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Clinton: Tax-Cut Talk Is Premature

President doesn't want to spend surpluses that don't yet exist


WASHINGTON (AllPolitics, Dec. 5) -- Rumors of a tax cut in next year's budget were premature, it turns out. This afternoon, President Bill Clinton took issue with the way his comments on taxes and tax reform in today's New York Times are being characterized.

Is he thinking of a tax cut? "No, I don't believe that's a fair interpretation of what I said yesterday in my comments," Clinton told reporters at an event where he named his members to a Medicare commission.

"What I said was -- I was asked about proposals for tax reform -- and what I said was that I thought any tax reform that was adopted had to be fair, good for the economy, not burden the deficit and make the system simpler. That was the context in which that discussion occurred.

"Then there was a separate discussion about the discussion that is going around town here about what ought to be done with the surplus. Some people say we should have a tax cut with the surplus. Some people say we should spend more money with the surplus. Some people say we should apply it to the debt," Clinton said.


"What I tried to point out yesterday is that there is not a surplus. The people who say there is a surplus are talking about the difference in the projected line of deficit to 2002 when we adopted the balanced budget law and I signed it, and the projected line now."

In an interview in today's Times, Clinton said while the federal budget deficit has fallen far faster than originally projected, "We do not have a surplus now. We do not have a surplus now. We have a deficit now.

"It's a tiny one, and it's less than 10 percent of what it was when I took office, but the people who say we have a surplus, I think it's very important that we understand what they're saying.

"They're saying that the deficit has gone down more rapidly than it was predicted to go down when we signed -- when I signed -- the balanced-budget bill and when it passed back last summer," Clinton told the Times.

"Therefore," he said, "some people think that we should go back to the curve that we predicted last summer and spend all the money between where we are now and where we were then. I think that is a questionable course," Clinton said.

Clinton said he has spoken with House Ways and Means Committee Chairman Bill Archer (R-Texas) about radical tax reform, but doesn't want to raise "false expectations" about whether he is likely to embrace any particular plan.

"I can't say yes, I can't say no," Clinton told the Times. "I wouldn't rule out the fact that I might find something that I think would work, but I don't have an idea on the griddle as you are doing this interview."

Clinton's aides have said they are examining a variety of tax measures, including one that would eliminate the "marriage penalty" suffered by taxpayers when they wed, and one from House Minority Leader Dick Gephardt that would set a flat tax rate of 10 percent for about 70 percent of America's workers.

In Other News:

Friday Dec. 5, 1997

Vermont's Gov. Dean Eyes A 2000 Run
Paula Jones Must Turn Over More Documents
Clinton: Tax-Cut Talk Is Premature
Recess Appointment Likely For Lee
Thurmond To Give Up Armed Services Reins In 1998
Pete Wilson's Former Maid Avoids Deportation
Clinton's Four Medicare Commission Appointees
Reno Refuses To Turn Over Memo
Asian Americans Complain About Fund-Raising Probe

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