[Budget Supplement]
[The Budget Message of the President]
[From the U.S. Government Printing Office, www.gpo.gov]
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RECEIPTS, OUTLAYS, AND SURPLUS OR DEFICIT
(In billions of dollars)
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Estimate
1995 --------------------------------------------------------------
Actual 1996 1997 1998 1999 2000 2001 2002
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Receipts................................ 1,355 1,427 1,495 1,578 1,653 1,734 1,820 1,912
Outlays................................. 1,519 1,572 1,635 1,676 1,717 1,761 1,812 1,868
Surplus/Deficit (-)..................... -164 -146 -140 -98 -64 -28 8 44
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[[Page 3]]
THE BUDGET MESSAGE OF THE PRESIDENT
To the Congress of the United States:
The 1997 Budget, which I am transmitting to you with this message,
builds on our strong economic record by balancing the budget in seven
years while continuing to invest in the American people.
The budget cuts unnecessary and lower priority spending while
protecting senior citizens, working families, and children. It reforms
welfare to make work pay and provides tax relief to middle-income
Americans and small business.
Three years ago, we inherited an economy that was suffering from
short- and long-term problems--problems that were created or exacerbated
by the economic and budgetary policies of the previous 12 years.
In the short term, economic growth was slow and job creation was weak.
The budget deficit, which had first exploded in size in the early 1980s,
was rising to unsustainable levels.
Over the longer term, the growth in productivity had slowed since the
early 1970s and, as a result, living standards had stagnated or fallen
for most Americans. At the same time, the gap between rich and poor had
widened.
Over the last three years, we have put in place budgetary and other
economic policies that have fundamentally changed the direction of the
economy--for the better. We have produced stronger growth, lower
interest rates, stable prices, millions of new jobs, record exports,
lower personal and corporate debt burdens, and higher living standards.
Working with the last Congress in 1993, we enacted an economic program
that has worked better than even we projected in spurring growth and
reducing the deficit. We have cut the deficit nearly in half, from $290
billion in 1992 to $164 billion in 1995. As a share of the Gross
Domestic Product, we have cut the deficit by more than half in three
years, bringing the deficit to its lowest level since 1979.
While cutting overall discretionary spending, we also shifted
resources to investments in our future. With wages increasingly linked
to skills, we invested wisely in education and training to help
Americans acquire the tools they need for the high-wage jobs of
tomorrow. We also invested heavily in science and technology, which has
been a strong engine of economic growth throughout the Nation's history.
For Americans struggling to raise their children and make ends meet,
we have sought to make work pay. We expanded the Earned Income Tax
Credit, providing tax relief for 15 million working families. And we
have given 37 States the freedom to test ways to move people from
welfare to work while protecting children.
As the economy has become increasingly global, prosperity at home
depends heavily on opening foreign markets to American goods and
services. With this in mind, we secured legislation to implement the
General Agreement on Tariffs and Trade and the North American Free Trade
Agreement, and we have completed over 80 other trade agreements. Under
our leadership, U.S. exports have grown to an all-time high.
With these policies, we have helped pave the way for a future of
sustained economic growth, low interest rates, stable prices, and more
opportunity for Americans of all incomes. But our work is not done.
Looking ahead, as I said recently in my State of the Union address, we
must answer three fundamental questions: First, how do we make the
American dream of opportunity for all a reality for all Americans who
are willing to work for it? Second, how do we preserve our old and
enduring values as we move into the future? And, third, how do we meet
these challenges together, as one America?
This budget addresses those questions.
[[Page 4]]
Creating an Age of Possibility
I am committed to finishing the job that we began in 1993 and finally
bringing the budget into balance. In our negotiations with congressional
leaders, we have made great progress toward reaching an agreement. We
have simply come too far to let this opportunity slip away.
A balanced budget would reduce interest rates for all Americans,
including the young families across the land who are struggling to buy
their first homes. It also would free up funds in the private markets
with which businesses could invest in factories and equipment, or in
training their workers.
But we have to balance the budget the right way--by cutting
unnecessary and lower priority spending; investing in the future;
protecting senior citizens, working families, children, and other
vulnerable Americans; and providing tax relief for middle-income
Americans and small businesses.
My budget does that. It strengthens Medicare and Medicaid, on which
millions of senior citizens, people with disabilities, and low-income
Americans rely. It reforms welfare. It cuts other entitlements. And it
cuts deeply into discretionary spending.
