[Budget of the United States Government]
[I. The Budget Message of the President]
[From the U.S. Government Publishing Office, www.gpo.gov]


 
  I.  THE BUDGET MESSAGE OF THE PRESIDENT



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                                                  Table I-1.  RECEIPTS, OUTLAYS, AND SURPLUS OR DEFICIT                                                 
                                                                (In billions of dollars)                                                                
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                   Estimates                                            
                                                1997  --------------------------------------------------------------------------------------------------
                                               Actual    1998     1999     2000     2001     2002     2003     2004     2005     2006     2007     2008 
--------------------------------------------------------------------------------------------------------------------------------------------------------
Receipts....................................    1,579    1,658    1,743    1,794    1,863    1,949    2,028    2,123    2,227    2,329    2,444    2,566
Outlays.....................................    1,601    1,668    1,733    1,785    1,834    1,860    1,945    2,013    2,090    2,165    2,228    2,307
Reserve Pending Social Security Reform......       NA       NA       10        9       28       90       83      109      137      164      216      258
Deficit (-)/Surplus.........................      -22      -10        0        0        0        0        0        0        0        0        0        0
--------------------------------------------------------------------------------------------------------------------------------------------------------


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                   THE BUDGET MESSAGE OF THE PRESIDENT

  To the Congress of the United States:
   The 1999 Budget, which I am submitting to you with this message, is a 
balanced Federal budget, marking the first such budget in 30 years and 
bringing an era of exploding deficits to an end.
   By reaching balance, my budget represents a remarkable turnaround in 
our fiscal policy over the last five years. It brings to an end three 
decades of fiscal chaos, a period in which Americans had lost confidence 
in their Government and the ability of their leaders to do the people's 
business.
   This budget is not just balanced, it is balanced the right way. It 
not only ends the deficit, it reflects the values that Americans hold 
dear--the values of opportunity, responsibility, and community. The 
budget reflects my commitment to continue helping working families with 
their basic needs--to raise their children, send them to college, and 
pay for health care.
   The budget invests in education and training and in research to raise 
the standard of living for average Americans. It invests in the 
environment and in law enforcement to raise the quality of life across 
our Nation. It invests in our communities at home while providing the 
resources to maintain a strong defense and conduct the international 
relations that have become so important to our future.
   In the public and private sectors, prospects for a budget surplus are 
spurring a wide array of ideas about how to spend it. At this point, the 
Government has not yet reached the surplus milestone, and I continue to 
believe strongly that we should not spend a surplus that we don't yet 
have.
   More specifically, I believe that the Administration and Congress 
should not spend a budget surplus for any reason until we have a 
solution to the long-term financing challenge facing Social Security. 
With that in mind, my budget proposes a reserve for the projected 
surpluses for 1999 and beyond.

Preparing the Nation for a New American Century

   Five years ago, my Administration took office determined to restore 
the American Dream for every American. We were determined to turn the 
economy around, to rein in a budget that was out of control, and to 
create a Government that once again would focus on its customers, the 
American people.
   Five years later, we have made enormous progress. Our economy is 
strong, our budget is headed toward balance, and our Government is 
making noticeable progress in providing better service to Americans.
   We are beginning to bring Americans together again, to repair the 
social fabric that has frayed so badly in recent decades. All across 
America, crime is down, poverty is down, and welfare is down. Incomes 
are rising at all levels, and a new spirit of optimism is sweeping 
through many of our urban and rural communities that are rebounding from 
decades of lost jobs and lost hope.
   Now that we have turned the economy around, our task is to spread the 
benefits of our economic well-being to more Americans, to ensure that 
every American has the chance to live out his or her dreams. As we move 
confidently ahead as a Nation, we want to ensure that nobody is left 
behind.
   A century ago, the economy shifted from agriculture to manufacturing, 
changing the way that Americans lived, the way they worked, the way they 
related to one another. Today, the economy is shifting once more, this 
time from manufacturing to services, information, technology, and global 
commerce.
   We can ensure that every American fully enjoys the benefits of this 
exciting new age, but only if we continue to give people the tools they 
need and create the conditions in which they can prosper. That is what 
my budget is designed to do.

