these things together. Theeconomic development is largely the means by which we seek toexpand the quality of human life not only for the people whodirectly participate in it, but for those who benefit indirectly.

As I think more and more about a new century and anew millennium, I also think more and more about how we began.All of you are here today committed to an incredibleentrepreneurial way of life and work as the descendants of agroup of people who came here believing that free people wouldnearly always get it right. They came fleeing societies wherepeople like you, with good ideas in the 18th century, weresubject to absolute, arbitrary, abusive government power. Andthey forged a Declaration of Independence, a Constitution, and aBill of Rights based on the simple idea that freedom workedbetter and that people ought to be free to pursue happinesswithin the context of a more perfect union.

If you look at the whole history of this country,that's what it has been about. You think about every singleperiod of change and crisis, whether it was the Civil War or theIndustrial Revolution, the civil rights era, or the presentinformation age, and the advances have come when we have deepenedthe meaning of freedom and expanded it to more people, widenedthe circle of opportunity and prosperity, and found a way acrossall of our myriad diversities to be a stronger, more unitednation.

That is really what you are a part of, to a degreethat would have been unimaginable to the people who founded thisnation. But I believe it would make them very, very proud.

Thank you for what you do and for what, together, wewill do to make our country stronger in this new era. Thank youvery much. (Applause.)

What's New - February 1998

Efforts To Protect Children's Health

Annual Economic Report

Departure Statement on Iraq

Ron Brown Corporate Leadership Award Ceremony

Welcome Prime Minister Blair

Disaster Sites In Florida

Clean Water Action Plan

Millennium Programs

Support For Internet Legislation

Pass Patients' Bill of Rights

NATO Expansion Protocols

Education Discussion with Governors

Congressional Democrats

Statement on Iraq

Joint Press Conference With Prime Minister Tony Blair

American Association for the Advancement of Science

First Balanced Budget in 30 Years

Commitment to Child Care

Ford's Theater Gala

Los Alamos National Laboratories

Dialogue on Social Security Reform

"High Hopes" Education Partnerships

National Prayer Breakfast

American Position in Persian Gulf

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