[Weekly Compilation of Presidential Documents Volume 35, Number 26 (Monday, July 5, 1999)]
[Pages 1206-1208]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
Remarks on Departure for Westport, Connecticut, and an Exchange With 
Reporters

June 28, 1999

Midsession Review of the Federal Budget

    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.

[[Page 1207]]

    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, 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.

[[Page 1208]]

    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 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. In his remarks, he referred to Secretary of the Treasury Robert 
E. Rubin.