TRANSCRIPT: GINGRICH 3/27 Q & A SESSION AT AMCHAM HONG KONG
(Patriotism differs from nationalism)

Washington -- Following is the transcript of a March 27 question-and-answer session with Newt Gingrich (Republican of Georgia), Speaker of the U.S. House of Representatives, after his remarks at the American Chamber of Commerce in Hong Kong:

(begin transcript)

Thank you Mr. Speaker. I think they liked it. I think it's the first standing ovation at an American Chamber lunch.

QUESTION: How will the U.S. Congress react if, if China clamps down on the media here or doesn't go ahead with elections. There has been a lot of predictions of you know that the Hong Kong handover will be a major irritant.

~A: You will have to repeat for everyone else the beginning of your question cause it's the key part.

Q: How will, how will you recommend the U.S. Congress reacts if China clamps down on the media or doesn't ~go ahead with free elections here after June 1st.

A: One of the lessons I've learned the hard way in the last few years is if I answer a hypothetical question that becomes the headline. So let me suggest the opposite. In every meeting we have had with every person involved in the transition we have been reassured again and again that there will be free elections. We have been assured again ana again that there will be freedom of the press. One of the key issues is the word sedition. And we have had very healthy discussions about the narrowness of that word as interpreted in our society. Where those of you who are history students may remember, Thomas Jefferson and the Federalists had a huge fight over the Sedition Acts about 200 years ago right now. We will be observing, working with, trying to be helpful but I would rather suggest to you that I believe, this may change when we leave Beijing, but I believe as of the moment that the odds are overwhelming there will be free elections in Hong Kong and we will be building on the healthy freedom of this community and seeing it extended. I believe that there will be, in fact, two systems and I would much rather approach our discussion in Hong Kong, I mean Beijing, on the positive note that this is going to work and that we want to be helpful in making it work rather than to start right now suggesting a hypothetical negative from which we can build a sense of hysteria out of which we could create a riot at the end of which we would have to have a... I really do believe it's important in the modern era to be positive.

Q: Mr. Gingrich.

A: Wait one second. Once you get recognized you have to run over or the news media gets very confused.

Q: How soon will it be before we can get CSPAN in Hong Kong?

A: Before you can get CSPAN?

Q: CSPAN, right?

A: I'm not sure which satellite you are getting it off of, Ted or Ruppert, but I think we ought to talk to both of them. I am very much in favor or CSPAN being worldwide, but I think that actually that's a great question and we wi~ll go back and pursue it. Although I must say to you, we are ~also having some trouble in America keeping CSPAN on some of t~he local cable channels. So we're going to have a long conversatin about it. For those of you who don't know, CSPAN is the cable ~system which carries the U.S. House and the U.S. Senate.

~Q: What's the content of your talk going to be in Taiwan?

A: It's conversation that I'm sure will, in part evolve over the next few days and which I would not want to outline right now, but we are committed to a one-China policy. We think there is a way for it to work. We are also committed to the sense of peaceful transition which was inherent in the Shanghai Declaration. I think the conversation will be in that context.

Q: Mr. Speaker, could you say a litte bit more about the upcoming debate on the flat tax versus the consumption tax please?

A: Well first of all, I think it's going to be a fascinating debate. The one consensus that is growing in America right now is that the Internal Revenue code is impossible. A~s you may know, the Internal Revenue system or the Internal Revenue Service spent about $4 billion trying to build a computer which could understand the Code and failed. We believe there's a hint there about the Code itself rather than the computer.

Secondly~ when Americans learn that there are 110,000 Internal Revenue agents as compared with 5500 people on the Border Patrol an~d 7400 people in the Drug Enforcement ~Administration so that is literally about 10 to 1, that this idea that we can't stop illegal immigration, something which Hong Kong has been very succes~ful at, or the idea that we can't stop illegal drugs, but we can audit every small business in America annually; the average person decides that this is maybe a mismatch of priorities.

So, the question then becomes which way do you go. As you know, Congressman Dick Armey, the Majority Leader in the House and Steve Forbes, Presidential Candidate last time both passionately favor a very simple, very flat tax code. You fill out the form on a postcard, send the money in, tax things once, no capital gains tax, no death taxes. A system that would be a big step towards the Kong Kong st~yle system.

