Clinton Unveils His Balanced Budget

WASHINGTON (AllPolitics, Feb. 2) -- Touting its zero deficit at every turn, President Bill Clinton on Monday unveiled his $1.7 trillion 1999 spending proposal for the federal government.

"This budget marks the end of an era," Clinton said, "an end to decades of deficits that have shackled our economy, paralyzed our politics and held our people back. It can mark the beginning of a new era of opportunity for a new American Century." (224K wav sound)

The budget contains no giant surprises. It is four volumes and 2,514 pages of legal language formally proposing the programs that Clinton has been talking about for weeks, and which he summarized in his State of the Union address last week.

Major initiatives include a new $21 billion child-care initiative, more than $7.3 billion in new education spending, controversial new proposals to expand Medicare and a challenge to the states to aggressively sign up poor children who are eligible for Medicaid but not now enjoying its benefits.

Clinton several times emphasized his State of the Union pledge to apply every penny of any surplus to bolstering Social Security, though many congressional Republicans are eyeing tax cuts instead. (160K wav sound)

Clinton's budget also proposes roughly $25 billion in "loophole closers" -- otherwise known as tax increases -- including eliminating tax breaks enjoyed by banks, real estate investment trusts and multinational corporations.

The new Clinton budget also envisions raising more than $65 billion over the next 10 years through a national tobacco settlement; that translates into roughly a $1.50-a-pack increase in cigarette taxes.

Many of the president's new initiatives would be paid for from the proceeds of the settlement, which is hardly a done deal.

"The whole budget is based on the tobacco settlement and ... I think it is fair to say when you talk to people on the (Capitol) Hill that the tobacco settlement is dead," Richard May, a former House Budget Committee staff director, told The Associated Press.

The White House says it will find the money elsewhere should the settlement not pass.

Budget director Franklin Raines says he is optimistic about the tobacco bill's chances. "We are quite confident that the majority of the American people want to see this kind of legislation to raise the cost of cigarettes," he told the AP, "and we believe that ultimately the Congress is going to reflect the view of the American people."

Clinton's budget forecasts surpluses of $218.8 billion over the next five fiscal years: $8.5 billion in 2000; $28.2 billion in 2001; $89.7 billion in 2002; and $82.8 billion in 2003.

"It is obvious that you can have a smaller government, but a more progressive one, that gives you a stronger America," Clinton said.

"We've done more than simply balance the budget, more than just line up numbers on a ledger," he said. "We have restored the balance of values in our policy, restored the balance of confidence between government and the public. Now, we'll have a balanced budget not only next year, but as far as the eye can see."

Clinton called for bipartisan cooperation in passing the first balanced budget since 1969, but his own budget is crafted with congressional politics in mind.

Its proposed spending for defense and transportation, for example, is significantly lower that the levels favored by congressional Republicans. The White House deliberately earmarked funds for Clinton's pet programs and left transportation, defense and other areas to negotiations with Republicans.

Clinton applauded the efforts of past and present Congresses that have voted for tough measures to bring the deficit down, and saluted the American people for staying the course.

"For more than two centuries, Americans have strengthened our nation at every critical moment with confidence, unity and determination to meet every challenge," Clinton said. "For too long, the budget deficit, a worsening crime wave, the seemingly unsolvable welfare difficulties, they all seems to challenge our innate American confidence. In the past five years, the American people have met these challenges, and have moved to master them." (320K wav sound)

Clinton's budget projections are based on conservative economic growth estimates. The administration is predicting growth of just more than 2 percent per year; annual growth in the last quarter was more than 4 percent.

White House aides say their lower estimates leave room for a cushion in case the Asian financial crisis has a greater effect on the U.S. economy than now anticipated. Of course, increasing the growth estimates during budget negotiations would also open the door to higher spending and make it easier to bridge the differences between White House and GOP priorities.

At the end of the president's presentation, Vice President Al Gore handed Clinton a ceremonial magic marker, and Clinton turned to a chart entitled 1999 deficit, filling in the blank with a bold "0!"

Monday Feb. 2, 1998

• Clinton Unveils His Balanced Budget
• The Budget: Nitty-Gritty Details
• Republicans Criticize New Spending In Clinton Budget
• Starr Subpoenas Stephanopulous
• Jones To Appeal Ruling Excluding Lewinsky From Her Case
• Clinton Will Visit New Mexico Tuesday
• Panetta Won't Run For Governor
• Lewinsky's Mother To Marry Media Executive