[Congressional Record Volume 141, Number 28 (Monday, February 13, 1995)]
[Senate]
[Pages S2566-S2568]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


  ECONOMIC REPORT OF THE PRESIDENT--MESSAGE FROM THE PRESIDENT--PM 18

  The PRESIDING OFFICER laid before the Senate the following message 
from the President of the United States, together with an accompanying 
report; which was referred to the Joint Economic Committee:

To the Congress of the United States:
  Two years ago I took office determined to improve the lives of 
average American families. I proposed, and the Congress enacted, a new 
economic strategy to restore the American dream. Two years later, that 
strategy has begun to pay off.
  Together we have created an environment in which America's private 
sector has been able to produce more than 5 million new jobs. 
Manufacturing employment grew during each month of 1994--the first time 
that has happened since 1978. We have cut the deficit in 
[[Page S2567]] the Federal budget for 3 years running, we have kept 
inflation in check, and, based on actions I have already taken, the 
Federal bureaucracy will soon be the smallest it has been in more than 
3 decades. We have opened up more new trade opportunities in just 2 
years than in any similar period in a generation. And we have embarked 
on a new partnership with American industry to prepare the American 
people to compete and win in the new global economy.
  In short, America's economic prospects have improved considerably in 
the last 2 years. And the economy will continue to move forward in 
1995, with rising output, falling deficits, and increasing employment. 
Today there is no country in the world with an economy as strong as 
ours, as full of opportunity, as full of hope.
  Still, living standards for many Americans have not improved as the 
economy has expanded. For the last 15 years, those Americans with the 
most education and the greatest flexibility to seek new opportunities 
have seen their incomes grow. But the rest of our work force have seen 
their incomes either stagnate or fall. An America that, in our finest 
moments, has always grown together, now grows apart.
  I am resolved to keep the American dream alive in this new economy. 
We must make it possible for the American people to invest in the 
education of their children and in their own training and skills. This 
is the essence of the New Covenant I have called for--economic 
opportunity provided in return for people assuming personal 
responsibility. This is the commitment my Administration made to the 
American people 2 years ago, and it remains our commitment to them 
today.
                 the administration's economic strategy

  Our economic strategy has been straightforward. First, we have 
pursued deficit reduction to increase the share of the Nation's 
economic resources available for private investment. At the same time 
we have reoriented the government's public investment portfolio with an 
eye toward preparing our people and our economy for the 21st century. 
We have cut yesterday's government to help solve tomorrow's problems, 
shrinking departments, cutting unnecessary regulations, and ending 
programs that have outlived their usefulness. We have also worked to 
expand trade and to boost American sales to foreign markets, so that 
the American people can enjoy the better jobs and higher wages that 
should result from their own high-quality, high-productivity labor. 
Having fixed the fundamentals, we are now proposing what I call the 
Middle Class Bill of Rights, an effort to build on the progress we have 
made in controlling the deficit while providing tax relief that is 
focused on the people who need it most.


                     putting our own house in order

  The first task my Administration faced upon taking office in January 
1993 was to put our own economic house in order. For more than a 
decade, the Federal Government had spent much more than it took in, 
borrowing the difference. As a consequence, by 1992 the Federal deficit 
had increased to 4.9 percent of gross domestic product--and our country 
had gone from being the world's largest creditor Nation to being its 
largest debtor.
  As a result of my Administration's deficit reduction package, passed 
and signed into law in August 1993, the deficit in fiscal 1994 was $50 
billion lower than it had been the previous year. In fact, it was about 
$100 billion lower than had been forecast before our budget plan was 
enacted. Between fiscal 1993 and fiscal 1998, our budget plan will 
reduce the deficit by $616 billion. Our fiscal 1996 budget proposal 
includes an additional $81 billion in deficit reduction through fiscal 
2000.


            preparing the american people to compete and win

  As we were taking the necessary steps to restore fiscal discipline to 
the Federal Government, we were also working to reorient the 
government's investment portfolio to prepare our people and our economy 
for 21st-century competition.
  Training and Education. In our new information-age economy, learning 
must become a way of life. Learning begins in childhood, and the 
opportunity to learn must be available to every American child--that is 
why we have worked hard to expand Head Start.
  With the enactment of Goals 2000 we have established world-class 
standards for our Nation's schools. Through the School-to-Work 
Opportunities Act we have created new partnerships with schools and 
businesses to make sure that young people make a successful transition 
to the world of work. We have also dramatically reformed the college 
loan program. Americans who aspire to a college degree need no longer 
fear that taking out a student loan will one day leave them 
overburdened by debt.
  Finally, we are proposing to take the billions of dollars that the 
government now spends on dozens of training programs and make that 
money directly available to working Americans. We want to leave it up 
to them to decide what new skills they need to learn--and when--to get 
a new or better job.
  New Technology. Technological innovation is the engine driving the 
new global economy. This Administration is committed to fostering 
innovation in the private sector. We have reoriented the Federal 
Government's investment portfolio to support fundamental science and 
industry-led technology partnerships, the rapid deployment and 
commercialization of civilian technologies, and funding for technology 
infrastructure in transportation, communications, and manufacturing.
  A Middle Class Bill of Rights. Fifty years ago the GI Bill of Rights 
helped transform an economy geared for war into one of the most 
successful peacetime economies in history. Today, after a peaceful 
resolution of the cold war, middle-class Americans have a right to move 
into the 21st century with the same opportunity to achieve the American 
dream.
  People ought to be able to deduct the cost of education and training 
after high school from their taxable incomes. If a family makes less 
than $120,000 a year, the tuition that family pays for college, 
community college, graduate school, professional school, vocational 
education, or worker training should be fully deductible, up to $10,000 
a year. If a family makes $75,000 a year or less, that family should 
receive a tax cut, up to $500, for every child under the age of 13. If 
a family makes less than $100,000 a year, that family should be able to 
put $2,000 a year, tax free, into an individual retirement account from 
which it can withdraw, tax free, money to pay for education, health 
care, a first home, or the care of an elderly parent.


