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

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                     I. THE BUDGET MESSAGE OF THE PRESIDENT

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                                                                    Table I-1.  Budget Totals
                                                                    (In billions of dollars)
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                            Estimates
                                         1999  ---------------------------------------------------------------------------------------------------    Total
                                        Actual    2000     2001     2002     2003     2004     2005     2006     2007     2008     2009     2010   2001-2010
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    Receipts.........................    1,827    1,956    2,019    2,081    2,147    2,236    2,341    2,440    2,559    2,676    2,785    2,917    24,202
    Outlays..........................    1,703    1,790    1,835    1,895    1,963    2,041    2,125    2,185    2,267    2,362    2,456    2,553    21,683
                                      ----------------------------------------------------------------------------------------------------------------------
    Total unified budget surplus.....      124      167      184      186      185      195      215      256      292      314      329      363     2,519

    Debt Reduction:
      Social Security solvency lock-       124      148      160      172      184      195      214      224      239      250      260      272     2,169
       box...........................
       Medicare solvency transfers...  .......  .......       15       13  .......  .......  .......       26       47       57       61       80       299
       Reserve for catastrophic        .......  .......  .......  .......  .......  .......  .......        4        5        7        8       11        35
       prescription drug coverage....
       On-Budget surplus.............        1       19        9        1        *        *        2        1        1        *        *        *        16
                                      ----------------------------------------------------------------------------------------------------------------------
       Total debt reduction..........      124      167      184      186      185      195      215      256      292      314      329      363     2,519
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    * $500 million or less.

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                       THE BUDGET MESSAGE OF THE PRESIDENT

      To the Congress of the United States:
      The 2001 Budget, which I am submitting to you with this message, is
    the fourth balanced budget of my Administration. This budget upholds my
    policy of fiscal discipline and promises new opportunity for our Nation.
      We have made great progress in the last seven years, rejecting the
    fiscal disarray of an earlier era and in its place, asserting a
    steadfast commitment to live within our means, balance the budget, and
    uphold fiscal discipline. As a result, we have created the conditions
    for unprecedented prosperity. The longest peacetime economic expansion
    in American history has produced more than 20 million new jobs.
    Unemployment has hit its lowest level in a generation. Today, more
    Americans own their own homes than ever before in our Nation's history.
      Our success in reversing what once seemed to be uncontrollable growth
    in the Federal budget deficit has created more than prosperity. We have
    restored to America a spirit of purpose and confidence. This is a rare
    moment in history. Few nations are blessed with a combination of
    economic prosperity and social stability at home and with the security
    of a relatively peaceful world. It is time to make the most of this
    moment of promise to extend prosperity to all corners of our Nation.
      My first budget of the new century is built upon a commitment to
    expanding opportunity, promoting responsibility, and building community.
    It includes my New Markets Initiative, which relies on public and
    private sector cooperation to spur economic development in areas of our
    Nation that have not yet fully benefited from this wave of prosperity.
    It includes an expansion of the Earned Income Tax Credit to lift more
    hard-pressed working families out of poverty. It expands health
    insurance coverage to more uninsured low-income children and extends
    this coverage to their hard-working parents.
      Because education is fundamental to creating opportunity, my budget
    contains resources to prepare the next generation for the future with
    new and expanded efforts to improve the quality of our schools, prepare
    our students for college, and make college more accessible. It includes
    efforts to narrow the digital divide, the gap that separates those who
    have access to information technology and those who do not, so that all
    will be equipped with the technological tools they need to succeed. It
    also includes a science and technology initiative to lay the foundation
    for new scientific breakthroughs.
      This budget responds to the pressing needs of today and builds an
    America of the future by making our Nation debt free by 2013. To be
    prepared for the retirement of the baby boom generation, my budget also
    provides a framework to extend the life of the Social Security and
    Medicare trust funds, while modernizing Medicare with a needed
    prescription drug benefit.
      This budget uses the same straightforward approach of relying on
    conservative assumptions, as have all the budgets of my Administration.
    This conservative approach has built confidence in our budgets, because
    when unforeseen results have materialized, an inevitable development in
    forecasting, they have always brought good news. In turn, reversing
    recent trends, my 2001 Budget builds on the tradition of straightforward
    budgets to meet the pressing needs of today in a balanced plan that
    adheres to the principles of fiscal discipline and debt reduction. This
    budget also maintains a strict set of budget rules upholding our long
    commitment to fiscal discipline, which has sustained the conditions for
    our economy to flourish.

