[Economic Report of the President (1997)]
[Administration of William J. Clinton]
[Online through the Government Printing Office, www.gpo.gov]

[DOCID: f:erp_p2._]
Economic Report of the President - - - - - - - - - - - - H. Doc. 105-002
[From the online service of the U.S. Government Printing Office]
[wais.access.gpo.gov]


ECONOMIC REPORT OF THE PRESIDENT



To the Congress of the United States:

Four years ago, we began a journey to change the course of the
American economy. We wanted this country to go into the 21st century as
a Nation in which every American who was willing to work for it could
have a chance--not a guarantee, but a real chance--at the American
dream. We have worked hard to achieve that goal, and today our economy
is stronger than it has been in decades.

THE ECONOMIC RECORD

The challenge we faced in January 1993 was to put the economy on a
new course of fiscal responsibility while continuing to invest in our
future. In the last 4 years, the unemployment rate has come down by
nearly a third: from 7.5 percent to 5.4 percent. The economy has created
11.2 million new jobs, and over two-thirds of recent employment growth
has been in industry/occupation groups paying above-median wages. Over
the past 4 years inflation has averaged 2.8 percent, lower than in any
Administration since John F. Kennedy was President. The combination of
unemployment and inflation is the lowest it has been in three decades.
And business investment has grown more than 11 percent per year--its
fastest pace since the early 1960s.
As the economy has grown, the fruits of that growth are being shared
more equitably among all Americans. Between 1993 and 1995 the poverty
rate fell from 15.1 percent to 13.8 percent--the largest 2-year drop in
over 20 years. Poverty rates among the elderly and among African-
Americans are at the lowest level since these data were first collected
in 1959. And real median family income has risen by $1,600--the largest
growth rate since the Administration of President Johnson.

THE ECONOMIC AGENDA

Our comprehensive economic agenda has helped put America's economy
back on the right track. This agenda includes:
 Historic Deficit Reduction. Since the 1992 fiscal year, the
Federal budget deficit has been cut by 63 percent--from $290
billion to $107 billion in fiscal 1996. As a percentage of the
Nation's gross domestic product, the deficit has fallen over the
same period from 4.7 percent to 1.4 percent, and it is now the
lowest it has been in more than 20 years. In 1992 the budget
deficit for all levels of government was larger in relation to
our economy than those of Japan and Germany were to theirs. Now
the deficit is smaller by that same measure than in any other
major industrialized economy. And this Administration has
proposed a plan that balances the budget by 2002, while
protecting critical investments in America's future.
 Investments in Education and Technology. Deficit reduction
remains a priority, but it is not an end in itself. Balancing
the budget by cutting investments in education, or by failing to
give adequate support to science and technology, could actually
slow economic growth. To succeed in the new global economy, our
children must receive a world-class education. Every child in
America should be able to read by the age of 8, log onto the
Internet by the age of 12, and receive at least 14 years of
quality education: 2 years of college should become as universal
as high school is today. And we must make sure that every child
who wants to go to college has the resources to do so.
 Expanding Markets. We have aggressively sought to expand
exports and open markets abroad. In the past 4 years we have
achieved two major trade agreements: the North American Free
Trade Agreement and the Uruguay Round accord of the General
Agreement on Tariffs and Trade, which established the World
Trade Organization. Members of the Asia-Pacific Economic
Cooperation forum and the proposed Free Trade Area of the
Americas have committed to establishing free trade among
themselves by 2020 and 2005, respectively. And we have opened
new markets abroad by signing more than 200 other important
trade agreements. As a result, U.S. exports have boomed, which
means higher wages for American workers in export industries--
often 13 to 16 percent higher than the rest of the workforce.
 Reforming Government. The strength of the American economy
lies in the energy, creativity, and determination of our
citizens. Over the past 4 years we have worked hard to create an
environment in which business can flourish. And as the private
sector has expanded, the Federal Government has improved its
efficiency and cost-effectiveness. We have energetically
reformed regulations in key sectors of the economy, including
telecommunications, electricity, and banking, as well as
environmental regulation. And we have reduced the size of the
Federal Government as a percentage of the workforce to the
smallest it has been since the 1930s.

CONTINUING TO CREATE AN ECONOMY FOR THE 21st CENTURY

America's workers are back at work and our factories are humming.
Once again, America leads the world in automobile manufacturing. Our
high-technology industries are the most competitive in the world.
Poverty is down and real wages are at last beginning to rise. And we
have laid the foundations for future long-term economic growth by
reducing the deficit and investing in education.
During the past 4 years, we have worked to prepare all Americans for
the challenges and opportunities of the new global economy of the 21st
century. We have worked to restore fiscal discipline in our government,
to expand opportunities for education and training for our children and
workers, to reform welfare and encourage work, and to expand the
frontiers of free trade. But there is more work to be done. We must
continue to provide our citizens with the tools to make the most of
their own lives so that the American dream is within the reach of every
American.


THE WHITE HOUSE

February 10, 1997