THE WHITE HOUSE
Office of the Press Secretary
For Immediate Release April 13, 2000
PRESIDENT CLINTON WILL URGE CONGRESS TO PASS A BUDGET THAT INVESTS IN KEY PRIORITIES, EXTENDS THE LIFE OF SOCIAL SECURITY AND MEDICARE, AND PAYS OFF THE DEBT BY 2013
April 13, 2000
Today President Clinton will urge Congress to pass a fiscally disciplined budget that invests in key priorities, extends the life of Social Security and Medicare, and pays off the debt held by the public by 2013. In contrast, the Congressional Budget Resolution expected to be adopted by the Republican majority requires deep reductions in key priorities like education, threatens to drain the Social Security surplus, fails to add a single day to the life of Medicare or Social Security, would make it impossible to pay off the debt by 2013, and puts at risk our unprecedented economic prosperity.
The Congress Has Already Passed Tax Cuts That Spend More than Half of the On-budget Surplus. Before even considering investments in Medicare, Social Security, or education, the House has already passed tax cuts that total more than $374 billion over 10 years. With interest, that would use more than $458 billion of the surplus. The Senate -- including the marriage penalty bill currently being debated -- is at $404 billion in total tax cuts, or $492 billion with interest. Either way this uses more than half of the $746 billion non-Social Security surplus projected by the Administration or the $893 billion projected by the Congressional Budget Office over the next 10 years.
By Suddenly Switching to a 5-year Budget Resolution, Congress Hides the Cost of Tax Cuts. By using five year numbers, the Congressional budget resolution hides the true cost of the Republican tax cuts, doing nothing to constrain their growth after 2005. Republican leaders, however, have indicated that their total tax cuts would cost at least as much as last year's, which with interest would have cost nearly $1 trillion over 10 years. In breaking with the practice of putting forth ten year budget resolutions, the Republican Congress is turning its back on an essential tool to ensure that the choices we make today are consistent with addressing our long-term fiscal challenges.
The Budget Resolution Would Cut Most of Domestic Discretionary Spending By an Average of About 10 Percent in 2001 Alone. While the President's budget provides significant investments in essential priorities, including education, law enforcement and science and technology, the Republican budget would dramatically cut these priorities. The budget resolution has non-defense discretionary spending for FY 2001 of $289 billion -- $7 billion below spending in 2000 and $20 billion below the level needed to maintain current program levels. The Republicans have announced their intention to protect funding for certain areas including defense, veterans' health and the National Institutes of Health. To do so within the total level of funding allocated by the Budget Resolution, however, they would need to slash funding for most other domestic priorities by an average of about 10 per cent in 2001 alone. If Republicans continued spending cuts at the same rate as 2001-05, then the cut in domestic priorities would grow to, on average, about 25 percent by 2010.
If These Unrealistic Spending Cuts Do Not Materialize, the Republican Budget Would Spend $67 Billion of the Social Security Surplus in the First Five Years Alone. The budget resolution proposes $175 billion of tax cuts over 5 years. With interest, the cost would be $194 billion -- more than the Congressional Budget Office's projected $171 billion 5-year non-Social Security surplus. If $40 billion is used for Medicare, the Republican tax cut would spend $67 billion of the Social Security surplus over the first five years alone.
- The tax cut the President vetoed last year cost $156 billion over 5 years and would have exploded to $792 billion over 10 years. That tax cut, and the associated interest, would spend more than the entire non-Social Security surplus over 10 years.
The Republican Budget Does Not Add a Single Day to the Solvency of Social Security or Medicare.
- The President's budget devotes $299 billion over 10 years as part of a plan to extend the solvency of Medicare to at least 2030. In contrast, the Congress does not devote any money to extend the life of Medicare by even one single day. In fact, by spending more than the available surplus, the Republican budget resolution would make it impossible to invest substantial surpluses in extending the solvency of Medicare.
- The President's budget does not just protect the Social Security surpluses for debt reduction, but also transfers the interest savings resulting from that debt reduction to extend the life of Social Security to at least 2054. In contrast, the Republican so-called "Safe Deposit Box" for Social Security surpluses would not extend the life of Social Security by even one single day. In fact, the unrealistic Republican budget plan threatens to break their "Safe Deposit Box" for Social Security surpluses.
The Fiscally Undisciplined Republican Tax Cut Would Make It Impossible To Pay Off the Debt By 2013 and Would Risk Our Economic Expansion. Even with their drastic spending cuts, the Republicans have only set aside $12 billion for debt reduction from the non-Social Security surplus. If the drastic Republican spending cuts were not implemented, the Republicans would be forced to divert a sizeable portion of the Social Security surplus away from debt reduction. As a result, it would be impossible to pay off the debt held by the public by 2013.
President Clinton and Vice President Gore Have Proposed a Balanced and Fiscally Responsible Plan to Strengthen Social Security and Medicare, Pay Off the National Debt by 2013 and Maintain Our Economic Prosperity, While Investing in Key Priorities like Health and Education.
- Paying off the debt. The debt held by the public would be paid off by 2013, resulting in lower interest rates and a stronger economy.
- Strengthening and modernizing Medicare. Medicare solvency would be secured until at least 2030, Medicare would be reformed to make it more efficient and competitive, and its benefits would be modernized with a new prescription drug benefit.
- Extending the life of Social Security. The Social Security surplus would be dedicated to paying down the debt, and Social Security solvency would be extended to at least 2054.
- Investing in key priorities. The budget framework is based on realistic discretionary spending levels that include investment in key priorities like education, health care, environment, public safety, and national security, while keeping overall spending growth slightly below inflation.
- Tax relief for American families. A set of fair and responsible tax cuts would provide targeted tax relief for American families, including helping them save for retirement, pay for child care, and go to college.
President Clinton and Vice President Gore's Plans Build on Their Record of Success. When President Clinton and Vice President Gore were elected, they implemented an economic plan which consisted of restoring fiscal discipline, investing in people, and opening markets abroad. The current budget builds on the successes of that plan:
- Record budget deficits have been erased. In 1992 the deficit was a record $290 billion and CBO projected that it would grow to $455 billion by 2000. Instead we have a projected $167 billion surplus, the third one is a row. That is $622 billion less savings drained by the government in one year alone.
- The largest pay-down of debt in history: $297 billion. In 1998 and 1999, the debt held by the public was reduced by $140 billion. OMB is projecting that the government will pay down an additional $157 billion in debt held by the public this fiscal year. That will bring the total debt pay down to $297 billion -- the largest three-year debt pay down in American history. In contrast, under Presidents Reagan and Bush, the debt held by the public quadrupled.
- Smallest government in over three decades while increasing key investments in our people. Government spending has declined from 22.2 percent of the economy in 1992 to 18.7 percent of the economy in 1999 -- the lowest share since 1966. At the same time, the government has made important investments, including nearly doubling investments in education and training.
- Tax burden for typical families is the lowest since the 1970s. At the same time, according to the Department of the Treasury, the typical American family of four have the lowest Federal income tax burden since 1965 and the lowest combined Federal income and payroll tax burden since 1978.
- Investment has boomed. The benefits of fiscal discipline for our economy have been enormous. Interest rates are lower than they would have been otherwise, helping to fuel seven consecutive years of double-digit investment growth for the first time on record.
- Unemployment is the lowest in a generation. The unemployment rate in March was 4.1 percent -- nearly the lowest in 30 years -- and America has created 21.2 million jobs since January 1993, with 92 percent -- 19.4 million -- of these in the private sector.
- The longest economic expansion in history. The economy is entering its 107th month of economic expansion -- the longest economic expansion in U.S. history.