    [Public Papers of the Presidents of the United States: William J. Clinton (1999, Book I)]
    [February 17, 1999]
    [Pages 194-199]
    [From the U.S. Government Publishing Office www.gpo.gov]

    Remarks on Legislative Priorities for the Budget Surplus
    February 17, 1999

        She was great--give her a hand.
    [Applause] Great job. Well, thank you very much, Sharon. You did a great
    job, and I feel better knowing that you're out at NIH, doing great work
    there.
        I would like to thank Secretary Rubin
    and Commissioner Apfel and Senator
    Robb and Representative Baldwin. I'd like to thank Congressmen Levin and Hoyer for being here, and
    the members of the administration; all of the young people here from
    your various organizations. We have young people here from City Year and
    AmeriCorps. We have young people here from the University of Maryland,
    from the James MacGregor Burns leadership program. We have young people
    here who are doing other things with your lives, who consented to come.
        I want to talk a little today in greater specifics about the nature
    of the choice facing our country now. For 200 years, the test of each
    generation of Americans has been not simply how well they did in their
    own time but whether they left our country in better shape for future
    generations. Because of the size of the baby boom generation, to which
    the First Lady and I and a few others in this room belong, we have a

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    special responsibility to the generation represented by most of you in
    this room and by Sharon, in particular, as she spoke.
        We have rarely had both a clearer picture of the large challenges
    facing our future and more resources to meet them. And I don't just mean
    money although we do have a strong position in that budget. But our
    country is doing well. We have a lot of confidence. We have a lot of
    access to information. We have a lot of tools for dealing with our
    challenges that many of our predecessors did not have. Since we have a
    pretty good idea of what the challenges are and we have an extraordinary
    array of opportunities and resources to meet them, I would argue to you
    that we have an even greater obligation than our predecessors did to do
    just that.
        We now have embarked on a great debate as a result of our surplus,
    on the one hand, and the evident financial challenges to Social Security
    and Medicare on the other. We have clearly two different strategies
    through all the complexities for moving into the future: one offered by
    our administration and many members of our party and the Congress, on
    the one hand; and on the other, by the leaders of the majority party in
    Congress. We're debating how best to seize this moment, how best to
    provide a better future for you.
        This is a truly historic opportunity. And it is very important that
    as a people we choose wisely. It is a substantive debate. It is an
    honest debate. It is a debate worth having.
        Underlying all the details and all the complexities you will hear
    this year about how you do the accounting on the surplus, how we should
    increase the rate of return on Social Security, what exactly we should
    do on Medicare, how much money will be required in the future for
    defense, should we also be investing more in medical research and
    education and other things over the long run, what should be the size of
    the tax cut and who should get the tax cut--all of these questions are
    quite complex, particularly when you try to mesh them together in one
    plan. But underlying all of it, there is fundamentally a very simple
    choice: Will our first priority be spending the budget surpluses we have
    worked so hard to create on a terrifically appealing tax cut in the
    moment? Or will our first priority be investing whatever the necessary
    amount of the surplus is for at least the next 15 years to strengthen
    Social Security and Medicare, to cut taxes in a way that help people not
    so much today but to save for their own retirement and to pay down the
    national debt as much as we possibly can, so that we can guarantee
    longer term prosperity into the 21st century?
        That is really what the simple choice underlying all the details
    will be: What is our first priority? It's no secret what I think it
    should be. I think we should move forward with the economic strategy of
    the last 6 years, to put a priority on investing in our people and the
    future. I do not believe we should go back to a version of the policy
    that dominated the United States in the 12 years before this
    administration came to office and gave us a decade-plus of deficits and
    quadrupling the national debt and underinvestment in our future.
        The proposed new tax policy of the majority party in Congress, I
    believe, would spend too much of the surplus now and invest too little
    of it for tomorrow. I believe it would target the lion's share of the
    benefits away from the middle class who need the money the most to
    prepare for the future of their children and their own retirement. I
    believe it would reward consumption over savings, when we should be
    doing the reverse.
        Our plan would put priority on investing for the future. And I'd
    like to say, in defense of our plan, I think we ought to be at least
    entitled to the benefit of the doubt, based on the last 6 years.
        Seven years ago when I was running for President and going from
    college campus to college campus, there was a lot of anger, a lot of
    frustration. There were a lot of young people who felt that they had
    been betrayed by their parents' generation, because we had just allowed
    things in this country to get out of hand. The deficit was out of
    control, the debt had quadrupled, interest rates were high, unemployment
    was up, social problems were growing worse, and the division--the sense
    of anxiety and division in the country was intensifying. And there was
    really a lot of doubt about whether our country was up to meeting these
    challenges. I didn't doubt that very much because it seemed to me that
    it just simply required people in positions of responsibility to make a
    few clear decisions. And remember, in every complex debate the details
    really matter, but they only matter after you make the big, simple
    decisions.

