    [Weekly Compilation of Presidential Documents Volume 35, Number 1 (Monday, January 11, 1999)]
    [Pages 10-13]
    [Online from the Government Publishing Office, www.gpo.gov]

    <R04>
    Remarks on the Budget Surplus for Fiscal Year 1999

    January 6, 1999

        Thank you very much. Thank you, and good morning. Let me begin by
    saying that, for me, a primary purpose of this event is not only to
    formalize our budget projections for this coming year but just to thank
    all of you. I guess I ought to begin with John Podesta and the Vice
    President. I never dreamed when I asked John Podesta to be Chief of
    Staff that he would become the stand-up comic of the administration.
    [Laughter] Sort of seemed out of character. But I thought it was pretty
    good. And I could see a lot of you were reliving your holiday
    excruciating experiences.
        One of the hardest jobs of the Vice President, he has to do all
    these very burdensome representations of the administration. He has to
    go places that I can't go, or don't want to go, and shoulder burdens I
    can't bear. And he just really--he went above and beyond the call by
    representing the administration at the Tennessee-Florida State football
    game. [Laughter] And I want to thank him for that enormous sacrifice.
    [Laughter]
        I'd also like to thank the members of the economic team who have
    already been mentioned. We have had an extraordinary relationship over
    the last 6 years. It began before I assumed office with endless
    discussions and arguments about the finer points of what would be in the
    economic plan of 1993. It continued yesterday with a 2-hour meeting
    about what is the appropriate thing to do with the crisis that the
    American steel industry faces now.

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        And in every meeting, we have what I consider to be examples of
    genuine patriotism because of people around the table are always working
    for what is in the best interest of the American people over the long
    run. And I want to thank all of you because without you, none of these
    arguments would amount to anything because you have to put flesh on the
    bones of the policies that we adopt. And I thank you for that.
        Let me say that the preparation of a national budget, I think,
    sometimes does get lost in the agony of the numbers-crunching or the
    cleverness of finding one final way to solve one last problem. But we
    should never forget that there are human stories behind all these
    numbers. Because of the work that you have done, we literally have
    opened the doors of college education to all Americans. And you should
    never forget that. Because of the work that you have done in the
    balanced budget, we were able to provide the opportunity for another 5
    million children to have health insurance, to figure out a way to make
    that big downpayment on the 100,000 teachers.
        And for those who are skeptical, I would remind you that we are now
    going to finish, this year, our commitment of 1993 to 100,000 police
    officers ahead of schedule and under budget, giving the United States
    the lowest crime rate in 25 years. So I thank you for all of that.
        You heard the Vice President say that when we took office--well,
    actually, shortly before we took office--at Blair House, I got the final
    estimate of the budget deficit for the first year of my Presidency: $290
    billion. And I was told that, by this year, if I survived this long--and
    back in '93 I wondered when I looked at those deficit numbers--that it
    would be over $400 billion.
        We then had some very difficult decisions to make because we wanted
    to reduce the deficit and balance the budget; we wanted to bring
    interest rates down; we thought there was no way to get the American
    economy going again without doing so. But we knew that we had to invest
    in the future of America. And we also knew that we were in the middle of
    a 20-year decline in the real earnings of average middle-class citizens.
    And we wanted to give particularly lower income working people with
    children a tax cut even in 1993, which we did by doubling the earned-
    income tax credit. So we had to put that very tough budget together.
        The key was doing enough--figuring out enough, to get interest rates
    down, because high interest rates were keeping entrepreneurs from
    starting new businesses or expanding them. They were discouraging young
    people from buying homes. They were, as has already been said, causing
    grave questions about the leadership the United States and the rest of
    the world. Our deficit had become a symbol of the inability of
    Government to play its essential role in American life.
        So we put together our strategy based on fiscal discipline,
    investing in our people, and expanding American sales of products and
    services abroad. The results have been clear. There were a lot of dire
    predictions from the naysayers, and the budget passed by the narrowest
    of margins. But it began the process which led to the 1997 balanced
    budget, led to the second balanced budget we passed last year, and has
    now given us over 17 million new jobs and the lowest unemployment rate
    in 28 years, the lowest percentage of our people on the welfare rolls in
    29 years, and the highest homeownership in history. All of you can be
    justly proud of the role you played in that.
        Now, just 3 months ago we were able to announce for the first time
    in three decades a budget surplus. The surplus I announced that day, $70
    billion, was the largest in American history; as a share of our economy,
    the largest since the 1950's.
        Today I am proud to announce that we can say the era of big deficits
    is over. We are now entering the second year of an era of surpluses. Our
    economists project that in 1999 we will close out this century with a
    surplus of not less than $76 billion, the largest in the history of the
    United States. And I thank you for your role in that.
        Now, the chart over here--Gene Sperling never wants me to get up
    here without charts, so here I am. [Laughter] The chart over here shows
    you the difference starting in 1999 of the projections for this year, as
    compared with the reality. And the gap is all the money the American
    people have

