[Public Papers of the Presidents of the United States: William J. Clinton (1999, Book I)]
[February 1, 1999]
[Pages 132-135]
[From the U.S. Government Publishing Office www.gpo.gov]
Remarks on Submitting the Fiscal Year 2000 Budget
February 1, 1999
Thank you very much, Mr. Podesta, Mr.
Vice President, members of the Cabinet, the
economic team, and Members of the Congress. I would like to, first of
all, thank the Vice President for his invaluable partnership these last
6 years and for the remarkable address he gave in Davos, Switzerland,
just a couple of days ago on the global economy and our responsibilities
there. I will say more about that in a moment. But all of you know how
much our long-term prosperity is tied to that.
I'd like to thank the large number of Members of Congress who are
here. There are so many, we haven't introduced them all. But in view of
the Vice President's remarks, I would like to point out that there is
one person here in whom I take particular satisfaction. Congressman Jay
Inslee from Washington is one of the people who
lost his seat in 1994, in no small measure because he voted for the
economic plan of 1993. And in 1998 the voters in Washington returned him
to the House of Representatives, and I'm delighted to see him. Stand up.
[Applause] Thank you.
I'd also like to point out that after the first couple of years,
when we passed our economic plan in a highly partisan manner, we
achieved a bipartisan consensus on a balanced budget which enabled us to
continue our progress. And I think I speak for every member of my party
in this room--we would like to return to that to pass this budget and
keep going in the right direction.
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This is our budget for the year 2000. It is the first budget of the
21st century. It charts a progressive but prudent path to our future, a
balanced budget that makes vital investments.
Seven years ago, when I ran for President, I committed to put our
fiscal house in order. Irresponsible policies had quadrupled our
national debt in the 12 previous years. The deficit was $290 billion in
1992 alone. That brought us high interest rates, low growth, and a
Government unable to meet its most basic obligations or to build our
bridge to the 21st century.
When I took office we charted a new course, as the Vice President
said: fiscal responsibility, smart investments, more trade. Today,
following that path, Americans have created the longest peacetime
expansion in our history: nearly 18 million new jobs, wages rising at
twice the rate of inflation, the highest homeownership in history, the
lowest welfare rolls, the lowest peacetime unemployment since 1957.
Last year, for the first time in three decades, as all of you know,
we had turned red ink to black with a $70 billion surplus. It is
projected to be only the first of many. As I said in the State of the
Union, America is on course for surpluses over the next quarter century.
And our estimates, optimistic as they sound, are more conservative than
those of Congress.
Our economic house is in order and strong. If we manage the surplus
right, we can uphold our responsibility to future generations. We can do
so by dedicating the lion's share of the surplus to saving Social
Security and Medicare and paying down the national debt. We can. And
because we can, we must do it now.
We have a rare opportunity that comes along once in a blue moon to
any group of Americans. We see now that balancing the budget, an idea
that once seemed abstract, arcane, or impossible, has made a real
difference in the lives of our citizens. Fiscal discipline has
transformed the vicious cycle of budget deficits and high interest rates
into a virtuous cycle of budget surpluses and low interest rates.
When interest rates fall, more Americans can buy and refinance
homes, as over 20 million of them have. They can buy cars, retire
student loans, start new businesses. When deficits disappear, capital,
more than a trillion dollars so far, is liberated to create wealth and
jobs and opportunity at every level all over America.
The less money we tie up in publicly held debt, the more money we
free up for private sector investment. In an age of worldwide capital
markets, this is the way a nation prospers--by saving and investing, not
by running big deficits. This is one reason why this year's budget, as a
percentage of our economy, is even smaller than last year's.
Now, the budget I present today keeps us on this path, a progressive
but prudent path to a positive future. It has taken hard work and tough
choices. I want to thank the members of the Cabinet for the whole array
of difficult, long meetings we had. But with our economy expanding and
our surplus rising, we have confidence that we can now look to the long-
term challenges of our country, to fulfill our obligations to 21st
century Americans, both young and old.
The baby boom, as we all know, will soon become a senior boom. The
first budget of the next century is our first big step toward meeting
that challenge. I have proposed committing 62 percent of the surplus for
the next 15 years to Social Security and investing a small portion of
that in the private sector, just as any private or State government
pension would do, so that we can earn higher returns and keep Social
Security sound for 55 years.
If we work together across partisan lines and make some tough but
fully achievable choices, we can also save Social Security for the next
75 years, lift the earnings limitation on what seniors on Social
Security can earn, and do something to alleviate poverty among elderly
women.
Our balanced budget also takes steps to strengthen Medicare. Already
we have extended the life of the Trust Fund by 10 years. We can save it
for another decade if we use one out of every six dollars of the surplus
for the next 15 years to guarantee the soundness of Medicare. This
budget makes a downpayment on that goal.