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        We now have the longest peacetime expansion in our history; 18
    million new jobs, almost; wages are going up at nearly twice the rate of
    inflation. We have the highest homeownership in history: the lowest
    percentage of our people on welfare in history; the lowest recorded
    rates of our minority unemployment since we've been keeping those
    statistics, for about 27 years now; the lowest peacetime unemployment in
    our country since 1957. Last year, for the first time in three decades,
    as Senator Robb noted, the red ink turned to black with a surplus of $70
    billion. We project a slightly larger surplus this year, with more to
    come.
        Now, of course, over the next 15 or 20 years, there will be
    fluctuations that we can't predict exactly from year to year. If we have
    a recession, there will be fewer people paying taxes, and there will be
    more money going out to the unemployed. But the point that has to be
    emphasized is that the long-term projections are good because we have
    eliminated the permanent structural deficit. We now have a permanent,
    structural balanced budget and surplus.
        And that is what has brought us to this moment of decision, that and
    the evident financial crisis which will be imposed on Social Security
    when the baby boomers retire and on Medicare even sooner, because we're
    living longer and there's more technology and because the older you get,
    the more it costs to maintain a state of wellness.
        Now, I would say again, I realize that the path we have recommended,
    and the path that I personally passionately believe in, will not be the
    most popular one at first hearing. But I ask you to at least look at the
    last 6 years and say, maybe they ought to be given the benefit of the
    doubt.
        I was very moved when Sharon talked about being a nurse and learning
    from dealing with all different kinds of people that no one can predict
    what will happen to you in life. My mother was a nurse, and she used to
    tell me those stories over and over again. By pure coincidence, less
    than an hour before I came over here, I got word that a young woman
    whose family has been close to Hillary and me over the last several
    years, who has two young children, just found out that she has cancer.
    Now, she may be fine; there's wonderful treatment available; the tests
    are just being done. But the point is, a week ago such a thing would
    have never crossed her mind. She is the picture of health; she is a
    fitness fanatic; she has no conduct that would indicate propensity to
    develop it. These things happen.
        And the great dilemma for all of us, both in our family and our work
    lives and in our national life, is that we really have to always be
    planning for the future as if we're all going to be all right from now
    on, because as a country and as a people and in our families, most of us
    are, most of the time. But we also have to plan for a future in which we
    recognize our shared responsibility to care for one another and to give
    each other the chance to do well, or as well as possible when the
    accidents occur, when the diseases develop, when the unforeseen occurs,
    or when time takes its toll and we get older--which looks younger every
    day to me. [Laughter]
        And that is the question. This is--it's hard to imagine a more
    profound subject, really, with which to be dealing. Tammy was talking
    about her grandmother and her niece. This is something that affects us
    all, and as time and chance occurs, and we try to fulfill our
    responsibilities, we have to make it work out so that, at the end of the
    day, our families are stronger and our Nation is stronger and your
    future is brighter.
        Now, what I want you to think about today is what we should do as
    our first priority with this surplus. When I took office in 1993, we
    were spending 14 cents of every dollar you paid in taxes paying interest
    on the national debt--$200 billion--15 times more than we were spending
    on education, training, and employment services, just to make the
    interest payments. By the year 2014, when I took office, it was
    projected that we'd be spending 27 cents of every dollar you pay in
    taxes making interest payments on the debt--$1.28 trillion.
        Now, just by eliminating the deficit over the past 6 years and going
    into these surpluses, we now know that we'll be able to meet our Social
    Security obligations between now and 2032, because the Trust Fund will
    be available--actually, it will be in about 14 years that the taxes will
    not cover the payments on a monthly basis, but the Trust Fund, the
    savings account, will carry to 2032.
        Now, that's a lot of progress. But we've still got some real
    challenges. Number one, 2032 is not that far away, and when you're
    dealing with money this big, the sooner you start to deal with the
    problem, the easier it is to deal

