Here is a transcript of President Bush's news conference Friday at the White House: BUSH: Good morning everybody. And I'm leaving in a few hours and will be gone from Washington for several days. Congress is about to close up shop for the 4th of July holidays and so I thought it would be a good idea to bring you up to date on a wide array of current topics and respond to your questions. During the next two weeks the US will join its allies in considering a number of crucial political security and international economic issues. And seldom in the last 40 years have such questions had such direct impact on the lives of all Americans. Today in the US we are carefully examining the historic changes in Eastern Europe, the size of our military forces, our ability to compete in world markets, the assistance that we provide to help emerging democracies, and the size and priorities of our own budget and how to continue the 90 months of economic expansion that we've enjoyed. These issues are not abstract. Every American has a stake in how we as a nation address these very complex questions. On July 5th and 6th in London the NATO alliance will gather to forge a new direction for the future. And at the Houston economic summit we will press for progress in the Uruguay Round of trade negotiations, discuss economic support for various countries, and review progress on the environment. These international concerns are reflected in many of the decisions I made just this week. First, we are doing what is necessary to assure continuation of the economic expansion, now in its 90th month, and we want to keep it going. We now estimate a deficit of over $150 billion in fiscal 1991, not counting the costs of the savings and loan cleanup. And this means that unless Congress acts, there will be a cutoff in October of nearly $100 billion in government services under the sequester provisions of the Gramm-Rudman-Hollings. The potential results are Draconian cuts in defense, student grants and a wide array of other necessary domestic services, and to avoid this, tough decisions must be made. And leadership is needed, and that is exactly what administration officials are seeking to provide and indeed, in these talks, I believe are providing. The budget negotiations now under way are a make-or-break effort at responsible government. The congressional budgeting process must succeed and the negotiators are facing tough questions about where to make cuts and where to raise the revenues, and these are not decisions that anyone relishes. They are decisions that Democrats and Republicans alike have got to face with candor and courage. And frankly, I believe that ultimately good politics is rooted in good government, and I'm optimistic that we can get a budget agreement legislated which not only tells the world that America puts its fiscal house in order, but also will garner the full support of the American people. Secondly, this week we reached an agreement with the Japanese on (the) Structural Impediments Initiative that's going to help to open markets and create new opportunities for business and commerce. Next, we took an important step toward increasing jobs, opportunity, and economic prosperity throughout our own hemisphere _ Enterprise for the Americas, an innovative and I think visionary plan for increased trade and investment with Latin America and the Caribbean, and the response from south of our border has been overwhelmingly positive. And this included a new proposal on official debt in the hemisphere which will help our neighbors in Latin America and the Caribbean resume the process of growth. We developed a plan for protecting our coastal resources _ this OCS decision _ while also endeavoring to protect energy independence. And as I leave for the 4th of July holiday, and then from there to the NATO summit, and then to the Houston economic summit, I just wanted to assure you that the America _ America will squarely face the challenges of leadership that are before us, both domestically and in terms of international affairs. Q. Mr. President, I'd like to ask you about your reversal on ``no new taxes.'' Do you consider that a betrayal of your promise, and what do you say to Republicans who complain that you've robbed them of the same campaign issue that helped get you elected? BUSH: Well, I don't. I think what I consider it is a necessary step to get stalled budget negotiations moving. And I am very encouraged with the approach taken now by Republicans and Democrats in this _ in these important discussions that are going on. I'm not going to discuss details, what I'll accept and what I won't accept, but things are moving, and I think that much more important today is getting this deficit down, continuing economic expansion and employment in this country. So that's the way I'd respond to it. MORE