Now Congressman Bill Archer, who has some impact since he's the Chairman of the Ways and Means Committee which writ~es tax law, is passionately committed to eliminating income tax entirely and goin~g to a sales tax so we'd have a system that fits the world market more and we would have a system which was dramatically out of your pocket. The IRS would not deal with average citizen at all. They would only deal with the collection of sales taxes.

Now I don't know which of those two or some variant is going to ultimately be successful so what we're doing is ~launching a debate where we literally have all the folks in the same room planning a year or two debating each other to reach out across the whole country so the American nation can decide. I am personally neutral. As long as we got to a tax system that is flat, very simple and useful in creating jobs and savings and investment I could go either way. But I want to be sure we have the debate. ~And I think it is a very profound moment for the country and I also think it brings the world market directly into our tax code in ~thinking about what's the right tax code for America in the 21st century to maximize job creation in the U.S. competing in the world market.

So it's going to be, I think, a very important and very exciting economic debate. We learned a lot here yesterday particularly talking at length with the financial secretary who is one of the most impressive civil servants I have ever seen anywhere in the world.

Q: Mr. Speaker, f~ollowing up on that remark and on your earlier remark about how Congress is focusing on exports and policy to increase American exports. Just want to mention that most of the Americans here in this room are involved in one way or another in the export of goods and services from America. And we feel that having Americans on the ground overseas is really critical to that effort and to exports.

Now we have seen recently an alarming trend to whereby hiring Americans and basing them overseas is vastly more expensive than hiring people from virtually any other country in the world. ~Because the United States, unlike virtually every other country in the world imposes income tax on its citizens even when they're residents overseas. Hong Kong doesn't do it. Canada doesn't do it. UK, France, Germany, Japan no one does it except for the U.S. and a couple of very unusual countries, North Korea, etc.

A: Would you like to ~go to Beijing with us and help educate us on how to communicate in a fair and impartial manner without rigging the examples?

Q: So Mr. Speaker, we would just be interested in your thoughts on the taxation of American overseas.

A: Now that will be interpreted later as Gingrich was asked if he favored the Kim Jung Il system of... Let me say at the risk of having my colleagues really get mad at me. I would like Jennifer Dunn and Mr. Jefferson, Bill Jefferson to both stand up for a second. They are both on the Ways and Means Committee. I think you should chat with both of them immediately after this meeting and explain to them in detail. But you raise a very good point. One of the things which is very clear and which everybody we talk to about Kong Kong's economy said again and again is that one of the reasons Hong Kong works is it follows the basic rules of economics. One of the reasons we have trouble creating jobs in America is that we break the basic rules of economics again and again and again. And this is a good example. If you want Americans overseas selling American products, communicating American values, then you should make it less expensive to have Americans overseas. And I think that's a message we've got to get back home.

Q: Yes, Speaker, I have a quick question for you. Can you kind of address the campaign funding scandal back in Washington. As a patriotic Asian American here, I sense from the media reports there~'s a backlash against Asian American money. As an example, I made a small donation to somebody back in Ohio recently and the check was almost sent back. Can you kind of address that. I get the sense that there is anti-Asian American money.

A: Let me draw a very real distinction. First of all any American citizen whether they are native-born American or they are first generation immigrants if they are an American citizen, they have absolutely every right to participate in the political process. And they should be encouraged to do so, period, across the board. ~The issues that are coming up in terms of the Clinton-Gore financing scandal. And that is really what it is. This is not some big, you know the press keeps trying to turn this some large complex vaguely understood thing. It's not complicated at all. About a year and a half ago a group of people sat down and decided they couldn't win the election if they didn't raise every penny they could from every source they could and if they actually obeyed the law it would be too complicated. This is not hard, OK. Now, this is not a Chinese problem. This is not a Taiwanese problem. This is not an Indonesian problem. This is an American problem. It is an American law, violated by Americans, engaging in acts which are illegal in our system and we have an obligation to police our system.

Now obviously, we're going to say to any foreign government, do not interfere in our political process. We are very zealous about safeguarding our political freedoms and I think that's legitimate. But I do think that the notion that this somehow balloons into some complicated Asian mystery, in the first place, some of the money came from a consultant to the Paraguayan government. Other money came from a Russian, I mean this is not some. We ought to be clear about what's going on here. And secondly, there apparently was at least one official who may have been engaged in a series of activities involving secrets and involving confidential information who was in the executive branch. That's a clear violation under any circumstances, but it's an American violation so obviously, I think this will come up in Beijing. My only point in Peking and Taiwan will be if we need information about specific people or specific companies we hope you will give us the information. Put prosecuting people is an American problem, inside the American system and it is totally unfair for us to blame somebody else for our having failed to accurately police our own system and that's where we ought to put the focus.

