[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.