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Creating a Bright Economic Future

   When my Administration took office, the Nation was mired in economic 
problems. The economy had barely grown over four years, creating few 
jobs. Interest rates were high. Incomes remained stagnant for all but 
the most well-off. The budget deficit, which had exploded in size in the 
early 1980s, had reached a record $290 billion and was headed higher. 
Clearly, the Nation needed a new course.
   We launched an economic policy with three central features that had 
never before been tried together: We set out to reduce the deficit, 
invest in the American people, and open up markets abroad. Only by 
pursuing all three elements could we restore the economy and build for 
the future.
   My 1993 budget plan, the centerpiece of our economic strategy, was a 
balanced plan that cut hundreds of billions of dollars of Federal 
spending while raising income taxes only on the top 1.2 percent of 
Americans. By cutting unnecessary and lower-priority spending, we found 
the resources to cut taxes for 15 million working families while 
investing in education and training, the environment, and other 
priorities.
   Five years later, we have cut the deficit dramatically, and this 
budget will finish the job by reaching balance and keeping the budget in 
balance for the foreseeable future. We have invested in the education 
and skills of our people, giving them the tools they need to raise their 
children and get good jobs in an increasingly competitive economy. We 
have expanded trade through global as well as bilateral agreements, 
generating record exports that create high-wage jobs for millions of 
Americans.
   The economy responded almost immediately to our policies. When I 
announced my 1993 budget plan, interest rates fell, and they fell even 
more as I worked successfully with Congress to put the plan into law. 
These lower interest rates helped to spur the steady economic growth and 
strong business investment that we have enjoyed for the last five years. 
Our policies have helped create over 14 million jobs, while interest 
rates have remained low and inflation has stayed under control.
   As we move ahead, I am determined to ensure that we stick with the 
policies that are working. We must maintain our fiscal discipline so 
that we not only reach balance, but also keep the budget in balance.

Improving Performance Through Better Management

   We are balancing the budget the right way, by reducing the size and 
scope of our Government.
   We have done more than just eliminate hundreds of Federal programs 
and projects. We have cut the civilian Federal work force by over 
316,000 employees, giving us the smallest work force in 35 years. In 
fact, as a share of our total civilian employment, we have the smallest 
work force since 1931.
   But we set out to do more than just cut Government. Under the 
leadership of the Vice President's National Performance Review, we set 
out to make Government work, to create a Government that is more 
efficient and effective, to create a Government focused on its 
customers, the American people.
   We have made real progress, but we still have much work to do. We 
have reinvented parts of departments and agencies, but now we are 
determined to turn our agencies around from top to bottom. For 1999, the 
Vice President will lead an effort to improve the performance of 
agencies that interact most with the American people. We want to enable 
Americans not only to quickly enjoy better service from our Government, 
but to regain confidence in Government as well.
   At the same time, I am determined that we will solve the very real 
management challenges before us. A good example is the challenge of 
ensuring that our computer systems can accurately process the year 2000 
date change. I have directed my Administration to take the necessary 
steps to meet the problem head-on.

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Preparing for the 21st Century

   Nothing is more important to our future than education. It has become 
the dividing line between those who are moving ahead and those who are 
lagging behind. That is why I have devoted so much effort to ensure that 
we have a world-class system of education and training in place for 
Americans of all ages. Over the last five years, we have worked hard to 
ensure that every boy and girl is prepared to learn, that our schools 
focus on high standards and achievement, that anyone who wants to go to 
college can get the financial help to attend, and that those who need a 
second chance at education and training or a chance to improve or learn 
new skills can do so. My budget significantly increases funds to help 
children, especially in the poorest communities, reach challenging 
academic standards and makes further progress in implementing voluntary 
national tests. It proposes to build more classrooms and pay for 100,000 
more teachers so that we can reduce class sizes. For higher education 
and training, my budget increases Pell Grants and other college 
scholarships from the record levels that we have already achieved; 
expands College Work-Study to a record one million students; streamlines 
student loan programs and cuts student fees; and expands access to job 
placement services, training, and related services for dislocated 
workers and others. Now that anyone who wants to attend college can find 
the means through Hope scholarships, Pell Grants, and other assistance 
that we worked so hard to enact, I want to provide the same universal 
opportunity for job training and re-training to those who need it.
   Over the last five years, we have worked hard to help working 
families. We cut taxes for 15 million working families, provided a tax 
credit to help families raise their children, ensured that 25 million 
Americans a year can change jobs without losing their health insurance, 
made it easier for the self-employed and those with pre-existing 
conditions to get health insurance, provided health care coverage for up 
to five million uninsured children, raised the minimum wage, and 
provided guaranteed time off for workers who need to care for a newborn 
or address the health needs of a family member. Now, with my new Child 
Care Initiative, I am determined to provide the help that families need 
when it comes to finding safe, high-quality, affordable child care. 
Parents should know that, when they go to work, their children are in 
safe, healthy environments. I also propose to address the problems faced 
by a particular group of working families--legal immigrants. In signing 
the 1996 welfare reform law, I said that I would try to restore the cuts 
in benefits for legal immigrants that were not only harsh and 
unnecessary but that had nothing to do with the fundamental goal of 
welfare reform--to move people from welfare to work while protecting 
children. My budget restores Food Stamps to 730,000 legal immigrants and 
lets States provide health insurance to the children of legal 
immigrants.
   This past year, we continued to improve health care for millions of 
Americans. We strengthened Medicare by extending the life of the trust 
fund until at least 2010, while we also invested in preventive benefits, 
introduced more choice of health plans, and strengthened our expanding 
array of activities to combat fraud and abuse. We extended health care 
coverage to up to five million uninsured children. We created the 
Advisory Commission on Consumer Protection and Quality in the Health 
Care Industry and we later endorsed its Health Care Consumer Bill of 
Rights. With this budget, I propose that we build on our achievements on 
a host of important fronts. I want to work with Congress to enact 
national bipartisan tobacco legislation; nothing is more potentially 
important to the health of our people, particularly children. My budget 
also proposes to expand health care coverage for some of the most 
vulnerable Americans aged 55 to 65, to enroll more eligible children in 
Medicaid, to provide for unprecedented levels of investment in health 
research, to expand access to powerful AIDS therapies, to expand access 
to cancer clinical trials, to increase funds for substance abuse 
treatment and prevention, and to help reduce health-related disparities 
across racial and ethnic groups.
   Last year was a remarkable one for the environment, and I am 
determined to build on our progress. Led by the Vice President, the 
Administration reached an historic inter