       expanding opportunity at home through free and fair trade

  Our efforts to prepare the American people to compete and win in the 
new global economy cannot succeed unless we succeed in expanding trade 
and boosting exports of American products and services to the rest of 
the world. That is why we have worked so hard to create the global 
opportunities that will lead to more and better jobs at home. We won 
the fight for the North American Free Trade Agreement (NAFTA) and the 
Uruguay Round of the General Agreement on Tariffs and Trade (GATT).
  Our commitment to free and fair trade goes beyond NAFTA and the GATT. 
Last December's Summit of the Americas set the stage for open markets 
throughout the Western Hemisphere. The Asia-Pacific Economic 
Cooperation (APEC) group is working to expand investment and sales 
opportunities in the Far East. We firmly believe that economic 
expansion and a rising standard of living will result in both regions, 
and the United States is well positioned both economically and 
geographically to participate in those benefits.
  This Administration has also worked to promote American products and 
services to overseas customers. When foreign government contracts have 
been at stake, we have made sure that our exporters had an equal 
chance. Billions of dollars in new export sales have been the result, 
from Latin America to Asia. And these sales have created and 
safeguarded tens of thousands of American jobs.


         health care and welfare reform: the unfinished agenda

  In this era of rapid change, Americans must be able to embrace new 
economic opportunities without sacrificing their personal economic 
security. My Administration remains committed to providing health 
insurance coverage for every American and containing 
[[Page S2568]] health care costs for families, businesses, and 
governments. The Congress can and should take the first steps toward 
achieving these goals. I have asked the Congress to work with me to 
reform the health insurance market, to make coverage affordable for and 
available to children, to help workers who lose their jobs keep their 
health insurance, to level the playing field for the self-employed by 
giving them the same tax treatment as other businesses, and to help 
families provide long-term care for a sick parent or a disabled child. 
We simply must make health care coverage more secure and more 
affordable for America's working families and their children.
  This should also be the year that we work together to end welfare as 
we know it. We have already helped to boost the earning power of 15 
million low-income families who work by expanding the earned income tax 
credit. With a more robust economy, many more American families should 
also be able to escape dependence on welfare. Indeed, we want to make 
sure that people can move from welfare to work by giving them the tools 
they need to return to the economic mainstream. Reform must include 
steps to prevent the conditions that lead to welfare dependence, such 
as teen pregnancy and poor education, while also helping low-income 
parents find jobs with wages high enough to lift their families out of 
poverty. At the same time, we must ensure that welfare reform does not 
increase the Federal deficit, and that the States retain the 
flexibility they need to experiment with innovative programs that aim 
to increase self-sufficiency. But we must also ensure that our reform 
does not punish people for being poor and does not punish children for 
the mistakes of their parents.


                         reinventing government

  Taking power away from Federal bureaucracies and giving it back to 
communities and individuals is something everyone should be able to 
support. We need to get government closer to the people it is meant to 
serve. But as we continue to reinvent the Federal Government by cutting 
regulations and departments, and moving programs to the States and 
communities where citizens in the private sector can do a better job, 
let us not overlook the benefits that have come from national action in 
the national interest: safer foods for our families, safer toys for our 
children, safer nursing homes for our elderly parents, safer cars and 
highways, and safer workplaces, cleaner air and cleaner water. We can 
provide more flexibility to the States while continuing to protect the 
national interest and to give relief where it is needed.
  The New Covenant approach to governing unites us behind a common 
vision of what is best for our country. It seeks to shift resources and 
decisionmaking from bureaucrats to citizens, injecting choice and 
competition and individual responsibility into national policy. In the 
second round of reinventing government, we propose to cut $130 billion 
in spending by streamlining departments, extending our freeze on 
domestic spending, cutting 60 public housing programs down to 3, and 
getting rid of over 100 programs we do not need. Our job here is to 
expand opportunity, not bureaucracy--to empower people to make the most 
of their own lives. Government should be leaner, not meaner.


                          the economic outlook

  As 1995 begins, our economy is in many ways as strong as it has ever 
been. Growth in 1994 was robust, powered by strong investment spending, 
and the unemployment rate fell by more than a full percentage point. 
Exports soared, consumer confidence rebounded, and Federal 
discretionary spending as a percentage of gross domestic product hit a 
30-year low. Consumer spending should remain healthy and investment 
spending will remain strong through 1995. The Administration forecasts 
that the economy will continue to grow in 1995 and that we will remain 
on track to create 8 million jobs over 4 years.
  We know, nevertheless, that there is a lot more to be done. More than 
half the adult work force in America is working harder today for lower 
wages than they were making 10 years ago. Millions of Americans worry 
about their health insurance and whether their retirement is still 
secure. While maintaining our momentum toward deficit reduction, 
increased exports, essential public investments, and a government that 
works better and costs less, we are
 committed to providing tax relief for the middle-class Americans who 
need it the most, for the investments they most need to make.

  We live in an increasingly global economy in which people, products, 
ideas, and money travel across national borders at lightning speed. 
During the last 2 years, we have worked hard to help our workers take 
advantage of this new economy. We have worked to put our own economic 
house in order, to expand opportunities for education and training, and 
to expand the frontiers of free and fair trade. Our goal is to create 
an economy in which all Americans have a chance to develop their 
talents, have access to better jobs and higher incomes, and have the 
capacity to build the kind of life for themselves and their children 
that is the heart of the American dream.
                                                  William J. Clinton.  
  The White House, February 13, 1995.

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