But while cutting overall discretionary spending, my budget invests in
education and training, the environment, science and technology, law
enforcement, and other priorities to help build a brighter future for
all Americans. We should spend more on what we need, less on what we
don't.
Projecting American Leadership
Across the globe, we live in a time of great opportunity and great
challenge. With the end of the Cold War, the world looks to the United
States for leadership. Providing it is clearly in our best interest. We
must not turn away.
My budget provides the necessary resources to advance America's
strategic interests, carry out our foreign policy, open markets abroad,
and support U.S. exports. It also provides the resources to confront the
emerging global threats that have replaced the Cold War as major
concerns--regional, ethnic, and national conflicts; the proliferation of
weapons of mass destruction; international terrorism and crime;
narcotics trading; and environmental degradation.
On the diplomatic front, our successes have been numerous and
heartening, and they have made the world a safer and more stable place.
Through our leadership, we are helping to bring peace to Bosnia and the
Middle East, and we have spurred progress in Northern Ireland. We also
encouraged the movement toward democracy and free markets in Russia and
Central Europe, and we led a successful international effort to defuse
the nuclear threat from North Korea.
On the military front, we have deployed our forces where we could be
effective and where it was in our interest to promote stability by
ending bloodshed (such as in Bosnia) and suffering (such as in Rwanda).
We also have used the threat of force to ease tensions, such as to
unseat an unwelcome dictatorship in Haiti and to stare down Iraq when it
threatened again to move against Kuwait.
This budget provides the funds to sustain and modernize the world's
strongest, best-trained, best-equipped, and most ready military force.
Through it, we continue to support service members and their families
with quality-of-life improvements in the short term, while planning to
acquire the new technologies that will become available at the turn of
this decade.
Creating Opportunity and Encouraging Responsibility
The Federal Government cannot--by itself--solve most of the problems
and address most of the challenges that we face as a people. In some
cases, it must play a lead role--whether to ensure the guarantee of
health care for vulnerable Americans, expand access to education and
training, invest in science and technology, protect the environment, or
make the tax code fairer. In other cases, it must play more of a
partnership role--working with States, localities, non-profit groups,
churches and synagogues, families, and individuals to strengthen
communities, make work pay, protect public safety, and improve the
quality of education.
[[Page 5]]
To restore the American community, the budget invests in national
service, through which 25,000 Americans this year are helping to solve
problems in communities while earning money for postsecondary education
or to repay student loans. We want to create more Empowerment Zones and
Enterprise Communities to spur economic development and expand
opportunities for the residents of distressed urban and rural areas. We
want to expand the Community Development Financial Institutions Fund to
provide credit and other services to such communities. With the same
goal in mind, we want to transform the Department of Housing and Urban
Development into an agency that better addresses local needs. And we
want to maintain our relationship with, and the important services we
provide to, Native Americans.
In health care, our challenge is to improve the existing and largely
successful system, not to end the guarantees of coverage on which
millions of vulnerable Americans rely. My budget strengthens Medicare
and Medicaid, ensuring their continued vitality. For Medicare, it
strengthens the Part A trust fund, provides more choice for seniors and
people with disabilities, and makes the program more efficient and
responsive to beneficiary needs. For Medicaid, it gives States more
flexibility to manage their programs while preserving the guarantee of
health coverage for the most vulnerable Americans, retains current
nursing home quality standards, and continues to protect the spouses of
nursing home residents from impoverishment. My budget proposes reforms
to make private health care more accessible and affordable, and premium
subsidies to help those who lose their jobs pay for private coverage for
up to six months. It also invests more in various public health
services, such as the Ryan White program to serve people living with
AIDS, and research and regulatory activities that promote public health.
Because America's welfare system is broken, we have worked hard to fix
those parts of it that we could without congressional action. For
instance, we have given 37 States the freedom to test ways to move
people from welfare to work while protecting children, and we are
collecting record amounts of child support. But now, I need the help of
Congress. Together, in 1993 we expanded the Earned Income Tax Credit for
15 million working families, rewarding work over welfare. Now, my budget
overhauls welfare by setting a time limit on cash benefits and imposing
tough work requirements, and I want us to enact bipartisan legislation
that requires work, demands responsibility, protects children, and
provides adequate resources to get the job done right--with child care
and training, giving recipients the tools they need.
More and more, education and training have become the keys to higher
living standards. While Americans clearly want States and localities to
play the lead role in education, the Federal Government has an important
supporting role to play--from funding pre-school services that prepare
children to learn, to expanding access to college and worker retraining.
