February 1, 1999
Web posted at: 6:01 p.m. EDT (1801 GMT)

WASHINGTON (AllPolitics, February 1) -- President Bill Clinton unveiled his budget for fiscal year 2000 Monday, formally sending Congress a $1.77 trillion spending plan that proposes using the new century's forecasted record budget surpluses to shore up Social Security and increase domestic spending.

The president's formal release of his budget proposal is the opening salvo in what promises to be a fierce battle with Capitol Hill over how to use the burgeoning budget surplus. While many Republicans have been pushing to use the money for an across-the-board tax cut, Clinton urged setting most of it aside for the Social Security and Medicare programs.

President Clinton unveils the budget

"Our economic house is in order, and strong," Clinton said. "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," Clinton said.

Of the projected $117 billion 2000 budget surplus, Clinton wants to use 62 percent for shoring up Social Security, and 15 percent for Medicare. Clinton's budget also allocates 12 percent to subsidize universal savings accounts, a scheme to encourage low- and moderate-income Americans to save for retirement.

The balance would go toward increasing domestic spending for the Pentagon and selected domestic programs, for total 2.3 percent increase in federal spending.

Clinton called this spending a critical investment in America's future: "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."

With the first federal surplus in 29 years realized in 1998, the politics of the surplus era are shaping up to be as contentious as in years of deficit spending.

As the budget, bound in black, arrived on Capitol Hill, a Republican chorus complained the president's plan for not giving some of the money back to the public through tax cuts and for returning to the era of liberal spending.

Calling the president's plan a "lame-duck budget," House Budget Committee Chairman John Kasich (R-Ohio) said, "The president said the era of big government is over, but he keeps sending us things ... kind of like Santa Claus."

Clinton defended the $39 billion in increased spending in his plan, saying the increased revenues the booming economy will bring in make the budget, as a percentage of the nation's economy, even smaller than last year's.

More money for programs to strengthen education and defense initiatives is a critical investment in the future of the country, according to the president.

And while the administration's budget does not include a broad-based tax cut, Clinton said his budget does provide tax relief in the form of targeted tax credits, including the USA accounts.

The White House said its plan offers tax breaks worth more than $32.6 billion through 2004, including a $1,000 long-term health tax credit and a $500 stay-at-home parent tax credit. There are also tax subsidies for public school construction and expenses related to the disabled.

The leading Republicans tax plan proposes a 10 percent cut in income tax rates, returning $600 billion or more to taxpayers over the next decade. That, they say, is critical to keep the Democrats from creating new spending programs.

Other domestic spending proposed by the White House include $1 billion for job training and adult education; $580 million for housing vouchers for the poor; a major expansion of federal park land; and the biggest increase in a decade for the defense department. Funds for hiring more teachers and police officers are also included.

Parts of the president's budget may be dead on arrival, as the Republican-led Congress has already rejected expanding Medicare, raising cigarette taxes and subsidizing school construction.

But many of the president's proposals are popular with key constituency groups, and Clinton says his blueprint will bring down the national debt to its lowest level since World War I. This is a conservative fiscal goal that his Republican critics may find difficult to oppose.

Clinton reached out to those GOP lawmakers during his speech, and urged a bipartisan effort to work out differences between the two sides' budget proposals and pass a plan this year.

"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 and this room, we would like to return to that to pass this budget and keep going in the right direction," Clinton said.

CNN's Chris Black, Wolf Blitzer and The Associated Press contributed to this report.

Monday, February 1, 1999

• House prosecutors question Lewinsky
• Clinton rolls out $1.77 trillion budget
• The 2000 Budget: Nitty-gritty details
• Transcript: Clinton outlines FY 2000 budget
• Clinton lawyers to file leak complaint against Starr
• Price tag for Starr investigation: $40 million plus
• Proposal seeks to move back 'official' New Year's Day
• Rep. King claims he was threatened by GOP leadership
• GOP likely to offer stiff resistance to Clinton budget
• House quietly returns to work
• The CIA's budget? Sorry it's secret
• Report card in on government agencies
• How Clinton's budget would be spent
• Budget offers selective tax relief
• Trial a boon for lesser-known senators
• Defense budget has troop pay raise
• Louisiana GOP wants 2000 caucus spotlight
• Whitman breaks leg skiing in Switzerland

ARCHIVES

Search CNN/AllPolitics by           Enter keyword(s)       go    help