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    with it. And the longer you take to deal with it, the more difficult,
    the more painful, the more expensive it will be and the more unpleasant
    our choices will be. Number two, we're still carrying a $3.7 trillion
    publicly held debt on our books.
        Now, I believe if we were to use the budget surpluses overwhelmingly
    to pay down the national debt for 15 years and target that money to
    Social Security and Medicare, it would dramatically improve your
    economic future, and it would be a great safety protection against the
    possibility of adverse economic developments beyond our borders which
    could affect us here. We can also save Social Security and Medicare. We
    can keep the promises that have already been made. We can provide
    substantial tax relief, targeted heavily to the middle-class families to
    save for retirement.
        You know, half the seniors in this country would be in poverty today
    if it weren't for Social Security. But the poverty rate among elderly
    women is still twice the overall poverty rate of our seniors. Women have
    longer life expectancies than men. They're more likely to--I expect NIH
    to change that, by the way, with all the investment we put in.
    [Laughter] They're more likely, therefore, to spend more years alone and
    more likely to be in poverty.
        We need to have a tax relief package that encourages people to save
    for their own retirement--you, now. And we can increase Government
    savings and do it in a way that provides tax relief that also increases
    private savings for your future, which I think is very, very important.
    And parenthetically, as you pay down the debt, that leads to lower
    interest payments for college loans, for mortgage loans, for car
    payments, for credit card payments. It leads to lower interest rates for
    business loans, which leads to higher investment and more jobs and a
    brighter future. So you get a two-for-one thing if you do it. But to be
    fair, the choice is, you have to give up some of the tax cut that the
    congressional majority would offer you today, which sounds nice.
        Now, my proposal is, save 62 percent of the surplus for Social
    Security for the next 15 years and invest a modest portion in the
    private sector so we can increase the rates of return on the Social
    Security Trust Fund. That takes us to 55 years for the soundness of the
    program.
        Next, I want to extend the life of Social Security to 75 years,
    which is where we have traditionally thought it should be, so that young
    people living in college today--college students today, if we do that,
    would be covered well into their nineties. I think we should do more to
    reduce poverty among elderly women. I think we should lift the limits on
    what people on Social Security can earn for themselves, without having
    to give back their benefits, in effect. We can do this if we make some
    other choices and work together. They're clear, and they're not
    complicated, really. They'll be somewhat unpopular, but we have to do
    some things to get this done.
        Second thing I want to do is to give another 15 percent of the
    surplus for 15 years to Medicare. If we do this, we can keep it safe and
    sound until 2020, and I hope we can go further. I think that we should,
    at a very minimum, cover the greatest growing need of seniors, which is
    for affordable prescription drugs. This is a big deal. Anybody involved
    in medical research will tell you that we can actually keep seniors out
    of the hospital and out of trouble, and therefore lower the aggregate
    costs of health care over the long run, if we can work Medicare out so
    we can absorb the front-end investment of a prescription drug benefit.
        And by the way, by the time your parents--those of you in your
    twenties--are on Medicare, it will be more true. And by the time you are
    there, it will be even more true. So the quicker we get to a health care
    program that allows people to manage their own health care and stay
    healthy and use whatever modern medicine develops to do so, the better
    off we're going to be.
        Now, the third thing I propose is that we have a tax cut of over
    $500 billion to create USA accounts, Universal Savings Accounts, that
    would be targeted to middle class families to help them save for their
    own retirement. Social Security alone is not enough for people to
    maintain their standard of living. Many people in the years where
    they're working hard and raising their kids and worrying about sending
    them to college do not have the resources to save. We want to make it
    possible through the tax cut to have more people save for their own
    retirement.
        So where are we with all this? The Republican leadership has said
    that generally it supports setting aside 62 percent of the surplus until
    we save Social Security. That's good, and I appreciate that. So we have
    national unity