My budget continues the strong investments that we have made to give
Americans the skills they need to get good jobs. Along with my ongoing
investments, my budget proposes a Technology Literacy Challenge Fund to
bring the benefits of technology into the classroom, a $1,000 merit
scholarship for the top five percent of graduates in every high school,
and more Charter Schools to let parents, teachers, and communities
create public schools to meet their own children's needs.
As Americans, we can take pride in cleaning up the environment over
the last 25 years, with leadership from Presidents of both parties. But
our job is not done--not with so many Americans breathing dirty air or
drinking unsafe water. My budget continues our efforts to find solutions
to our environmental problems without burdening business or imposing
unnecessary regulations. We are providing the necessary funds for the
Environmental Protection Agency's operating program, for our national
parks and forests, for my plan to restore the Florida Everglades, and
for my ``brownfields'' initiative to clean up abandoned, contaminated
industrial sites in distressed urban and rural communities. And we are
continuing to reinvent the regulatory process by working collaboratively
with business, rather than treating it as an adversary.
[[Page 6]]
With science and technology (S&T) so vital to our economic future, our
national security, and the well-being of our people, my budget continues
our investments in this crucial area. To maintain our investments, I am
asking Congress to fulfill my request for basic research in health
sciences at the National Institutes of Health, for basic research and
education at the National Science Foundation, for research at other
agencies that depend on S&T for their missions, and for cooperative
projects with universities and industry, such as the industry
partnerships created under the Advanced Technology Program.
To attack crime, the Federal Government must work with States and
communities on some problems and lead on others. To help communities, we
continue to invest in the Community Oriented Policing Services (COPS)
program, which is putting 100,000 more police on the street. We are
helping States build more prisons and jail space, better enforce the
Brady bill that helps prevent criminals from buying handguns, and better
address the problem of youth gangs. At the Federal level, we are leading
the fight to stop drugs from entering the country and expand drug
treatment efforts, and we are stepping up our efforts to secure the
border against illegal immigration while we help to defray State costs
for such immigration.
For many families, of course, the first challenge often is just to pay
the bills. My budget proposes tax relief for middle-income Americans and
small businesses. It provides an income tax credit for each dependent
child under 13; a deduction for college tuition and fees; and expanded
individual retirement accounts to help families save for future needs
and more easily pay for college, buy a first home, pay the bills during
times of unemployment, or pay medical or nursing home costs. For small
business, it offers more tax benefits to invest, provides estate tax
relief, and makes it easier to set up pensions for employees. It also
would expand the tax deduction to make health insurance for the self-
employed more affordable.
Making Government Work
As we pursue these priorities, we will do so with a Government that is
leaner, but not meaner, one that works efficiently, manages resources
wisely, focuses on results rather than merely spending money, and
provides better service to the American people. Through the National
Performance Review, led by Vice President Gore, we are making real
progress in creating a Government that ``works better and costs less.''
We have cut the size of the Federal workforce by over 200,000 people,
creating the smallest Federal workforce in 30 years, and the smallest as
a share of the total workforce since before the New Deal. We are ahead
of schedule to cut the workforce by 272,900 positions, as required by
the 1994 Federal Workforce Restructuring Act that I signed into law.
Just as important, the Government is working better. Agencies such as
the Social Security Administration, the Customs Service, and the
Veterans Affairs Department are providing much better service to their
customers. Across the Government, agencies are using information
technology to deliver services more efficiently to more people.
We are continuing to reduce the burden of Federal regulation, ensuring
that our rules serve a purpose and do not unduly burden businesses or
taxpayers. We are eliminating 16,000 pages of regulations across
Government, and agencies are improving their rule-making processes.
In addition, we continue to overhaul Federal procurement so that the
Government can buy better products at cheaper prices from the private
sector. No longer does the Government pay outrageous prices for hammers,
ashtrays, and other small items that it can buy cheaper at local stores.
As we look ahead, we plan to work more closely with States and
localities, with businesses and individuals, and with Federal workers to
focus our efforts on improving services for the American people. Under
the Vice President's leadership, agencies are setting higher and higher
standards for delivering faster and better service.
[[Page 7]]
Conclusion
Our agenda is working. We have significantly reduced the deficit,
strengthened the economy, invested in our future, and cut the size of
Government while making it work better for the American people.
Now, we have an opportunity to build on our success by balancing the
budget the right way. It is an opportunity we should not miss.
William J. Clinton
March 1996