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      The 2001 Budget continues to project that the Federal budget will
    remain in surplus for many decades to come, provided that a responsible
    fiscal policy holds course, to foster sustained economic growth. Our
    challenge now, in this era of surplus, is to make balanced choices to
    use our resources to meet the pressing needs of today, and the needs of
    generations to come.

    Building on the Success of Our Fiscal Discipline

      When I took office in 1993, the current strength of our economy seemed
    beyond possibility. At that point, both the Federal budget deficit and
    the national debt had exploded, threatening our economic future. The
    costs of massive Federal borrowing drove interest rates up, incomes were
    stagnant for all but the most well off, and the economy had barely grown
    during the prior four years. The Nation needed a new course, and we
    worked hard to secure the passage of legislation, with the support of
    Democrats in Congress, to get the economy moving again.
      My three-part economic strategy, built upon reducing the deficit,
    investing in the American people, and engaging the international economy
    yielded results. The budget deficit quickly began to drop from its peak
    of $290 billion, and in 1997, we pressed ahead with our deficit
    reduction efforts as Congress passed the Balanced Budget Act on a
    bipartisan basis to finish the job. Four years ahead of schedule, the
    budget reached balance and is projected this year to produce its third
    surplus in a row. We have started to pay down the national debt and are
    on a path to make the Nation debt free by 2013 for the first time since
    1835.
      Throughout the past seven years, my Administration has been committed
    to creating opportunity for all Americans, demanding responsibility from
    all Americans, and strengthening the American community. The crime rate,
    which had tripled during the previous three decades, continues to fall
    and crime is down in every region of the Nation. We have reformed the
    welfare system, and more than seven million Americans in the past seven
    years have made the transition from welfare to work.
      Most of all, the prosperity and opportunity of our time offers us a
    great responsibility--to take action to ensure that Social Security is
    there for the elderly and the disabled, while ensuring that it not place
    a burden on our children, that the life of Medicare is extended for
    future generations, and that we modernize Medicare with a needed
    prescription drug benefit. If we continue to follow sound fiscal policy,
    we can provide for the future, produce a balanced tax cut and meet the
    needs of today, while sustaining the conditions that have brought us
    this current wave of prosperity. All this can be done, but balanced and
    sound fiscal policy is the key.

    Improving Performance Through Better Management

      At the start of this Administration, the Vice President and I set out
    to create a Government that works better, costs less, and gets results
    Americans care about. We believe that with better stewardship, the
    Government can better achieve its mission and improve the quality of
    life for all Americans. The success of these efforts is reflected in the
    significant changes of the past seven years in the way Government does
    business.
      We have streamlined Government, cutting the civilian Federal work
    force by 377,000, giving us the smallest work force in 39 years. We have
    done more than just reduce or eliminate hundreds of Federal programs and
    projects. We have also empowered government employees to cut red tape,
    and used partnerships to get results.
      While we have made real progress, there is still much work to do. We
    are forging ahead with new efforts to improve the quality of the service
    that the Government offers its customers. My Administration has
    identified its highest priorities--24 Priority Management Objectives
    listed in this budget, that will receive heightened attention to ensure
    positive changes in the way Government works. It is a mark of our
    success that in early 2000, we were able to remove last year's number
    one objective from the list: Manage the Year 2000 (Y2K) Computer

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    Problem. Due largely to the efforts of Federal employees and the
    leadership provided by my Council on Year 2000 Conversion, the Federal
    Government's Y2K efforts were, beyond all expectation, remarkably
    trouble free. We will continue to move ahead to address other
    priorities, including modernizing student aid delivery, implementing IRS
    reforms, and strengthening the management of Health Care Financing
    Administration, which oversees Medicare.
      I believe the steps we have taken to change and improve the way
    Government works have also changed the way Americans view their
    Government, increasing the confidence and trust of the American public.
    It is our job to keep at this task, so that the Federal Government
    continues to improve its performance and the American public is better
    served. I am determined that we will do more to solve the very real
    management challenges before us.