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national agreement in Kyoto that calls for cuts in greenhouse gas 
emissions. We also issued new, more protective air quality standards to 
better safeguard public health, and we strengthened our citizens' right 
to know about toxic chemical releases. We continued to protect our 
natural treasures, such as Yellowstone National Park and Florida's 
Everglades, and to make further progress toward my goal of cleaning up 
900 hazardous waste sites under the Superfund by the end of the year 
2001. With this budget, I am proposing an Environmental Resources Fund 
for America that will support increases for many of our key 
environmental programs. It provides for more construction, maintenance, 
and land acquisition for national parks, forests, refuges, and other 
public lands; for a new effort to improve the quality of our water; for 
improvements to community drinking water and wastewater facilities; and 
for continuing our efforts to clean up abandoned hazardous waste sites. 
My budget also includes a new, five-year, $6 billion program to prevent 
global warming, and more resources to protect endangered species, 
control pollution, and preserve the global environment.
   I am proposing a Transportation Fund for America, reflecting my 
commitment to provide the resources to ensure that our transportation 
infrastructure remains safe, integrated, and efficient enough to serve 
our growing needs. Investment in infrastructure is good for America 
because it helps grow the economy, improve safety and public health, 
strengthen our competitiveness abroad, support our national security, 
and increase the mobility, access, and choice for Americans who need to 
travel. We must build upon our vast network of roads, highways, and 
bridges to meet the demands of the next century for a system that links 
our various modes of travel, that is cleaner and safer, and that helps 
bring together and support our urban and rural communities. My budget 
maintains the Administration's record support for transportation, and 
the Fund includes all of the Transportation Department's highway, 
highway safety, transit, and air transportation programs.
   Scientific and technological advances have created a world vastly 
different from the one our grandparents knew. They have helped generate 
huge leaps in the speed and economy of transportation, enormous 
increases in farm productivity, lightning-fast flows of information and 
services across national borders, and advances in treating and 
preventing diseases and protecting the environment. Because I am 
committed to America's continued leadership in science and technology, I 
am proposing a Research Fund for America, from which many of our 
important investments will flow. It includes record increases for the 
National Institutes of Health, higher funding for the National Science 
Foundation, new resources to address global climate change, and a wide 
variety of investments in basic and applied research. These investments 
are vital; they help to create new knowledge, train more workers, spur 
new jobs and industries, address our health care challenges, strengthen 
our understanding of environmental problems, better educate our 
children, and maintain a strong national defense.
   Our anti-crime strategy is working. Serious crime is down five years 
in a row and, in 1996, we witnessed the largest drop in violent crime in 
35 years. But, because crime remains unacceptably high, we must go 
further. My budget expands our community policing (COPS) program, which 
is already putting 83,000 more police on the streets toward my goal of 
100,000 by the year 2000. The budget also proposes a new Community 
Prosecutors Initiative to help prosecutors prevent crimes from 
occurring, rather than simply prosecuting criminals after the fact. And 
it provides the necessary funds to prevent violence against women, to 
help States and Indian Tribes build prisons, and to address the growing 
law enforcement crisis on Indian lands. To boost our efforts to control 
illegal immigration, the budget provides the resources to strengthen 
border enforcement in the South and West, to remove illegal aliens, and 
to expand our efforts to verify whether newly hired non-citizens are 
eligible for jobs. To combat drug use, particularly among young people, 
my budget expands programs that stress treatment and prevention, law 
enforcement, international assistance, and interdiction. It continues to 
build on our innovative Drug Courts initiative, proposes School Drug 
Prevention Coordinators for our schools, sup