It also commits 12 percent of the surplus--about $500 billion, more
if the Congress turns out to be right--for tax relief to establish
Universal Savings Accounts--USA accounts to help Americans to invest, to
save for retirement, to share more fully in our Nation's wealth.
This is the economically sound and fiscally prudent course for our
country. If we do it--if we lock in the surplus to save Social Security
and Medicare--we can fulfill our obligations to older Americans.
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But as I said in the State of the Union--and I want to emphasize
this in particular today--reform of Social Security and Medicare is
equally important to younger Americans for two reasons. First of all, if
we take care of this, then when the baby boom retires, our children will
have their incomes to invest in their lives and the lives of our
grandchildren. Secondly, although this, at first glance, may seem far
removed from our lives, it is essential to their future. Because if we
do this, we will pay down the national debt.
Now, look at this chart. If we set aside 62 percent of the surplus
for 15 years for Social Security and we set aside 15 percent for
Medicare, we will cut the debt by two-thirds. As a share of our economy,
we will cut it by 84 percent. Look, when I took office it was about 50
percent; we've got it down now to about 44 percent. In 15 years, we will
have it down to 7 percent, a third of what it was in 1981 before we
started exploding the debt with the deficits. That will give us the
lowest share of publicly held debt since 1917, before the United States
entered World War I.
Why is this important? Well, we've already made deficit spending a
thing of the past, but this huge debt remains. We quadrupled the debt in
4 years. When I took office, we were looking at a future where we'd be
spending 20, 25 cents on a tax dollar just to pay interest on the debt--
not to pay it down, just to pay interest. We've now got it down to a
little over 13 cents on the dollar today. And we can take it, as you
see, way, way down. If we take it down to 7 percent, our successors 15
years from now will only have to allocate 2 cents of every dollar the
American people pay in taxes to pay interest on the debt--2 cents.
Now, this is especially important now, with all this financial
turmoil around the world. We're doing everything we can--and again I
want to thank the Vice President, Secretary
Rubin, Deputy Secretary Summers; they went to Switzerland. We've been working hard
for a year to try to stabilize the global economy, get growth going
again. But we know that if things go haywire in other parts of the
world, it can have an adverse effect here. This is an enormous insurance
policy if we pay down the debt; that no matter what happens elsewhere,
we'll be able to keep interest rates low, we'll be able to keep
investing.
And I want to point out, if I could put in one plug for another part
of our budget, it's also why our whole invest-in-America strategy--to go
into the poorest neighborhoods in our cities and Appalachia and the
Mississippi Delta and south Texas and in rural areas, including Native
American communities--why that's so important, because these
underinvested areas of America have to be seen as new markets, to go
along with keeping the interest rates down and freeing up the money. If
the waters are troubled overseas, we have to be able to generate more
growth here as well.
So I say to all of you, this is something we're doing for our kids.
Yes, we're saving Social Security and Medicare; and yes, that will
prepare for the retirement of the baby boomers; and yes, it will save
money for our children and our grandchildren; but it will also guarantee
them an economy of continuing, enduring stability and a hedge against
the storms that may happen beyond our borders.
So that's why this is so important. This is not just about saving
Social Security and Medicare, although that is terribly important. It is
also about knowing that when we leave this century and enter the next,
we have given our children 20 years or so in which they can worry about
the challenges of the future and they can meet their challenges of their
times, things we may not even be able to foresee, unburdened by the
unfinished business of the 20th century, unshackled by our profligacy in
the latter part of this century.
It is profoundly important, therefore, that all across America
people see this budget not just as a budget that saves Social Security
and Medicare but the budget that ensures for young Americans the same
chance that those of us in the baby boom generation enjoyed in the years
after World War II, the same chance to meet the challenges that they
will have to face that we don't know yet.
Now, it also invests, as I said. It invests in new markets in
America; it invests in the education of our young people; it makes
historic investments from quality education and teaching to school
modernization, from smaller classes to summer school and after-school
programs.
But by saving Social Security and strengthening Medicare and paying
down the debt, it meets the critical first test of our obligation to the
new century. These are the same challenges that Americans over the
coming months and
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years will have to meet together. It is what we must do in Washington
this year.
All over America, most of what happens to Americans are being done
by people that don't have anything to do with the Government. They're
making their decisions for their families, for their businesses, for
their education, for their future. But we can prevent them from making
the most of their lives if we do not lift these burdens from them. And
if we do, we will dramatically increase the number of Americans that
will be able to live out their dreams and, therefore, keep the American
dream going forever.
The decisions we make here and now are going to have a huge impact
for a long, long time. We have a special obligation, because our
predecessors for the last several years never had this opportunity. They
never had the option to do what we can now do. It is now here before us,
thanks to the hard work of the people of this country, and we had better
fulfill our duty. I believe we will.
Thank you very much.
Note: The President spoke at 10:50 a.m. in the East Room at the White
House.