    Strengthening our Nation in the 21st Century

      Education, in our competitive global economy, has become the dividing
    line between those who are able to move ahead and those who lag behind.
    For this reason, I am committed to ensuring that we have a first-rate
    system of education and training in place for Americans of all ages.
    Over the last seven 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 another chance at
    education and training, or a chance to improve or learn new skills, can
    do so. My budget builds on the commitment to make college more
    affordable by expanding the tax credits for higher education and
    increasing Pell Grants and other college aid beyond the record levels
    already reached. It promotes smaller learning environments in high
    schools and invests in reducing class size by recruiting and preparing
    thousands more teachers and building thousands more classrooms, as well
    as providing for urgent and essential school repairs.
      My budget includes significant increases to expand access to after-
    school and other extended learning time opportunities, a central element
    of my accountability agenda to help children, especially in the poorest
    communities, reach challenging academic standards while supporting
    efforts to demand more from schools and support them in return. It
    promotes efforts to recruit teachers in high-poverty areas and includes
    a peer review initiative to help school districts raise teacher
    standards and teacher pay. The budget proposes improving school
    accountability by holding States, districts and schools accountable for
    results by providing resources to identify and turn around the worst-
    performing schools, and incentives to reward States that do the most to
    improve student performance and close the achievement gap. It invests in
    programs to help raise the educational achievement of Latino students.
    And my budget supports efforts to narrow the digital divide by expanding
    resources for technology centers to make computers accessible in low-
    income community areas.
      During the past seven years, we have taken many steps to help working
    families, and we continue that effort with this budget. 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 access to 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 to
    address the health needs of a family member.
      I am proposing a significant expansion of the Earned Income Tax Credit
    to provide support to America's hard working, low-income families,
    especially larger families who are more likely to be poor than families
    with only one or two children. My budget also significantly increases
    21st Century Learning Community Centers and expands after-school
    learning time. It makes child care more affordable by expanding tax
    credits for middle-income families and for businesses that provide child
    care services to their employees,

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    by assisting parents who want to attend college meet their child care
    needs, as well as making a child care tax credit available to parents
    who choose to stay at home to raise a young child. My budget proposes to
    create an Early Learning Fund and builds on our expansion of the
    successful Head Start program to help meet the goal of serving one
    million children by 2002. And it promotes responsible fatherhood by
    proposing tough new measures to ensure that all parents who can afford
    to pay child support do so, while providing support to increase the
    employment earnings and child support payments of low-income fathers. My
    budget includes efforts to increase access to food stamps for the
    working poor, in part by proposing that low-income working families, who
    need efficient transportation to get to work, be permitted to own a
    modest vehicle and retain food stamp eligibility. And, it proposes
    resources to provide health care to legal immigrant children, to restore
    Supplemental Security Income benefits to legal immigrants with
    disabilities, and to restore food stamp benefits to legal immigrants in
    families with eligible children.
      We have continued to improve health care for millions of Americans.
    Since the establishment of the State Children's Health Insurance Program
    in 1997, two million children have enrolled in programs across all 50
    States. I am proposing a significant expansion of this successful
    program to extend health coverage to more children in hard working, low-
    income families. My budget also extends this coverage to their parents,
    low-income working adults who lack health insurance, which will help
    increase the enrollment of their children by enabling entire families to
    receive coverage through the same program. My budget contains other
    significant incentives to increase access to affordable health care,
    including tax credits for small businesses and a provision to allow
    hundreds of thousands of Americans aged 55 to 65 to purchase Medicare
    coverage.
      My budget puts forth a plan that extends Medicare solvency to at least
    2025, respects fiscal discipline, and eliminates the national debt. My
    plan will modernize Medicare with a needed drug benefit, expand access
    to preventative benefits, and improve Medicare management. I intend to
    keep pressing ahead and working with Congress to enact essential patient
    protections including emergency room access and the right to see a
    specialist. By Executive Order, I have extended these rights to 85
    million Americans covered by Federal health plans, including Medicare
    and Medicaid beneficiaries and Federal employees.
      Most Americans are enjoying the fruits of our strong economy, yet we
    must do more to bring this prosperity to all corners of our great
    Nation. We must use this moment of promise to spread the values of
    community, opportunity, and responsibility, and to help create the
    conditions for all to share in our prosperity. My New Markets
    Initiative, an expanded approach built upon the same public-private
    cooperation at the center of last year's plan, will provide tax credit
    and loan guarantee incentives to stimulate tens of billions of dollars
    in new private investment in distressed rural and urban areas. It will
    build a network of private investment institutions to funnel credit,
    equity, and technical assistance into businesses in America's untapped
    markets, and provide the expertise to targeted small businesses that
    will allow them to use investment to grow. I am also proposing to expand
    the number of Empowerment Zones, which provide 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 includes significant
    funding increases for Native American communities to help this
    generation and future generations receive greater opportunities. It
    provides additional funds to enforce the Nation's civil rights laws, and
    strengthens the partnership we have begun with the District of Columbia.
    In addition, my budget proposes an $11 billion package for farmers in
    need and to help mend the farm safety net by providing assistance when
    crop prices are low.
      Our anti-crime strategy is working. Serious crime has fallen without
    interruption, and the murder rate is at its lowest point in three
    decades. Building on our successful community policing (COPS) program
    that is helping communities fund 100,000 cops on the beat, the 21st
    Century Policing initiative