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    on that issue. Then we can argue about the details, about what the best
    way to do that is. But that's where the agreement ends. And I think it's
    important--they still really haven't made a commitment to extend the
    life of the Social Security Trust Fund from 55 to 75 years, and you
    should demand that all of us do that. Everybody here in your twenties,
    you should demand that we not walk away from this session of Congress
    without extending the life to 75 years and doing something about the
    poverty rate among elderly women and letting our seniors get out from
    this earnings limitation.
        Now secondly, they do not agree that we should set aside 15 percent
    of the surplus to save Medicare and to pay down the national debt even
    further to lower future interest rates even more, to spur even more
    economic growth. I think this is a terrible mistake. That does not mean
    that we won't have to make some tough choices to reform the Medicare
    program. But we're going to be better off saving more of this surplus,
    paying down the debt more, and saving Medicare along with Social
    Security.
        Third, we differ on the tax relief. I believe that tax relief is
    appropriate. I don't think that the whole surplus should be retained by
    the Government, even for Social Security and Medicare. But when you've
    got a country with a savings rate as low as ours is and when you know
    right now that working families need to be saving more for their own
    retirement, it seems to me wrong to have a tax cut where a
    disproportionate amount of the benefits will go to people in very high
    income categories, who have taken care of their retirement fine and who
    have made a good deal of money in the stock market over the next 6
    years, and not target even greater tax relief to middle income families
    who need to do more to save for their own retirement.
        So those are the basic differences. But I just want to hammer to the
    young people here home the following things: You should want us to save
    Social Security and Medicare, not only for yourselves but for your
    families. You heard Tammy Baldwin talking about that. I can tell you
    that the baby boom generation is really worried, as I said in the State
    of the Union, that our retirement will cause undue burden on our
    children and on our children's ability to raise our grandchildren. So if
    you don't have to worry about that, that is also a direct financial
    benefit to you.
        If you don't have to worry about the medical bills of your parents
    because we save Medicare, it could be worth a lot more to you if your
    parents get sick than a short-term tax cut would today--a lot more.
        And if we continue this debt reduction and we go as far as Secretary
    Rubin said--just think about it--having public debt the smallest
    percentage of our economy that it's been since before we went into World
    War I. I'll tell you what that will mean in 15 years--just 15 years--and
    believe me, 15 years passes in the flash of an eye. What it means is
    that we will only be spending 2 cents of every dollar you pay in taxes
    on debt service.
        And 15 years from now, if the Congress wants to give more tax
    relief, let them do it; 15 years from now, if we're on the verge of a
    comprehensive cure for cancer and they want to give it to the National
    Institute of Health, let them do it; 15 years from now, if we have some
    other big crisis and we want to have a major investment in education, as
    we did when we got into the space race, let them do it. We should be
    willing to give some of these decisions to the future, instead of taking
    it now, when it looks easy but we'd be squandering a historic
    responsibility. I am quite willing to leave a decision like that to the
    future. A lot of you may be here then; I'd like for you to have the
    option to do what is necessary.
        So again I say, underneath all these complexities, there is a
    fundamentally simple choice. Should our first priority be an across-the-
    board tax cut now, of a size which will keep us from dedicating a lot of
    this surplus to Medicare and will reduce our ability to pay down the
    debt and keep down interest rates and keep up investments over the long
    run and tie the hands of future decisionmakers? Or should our priority
    be to save Social Security and Medicare and have targeted tax relief to
    help retirement savings be built up in middle class families that have
    not been doing it or that need more, in a way that maximizes our ability
    to pay down the debt?
        Some people in this room have heard me tell this story too many
    times, but I want to say it one more time. When I was a freshman in
    college and I took a course in the history of civilization, in the last
    lecture of the year, my professor at Georgetown said that the
    distinguishing characteristic of Western civilization was that we had
    always, at critical junctures,

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    been driven by what he called ``future preference,'' the idea that the
    future can be better than the present and that each individual and
    society as a whole have a personal, moral responsibility to make it so.
        Now, that's really what this is about. Their idea sounds simpler,
    sounds good, even sounds fair: 10 percent for everybody. Our idea will
    give you a stronger economy, will save Social Security and Medicare,
    will stabilize families, will strengthen the ability of the United
    States to lead the world, and will make you feel a whole lot better 15
    years from now when you're dealing with both the opportunities and the
    pain of time and chance that affects us all.
        You know, I see a few of the young people here today with ashes on
    their foreheads. Yesterday was Mardi Gras; for Christians, today is Ash
    Wednesday. For people all over the world, this is about to be springtime
    and a season of renewal. This is a time for renewal. I hope we make the
    right decision, mostly for your sake. And I believe we will.
        Thank you, and God bless you.

    Note: The President spoke at 3 p.m. in the East Room at the White House.
    In his remarks, he referred to Sharon Brigner, clinical nurse, National
    Institutes of Health, who introduced the President.