[Weekly Compilation of Presidential Documents Volume 35, Number 5 (Monday, February 8, 1999)]
[Pages 158-161]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
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.
    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

[[Page 159]]

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.
    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

[[Page 160]]

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 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

[[Page 161]]

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.