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    was enacted last year to put us on track to fund new anti-crime
    technology and 50,000 more police. This year, I am launching the largest
    gun enforcement initiative ever, adding funds to hire 500 new ATF
    agents, 1,000 State and local gun prosecutors and funds for smart gun
    technology. The budget also provides funds to prevent violence against
    women, and to address the growing law enforcement crisis on Indian
    lands. To boost our efforts to control illegal immigration, the budget
    provides resources to strengthen enforcement, particularly on the
    Southwest and Northern borders, and to remove illegal aliens. To combat
    drug use, particularly among young people, my budget expands programs
    that stress treatment and prevention, law enforcement, international
    assistance, and interdiction.
      During the past seven years, I have sought to strengthen science and
    technology investments in order to serve many of our broader goals for
    the Nation in the economy, education, health care, the environment, and
    national defense. Building on the balanced portfolio of basic and
    applied research in the 21st Century Research Fund, my budget includes a
    Science and Technology Initiative which places special emphasis on high-
    priority, long-term basic research, including nanotechnology, the
    manipulation of matter at the atomic and molecular level, which offers
    the promise that medical science may one day be able to detect cancerous
    tumors when they are comprised of only a few cells. My budget also
    increases resources for the Information Technology research and
    development program to invest in long-term research in computing and
    communications. It will accelerate development of extremely fast
    supercomputers to support civilian research, enabling experts to develop
    life-saving drugs, provide earlier tornado warnings, and design more
    fuel-efficient, safer automobiles. The budget provides strong support
    for the Nation's two largest sources of civilian basic research funding
    for universities: the National Science Foundation and the National
    Institutes of Health.
      The Nation does not have to choose between a strong economy and a
    clean environment. The past seven years are proof that we can have both.
    We have set tough new clean air standards for soot and smog that will
    prevent up to 15,000 premature deaths a year. We have set new food and
    drinking water safety standards and have accelerated the pace of
    cleanups of toxic Superfund sites. We expanded our efforts to protect
    tens of millions of acres of public and private lands, including
    Yellowstone National Park, Florida's Everglades, and California's
    redwoods. Led by the Vice President, the Administration reached an
    international agreement in Kyoto that calls for cuts in greenhouse gas
    emissions. My budget significantly expands support for the environment,
    by establishing dedicated funding and increasing resources for the
    historic interagency Lands Legacy initiative to preserve the Nation's
    natural and historic treasures. My budget also supports the Clean Energy
    initiative to reduce the threat of global warming, and the Greening the
    Globe initiative to save tropical and other forests around the globe. It
    provides resources to support farm conservation to upgrade water
    quality, the Clean Water Action plan to clean up polluted waterways, and
    climate change technology efforts to increase energy-efficient
    technologies and renewable energy to strengthen our economy while
    reducing greenhouse gases.
      In the past year, America's leadership was essential to the success of
    the NATO alliance in halting the ethnic cleansing of Kosovo's ethnic
    Albanians and containing the risk of wider war at the doorstep of our
    allies. The United States has played a critical role in the strides made
    toward lasting peace in Northern Ireland, the Middle East, and Sierra
    Leone. The United States has worked to detect and counter terrorist
    threats and continue efforts with Russia and other former Soviet nations
    to halt the spread of dangerous weapons materials. My budget seeks to
    build on these efforts, proposing funding to build a democratic society
    and stronger economy in Kosovo, initiatives to further protect our men
    and women overseas, and a 2000 emergency supplemental to provide
    critical assistance to the Government of Colombia in its fight against
    narcotics traffickers. My budget also proposes funding to promote
    international family planning, contain the global spread of AIDS,
    promote debt forgiveness to help people in the world's poorest