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ports local efforts that target drug-using offenders, expands drug 
testing, and strengthens our efforts to make our ports and borders more 
secure from drugs while disrupting drug trafficking organizations 
overseas.
   Most Americans are enjoying the fruits of our strong economy. But 
while many urban and rural areas are doing better, too many others have 
grown disconnected from our values of opportunity, responsibility, and 
community. Working with State and local governments and with the private 
sector, I am determined to help bring our distressed areas back to life, 
to replace despair with hope. My budget expands my national service 
program, giving more Americans the chance to serve their country and 
help solve problems at the local level while earning money for college. 
I am proposing to create more Empowerment Zones and Enterprise 
Communities that offer tax incentives and direct spending to encourage 
the kind of private investment that creates jobs, and to provide more 
capital for lending through my Community Development Financial 
Institutions program. My budget also expands opportunities for 
homeownership, provides more funds to enforce the Nation's civil rights 
laws, maintains our Government-to-Government commitment to Native 
Americans, and strengthens the partnership we have begun with the 
District of Columbia.
   Because America continues to have a tremendous stake in world 
affairs, my budget proposes the necessary funds to maintain national 
security, to conduct our diplomacy, to promote democracy and free 
markets abroad, and to increase exports. Last year, my Administration 
worked with Congress to increase international affairs spending. But, 
Congress faces an unfinished agenda to provide financial support for, 
and fulfill America's obligations to, a number of international 
organizations that benefit our economy and serve other objectives, 
including the International Monetary Fund (IMF), the United Nations 
system, and the multilateral development banks. Congress should continue 
to support the decisive action of the IMF as well as our leadership in 
that institution by providing the supplementary contingent IMF funding 
that the Administration has sought and replenishing the IMF's basic 
financial resources. Congress also should give the President traditional 
trade negotiating authority to help fuel our surging exports into the 
next century. To enhance national security, my budget maintains large-
scale funding to support the Middle East peace process, continues 
assistance to Bosnia to carry out the Dayton Accords, supports NATO 
expansion, and increases aid to the New Independent States of the former 
Soviet Union to support the development of democracy and free markets. I 
am also proposing a major initiative to provide critical, targeted 
assistance to African countries that are undertaking difficult economic 
reforms, and my budget increases counter-narcotics aid to Latin American 
countries and supports the Summit of the Americas.
   Our military serves as the backbone of our national security 
strategy, and I am committed to maintain a strong and capable military 
that protects our freedoms and our global leadership role as we approach 
the 21st Century. The budget continues the Administration's plan to 
complete the careful resizing of our military forces, to fully support 
military readiness, to strengthen quality of life programs for our armed 
forces, and to provide increased funding to modernize our forces as new 
technologies become available after the turn of the century. My budget 
reflects the recommendations of the Quadrennial Defense Review and of 
the Defense Department's recent Defense Reform Initiative to achieve a 
leaner, more efficient, and more cost-effective organization by 
improving management and business practices. To implement these 
improvements, the Defense Department will send legislation to Congress 
in conjunction with this budget, including a request for two more rounds 
of base closures and realignments.

Investing in the Common Good

   Our commitment to balance the budget, and to keep it in balance, will 
mean that the Administration and Congress must use taxpayer dollars as 
wisely as possible. If we are to continue funding Federal programs, they 
will have to show that they are reaching the goals set for them. That 
is, they will have to show that they are well-run and that they can 
produce results.

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   In 1993, I actively supported, and was eager to sign, the Government 
Performance and Results Act. With this budget, I am delighted to send 
Congress what the law envisioned--the first comprehensive, Government-
wide Performance Plan.
   In developing this budget, the Administration for the first time 
could rely on performance measures and annual performance goals that are 
now included in agency Annual Performance Plans. We have made a good 
start on the process that the Administration and Congress outlined in 
enacting the 1993 law.
   As we continue to implement this law, my Administration will focus 
more and more attention on how programs work, whether they are meeting 
their goals, and what we should do to make them better. We look forward 
to working with Congress on our shared goal of improving Government 
performance.

                                                      William J. Clinton
    
February 2, 1998