    [Public Papers of the Presidents of the United States: William J. Clinton (1999, Book I)]
    [June 28, 1999]
    [Pages 1025-1027]
    [From the U.S. Government Publishing Office www.gpo.gov]

    Remarks on the Federal Budget Surplus and an Exchange With Reporters
    June 28, 1999

        The President. Good morning. Six years ago we put in place a new
    economic strategy for the information age. We put our fiscal house in
    order; we invested in our people; we expanded trade in American goods
    and services. By making tough decisions, America has reaped rich
    rewards. We built the longest peacetime expansion in our history.
        Last week we learned that in the first 3 months of 1999, the economy
    grew at a 4.3 percent rate, with very low inflation. With record numbers
    of new homes being built, paychecks increasing, hundreds of thousands of
    young people getting new help to go to college, new businesses opening
    their doors, a surging market on Wall Street, we are truly widening the
    circle of opportunity in America.
        I'm here to report to the American people on more good news about
    our budget. As required by law, my administration is releasing the
    midsession review of the budget. Here is what we have found.
        When I took office, the National Government had a record deficit of
    $290 billion, projected to increase indefinitely. Last year, for the
    first time in 29 years, we balanced the budget. In January this year, we
    projected a surplus for this year of $79 billion. Today I am pleased to
    report that, in fact, the budget surplus for 1999 will be $99 billion,
    the largest as a share of our economy since 1951. For next year, we now
    project a budget surplus of $142 billion, a surplus of $5 billion not
    counting the receipts from Social Security. In fact, improvements in the
    outlook since February have added $179 billion to the projected budget
    surplus over 5 years, half a trillion over 10 years, and a trillion over
    15 years.
        Fiscal discipline does bring real results. I want to thank my
    economic team for all the work that they have done. Lower interest rates
    have led to a boom in business investment, to lower mortgage rates, to
    lower credit card rates, to lower student loan rates. Fiscal discipline
    has widened opportunity and created hope for all working people in our
    country. Now we have a chance to do even more, to use the fruits of our
    prosperity today to strengthen our prospects for tomorrow, indeed, for
    tomorrows well into the 21st century.
        In my State of the Union Address, I set out a plan for how to use
    the budget surplus. Today,

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    in light of the unexpectedly large surplus, I am proposing to build on
    that budget framework with a new approach that honors our values, meets
    our commitments, and makes it possible to reach bipartisan agreement on
    a budget for America.
        First, we can strengthen our commitment to use the bulk of the
    surplus to save Social Security and Medicare and to pay down the
    national debt. The new budget numbers mean that we will run a surplus in
    the non-Social Security part of the budget, starting next year, much
    earlier than previously expected. I am pleased that Republicans and
    Democrats in Congress have agreed to use the Social Security surpluses
    to reduce the national debt. But we must go forward and achieve an even
    stronger lockbox than one proposed by Congress. Social Security taxes
    should be saved for Social Security, period. Let's finish the job and
    work to extend the solvency of Social Security. I'm encouraged that
    Republicans and Democrats on the House Ways and Means Committee are
    meeting together to try to accomplish this goal.
        Second, our new large surplus will help us to strengthen and
    modernize Medicare while providing a prescription drug benefit. Tomorrow
    I will reveal the details of my plan to modernize Medicare. The steps I
    will propose to use the surplus will increase Medicare's solvency for at
    least 25 years. By taking additional measures to increase competition,
    combat fraud, and reduce costs, we can provide a new prescription drug
    benefit and still pay down our national debt.
        Third, our new budget framework will use part of the surplus to
    provide substantial tax relief. It will maintain USA accounts, the
    largest and most progressive tax incentive ever offered to encourage
    savings. USA accounts will allow every American to begin saving from the
    first day in the work force, providing more help for those who need it,
    giving every American a stake in our shared prosperity.
        In addition to the USA accounts, I have proposed tax cuts, targeted
    and paid for, for child care, for stay-at-home mothers, for long-term
    care, to encourage businesses to invest in poor communities, and to
    modernize 6,000 schools. But first things first.
        Fourth, we can use this surplus to meet other vital national needs,
    such as maintaining military readiness, honoring our veterans,
    protecting the environment, promoting health research, farm security,
    and other core functions of our Government.
        Beyond this, we have a chance to use the surplus not only to care
    for our parents through Social Security and Medicare but to give a
    greater chance in life to our young children. So today I am proposing a
    new $156 billion children's and education trust fund. This commitment
    can enable us to offer Head Start preschool to a million children, to
    hire those 100,000 teachers, to provide extra help for a million
    children in our poorest communities, to pay for dramatic improvements in
    children's health.
        And finally, by investing to save Social Security and strengthen
    Medicare, my plan now will entirely pay off our national debt. In the 12
    years before I took office, reckless fiscal policies quadrupled our
    debt, bringing us higher interest rates, higher unemployment, higher
    inflation. By balancing the budget we have begun to reduce the debt. But
    today our national debt still totals $13,400 for every man, woman, and
    child. If we maintain our fiscal discipline, using the surplus to pay
    down the debt and using the savings to strengthen Social Security,
    America will entirely pay off the national debt by 2015.
        If you look at this chart, you will see that we have now cut up
    Washington's credit card. Now we can pay off the debt; by 2015, this
    country can be entirely out of debt. This is a remarkable milestone, but
    it is clearly within reach, if we do not squander the surplus by
    choosing short-term gain over long-term national goals.
        The surplus is the hard-earned product of our fiscal discipline. We
    should use it to prepare for the great challenges facing our country,
    caring for our parents, caring for our children, freeing our Nation from
    the shackles of debt so that we can have long-term, sustained economic
    prosperity.
        Keep in mind what this means to ordinary people. If you pay this
    debt off, it means interest rates will be lower. It means there will be
    more business investment. It means there will be more new jobs. It means
    there will be more money left over for higher wages. It means the cost
    to families of homes and cars and college educations will be lower.
    That's what being out of debt means.
        It means the next time there is an international financial crisis,
    we will be relatively less vulnerable because we won't have to borrow so
    much money, and the poorer countries will

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    be able to borrow more money at lower interest rates, bringing greater
    global prosperity and stability. This is a very significant achievement
    for our country and for a more stable and peaceful and prosperous world.
        So I hope, very much, to work with Congress in the weeks ahead to
    pay off the debt, to finish the work of strengthening Social Security
    and Medicare, and to make a real commitment to our children and our
    future.
        Again, let me thank the national economic team and all others who
    have supported these initiatives over the last 6 years. Thank you very
    much.

    Tax Cuts

        Q. Are you open to tax cuts beyond those that you mentioned, Mr.
    President?
        The President. I think we should achieve these objectives. Within
    the framework of achieving these objectives, obviously, I'll be working
    with the Congress to achieve them. Thank you.

    Arkansas Senate Seat

        Q. Do you want to run for Senate from Arkansas? [Laughter]
        The President. I think Rubin should run
    for the Senate from Arkansas. [Laughter] He's got the best timing of
    anybody alive.

    Note: The President spoke at 8:59 a.m. on the South Lawn at the White
    House, prior to his departure for Westport, CT. In his remarks, he
    referred to Secretary of the Treasury Robert E. Rubin.