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    countries join the global economy, and promote trade by opening global
    markets.
      The Armed Forces of the United States serve as the backbone of our
    national security strategy. As it did successfully last year in Kosovo,
    the military must be in a position to protect our national security
    interests and guard against the major threats to U.S. security. These
    include regional dangers, such as cross-border aggression; the
    proliferation of the technology of weapons of mass destruction;
    transnational dangers, such as the spread of illegal drugs and
    terrorism; and, direct attacks on the U.S. homeland from
    intercontinental ballistic missiles or other weapons of mass
    destruction. To ensure that the military can fulfill this mission, I
    made a major commitment last year to maintain our military readiness,
    which this budget builds upon with additional resources to ensure that
    the services can meet required training standards, maintain equipment in
    top condition, recruit and retain quality personnel, and procure
    sufficient spare parts and other equipment. To help improve the quality
    of life and strengthen the Department's ability to attract and retain
    quality individuals, this budget includes a major initiative to reduce
    servicemembers' out-of-pocket costs for off-base housing. In addition,
    this budget provides resources for the Department of Defense and other
    agencies to combat emerging threats, including terrorism and weapons of
    mass destruction, and to provide for critical infrastructure protection.
    It provides funds to support counter-narcotics efforts, including a 2000
    supplemental to increase assistance to the Government of Colombia in
    their fight against narcotics traffickers. It also provides additional
    funding for contingency operations in Southwest Asia, Bosnia, and
    Kosovo.

    Building Prosperity for the Future

      This is a rare moment in American history. Never before has our Nation
    enjoyed so much prosperity, at a time when social progress continues to
    advance and our position as the global leader is secure. Today, we are
    well prepared to make the choices that will shape our Nation's future
    for decades to come.
       By reversing the earlier trend of fiscal irresponsibility, balancing
    the budget, and producing a historic surplus, we have restored our
    national spirit and produced the resources to help opportunity and
    prosperity reach all corners of this Nation. We have it within our reach
    today, by making the right choices, to offer the promise of prosperity
    to generations of Americans to come. If we keep to the path of fiscal
    discipline, we can build a foundation of prosperity for the Nation's
    future.
       My plan to extend the solvency of Social Security and Medicare allows
    the United States to become debt-free in the next 13 years, for the
    first time since 1835. Eliminating the debt will strengthen our economy,
    devote resources to Social Security, and prepare us to meet the
    challenges of the aging of America. Through fiscal discipline and wise
    choices we can extend the life of Social Security to the middle of the
    century, extend the solvency of Medicare until 2025, and modernize
    Medicare with a needed prescription drug benefit.

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      By continuing to maintain discipline, we can provide for the aging of
    America and for the investments of the future--including education, the
    environment, research and development, and defense--which are central to
    our economic growth, health, and national security. By making choices
    that respect fiscal discipline, we can make room to provide both for a
    balanced tax cut and for investments that will help this Nation stay
    strong in the future.
      This new century is filled with promise, for we live at a remarkable
    time. By making wise choices, we have it within our power to extend the
    same promise and prosperity to generations to come.

                                                          William J. Clinton

                                       February 7, 2000