Returning To Work, Clinton Focuses On Budget
WASHINGTON (AllPolitics, Jan. 5) -- Taking advantage of the strong economy, President Bill Clinton says the new budget he will submit to Congress early next month will be balanced, three years ahead of schedule.
Last year's bipartisan budget deal with Congress did not project eliminating the federal deficit until 2002. But in recent weeks, House Speaker Newt Gingrich has urged the president to submit a balanced budget this year, something White House aides had insisted was impossible until now.
Having already signed off on the major proposals of his 1998 budget plan, Clinton met this afternoon with his budget advisors to go over the details.
Speaking to reporters before the meeting, Clinton said, "This will be the first time in 30 years we've had a balanced budget. And that's good news for the American people and for the American economy."
When Clinton took office in 1993, the deficit was hovering around $300 billion. But now the White House says the current year's deficit will be $20 to $25 billion. That's half of the $50 billion dollar deficit projected last year.
But to reach that balanced budget, Clinton is planning another hefty increase in the tobacco tax, hoping to raise $60 billion dollars over the next five years. Republicans, however, are promising to resist this proposal.
The president is also resisting Republican calls for broader tax cuts, warning that any talk of a budget surplus is still premature.
The budget plan's specifics
In advance of his State of the Union address on Jan. 27, Clinton is releasing details of other budget proposals.
The White House is gearing up to sell its plan to Congress and the public, pushing key points, including increased spending on education, expanded access to child care and health care and targeted tax cuts.
Over the next month, the White House will host a series of events focusing on those areas.
On Tuesday, he'll outline a plan that will allow people 62 to 64 years old to become eligible for Medicare by paying about $300 a month. The current minimum age is 65. Clinton will also propose that laid-off workers between the ages of 55 and 61 be allowed to buy Medicare coverage as well.
On Wednesday, the president will propose additional "targeted" tax cuts to promote child care.
The president will officially unveil his budget in February.
The surplus question
Last year's balanced budget agreement projects a modest surplus in 2002, but government revenues are running ahead of schedule and there is some speculation the government books might come into balance, and even be in the black, sometime in the current fiscal year.
One White House source told CNN a fiscal 1999 surplus "is a possibility -- but a very slight one." The source said economic growth would have to continue at current rates throughout the year, but most government economists predict a modest slowdown because of tight labor markets and the effect of the Asian economic crisis on U.S. exports.
Another source said the new administration deficit projection raises the possibility of six consecutive years of lower annual budget deficits. The deficit was $22 billion in fiscal 1997, and the new projections show that instead of an increase this year there could be an even smaller deficit.
The White House maintains, however, that it is irresponsible to propose broad tax cuts or increased federal spending with no way of paying for them, saying a projected future surplus in the federal budget is not guaranteed.
Clinton said, "We don't have a surplus. We can project a surplus but we don't have one and we've waited 30 years for a balanced budget and between 1981 and 1982 we projected all kinds of things and went out and spent the money on tax cuts and spending both. We spent the money. And we quadrupled the debt, drove up interest rates and put our country in a terrible hole."
But Republicans say there should be more in the budget to give tax relief to Americans, targeting in particular the so-called marriage penalty.
And some Democrats have different plans for a possible surplus. Sens. John Kerry (D-Mass.) and Paul Wellstone (D-Minn.) have proposed increased funding for education and programs to help young people.
Wellstone told ABC's "This Week": "We have to invest in the health and skills and intellect and character of our children, all of our children ... If we don't invest now, we pay the price later."
House Budget Committee Chairman John Kasich (R-Ohio) promises to fight any plans to increase federal spending above the limits set in last year's balanced budget agreement. "The idea that we ought to take any of this money and expand government for anything, to have any additional spending beyond the budget agreement, would be a terrible mistake," Kasich told NBC.
CNN's Wolf Blitzer, John King and Eileen O'Connor contributed to this report.