Q: Mr. Speaker to hear you share the values of America and what America stands for is particularly heartwarming to me, because I am one of those who came to America and became an American. However, I also would like to share with you a nightmare I have, which is that if our, the leaders of our great nation can only focus on the concerns of domestic constituents and fail to educate themselves as to what is going on in the world. I am so glad that you are here and able to see for yourself what's happening in the rest of the world. Then my nightmare is that one day I'll wake up and America will be the leader of the third~ world. And I ask from you that is as the leader of Congress, is there a commitment that you can make, a stand, that American leaders must educate themselves on what's happening in the rest of the world and be engaged in the world.

A: That's a very good question. I'm going to make it my last answer because I really want to answer it at some length if I might without giving a second speech. Because it's very misunderstood, I think, what we have been doing. First of all no one should doubt our persistence. My father, when I was very young, served in Korea during the war. I was with the second infantry division yesterday morning for breakfast four miles from the demilitarized zone. Where young Americans today for the forty-fourth year are protecting the Republic of Korea. Every year, year in and year out the Congress votes the money, the troops show up. We have young men and women in Bosnia, in Northern Iraq. We have folks in Haiti. We have people in Europe with the collapse of the soviet empire instead of telling us to go home the Poles and the Hungarians and the Rumanians and everybody else has said please come in. Across this planet we sustain the largest system of intelligence and military capabilities ever in history of peacetime by anybody. And we try to be diplomatically engaged everywhere. I had a delegation complain yesterday because I couldn't spend more time with them. And I had to explain to them that there are ninety countries on any given three month period that want to come and see us, routinely. Which is good and I'm for it. You can do several things.

Let me point out first of all that 20 percent of the United States House was in the People's Republic of China in December and January. Now you might find what percent of the People's Congress was in the United States in December and January. So when people talk to us about us being isolationists we have people everywhere. We ~just announced a program which Mr. Bereuter is going to have to go back home and explain, where we're asking him regularly to get on an airplane to come back here not to go to Nebraska but to be here because it's part of his duty. So we're willing to do that. Here's two things you can do though. Many of you represent companies that have reach all over America, that have local factories, local offices, local representation. We need you going back home occasionally and teaching locally why their Congressman or Congresswomen should travel. We need you explaining why we need to be in the world market. We need you helping people understand that it's hard work and it takes a lot of patience, but we're in the business of building friendships.

And let me close with one distinction that I think is very important. That it is a distinction I read many years ago that really stuck.... I am a patriot, but I am not a nationalist. There is a big difference. A nationalist believes in my particular system and everybody else's is secondary. A patriot believes that I love my country and therefore I can understand why you would love your country. Very big difference. I believe we have to recognize the pain, the physical pain and the psychic pain of the last 200 years in China. We have to understand that it's a legitimate feeling.

And particularly as someone who represents Georgia I can tell you that wars and devastation leave marks. That 100 years after Sherman visited Georgia we had a long period of difficulty with Ohioans because of the sense that he had not been as polite as he could have been. I'm married to an Ohioan so clearly we have lived beyond the burning of Atlanta. But it was... I say this, it is partly funny, but it is also real. We need to have enormous respect for the most populated country in the world and an open candid dialog within that respect. And similarly we hope that they will understand that we love and cherish our freedoms and that our passion for universal values may be as powerful as their sense of national pride. And if we can bring them together, then we'll create for the 21st century an energy of human creativity that will profoundly change the future of human rights. If we can't bring them together then we are each so large and each so strong that we face a very difficult 21st century. So much is at stake and it is worth a great deal of time and effort to learn to talk to each other. And you can make that easier by making sure that your frien~ds back home understand why this is important and why it is worth their member of Congress spending the time and the effort to understand the world. Because enough congressional delegations and enough conversations and enough education are infinitely preferable to the next expeditionary force and the next act of violence and this is the preemptive dialog that blocks that kind of a future from happening.

Thank you very, very much.

(end transcript)