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    saved, the money that has gone back into the economy, the money that has
    made it possible for interest rates to be lower and investment to be
    higher.
        Just as exploding deficits were the symbol of a Government failing
    its people in the 1980's, these surpluses are a symbol of a Government
    that works in the 1990's and beyond, one that lives within its means,
    cuts wasteful spending, that still honors the values and the priorities
    of the American people: education, health care, the environment.
        It is the smallest Government in 35 years, by well over 300,000
    fewer people than when we took office, but more prepared than ever to
    meet the challenges of the 21st century. Deficit reduction has brought
    tangible benefits to millions of families. We saved the American people
    more than a trillion dollars on the national debt. More than 7 million
    new families have realized their dream of owning a home. Another 18
    million families have refinanced their homes at lower mortgage rates,
    and I'd bet anything that includes some people in this room.
        For millions of Americans, the lowest--these low interest rates have
    amounted to a tax cut of tens of billions of dollars, putting in reach a
    family vacation, a new car, perhaps a college education.
        So today, I wish we could say our job is done, in the midst of this
    celebration. At a time like this it would be easy just to do that, to
    call a halt to this meeting and to say go back to work and just figure
    out how to keep these numbers in line. But the truth is, all of you know
    we still have very large challenges as a country, challenges that this
    surplus gives us the opportunity to meet. We worked hard to bring fiscal
    discipline to produce this surplus. Like any family with long-term
    financial needs and a little more earnings than we expected, we can't go
    out and spend the surplus today; we have to plan for the future.
        That is why I have said repeatedly, before we even consider new
    spending or tax cuts, first we must set this surplus aside until we save
    Social Security for the 21st century. We know that in about 30 years the
    Social Security Trust Fund will no longer be able to meet the retirement
    needs of our generation--mine, the baby boomers. No parent wants his
    retirement to be funded by his children. No parent in the baby boom
    generation wants our children to have to spend less on our
    grandchildren's education and upbringing because we failed to fix Social
    Security at this time.
        So, therefore, I have said, and I will reiterate today, while there
    are many needs out there in this country--there's still investment needs
    in education, investment needs in research, investment needs in the
    environment, investment needs in other health care initiatives--while
    there are many arguments that can be made to give families further tax
    relief, particularly those coping with the burdens of raising their
    children and the cost of child care while going to work, first we must
    save Social Security for the 21st century, before we consider new
    spending or other tax cuts.
        Some say that this task will be too complicated for the Congress and
    the administration to achieve, that the will is too weak, that the
    political system too divided. I do not agree with that. I heard that 6
    years ago when I showed up here--the political system was weak and the
    parties were divided. And look at all that's happened in the last 6
    years by a sustained, good-faith effort, not just with the budget but in
    the area of education, in the area of crime control, in the area of the
    environment, in the area of health care, in the area of promoting world
    peace, in the area of biomedical research, and so many other things.
        We cannot use anything as an excuse not to deal with our most
    pressing priorities. I do not intend to do it. I do not think the
    American people expect us to do it, and I think that we will surprise
    the skeptics by dealing with the Social Security challenge over the next
    several months. You have given us the tools to do it, with this surplus.
    And when that happens, you can also take a full measure of pride in that
    achievement.
        Now, let me also say to you that there are also a lot of other
    challenges, as I have said. We have to deal with the Medicare challenge;
    it's the same thing as the Social Security challenge, except that it
    will hit us sooner. We have to pass a Patients' Bill of Rights; we have
    to continue to fund our education commitments. But we can do all these
    things.

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        But believe me, at every single turn in the road, we'll have to
    figure out how to make the numbers add up, how to stay within our
    commitment to fiscal discipline, how to be as clever as we can in the
    use of our resources without going over the line and being so clever we
    endanger the fiscal responsibility, the low interest rates, the economic
    success that has brought us to this point.
        We have to depend on you to keep that balance, to have that creative
    tension. I know you will do it. I hope you will think about this chart
    when you go home tonight. I hope that you will be proud of what you have
    done for your country. And I hope you will know that we are very proud
    of you and very grateful.
        Thank you very much, and happy New Year.

    Note: The President spoke at 10:45 a.m. in Room 450 of the Old Executive
    Office Building.