Clinton announces bigger surpluses, pushes Social Security plan
June 28, 1999
Web posted at: 6:00 p.m. EDT (2200 GMT)
WASHINGTON (AllPolitics, June 28) -- Announcing rosier-than-expected budget surplus projections, President Bill Clinton on Monday outlined a plan for using the money that he says would strengthen Social Security and Medicare, pay off the entire federal debt by 2015 and finance targeted tax relief.
Thanks to the booming economy, the White House says the government will have a surplus of $99 billion this year, $142 billion next year and an extra $1 trillion in surplus money over the next 15 years. (92K wav file)
President Clinton outlined his plan to strengthen Social Security and Medicare
"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," Clinton said. (148K wav file)
Clinton's plan is another salvo in the budget battle between the White House and GOP-led Congress. Republicans, who already were predicting a bigger surplus, say it's just more proof that Americans deserve a deeper tax cut.
"Tax cuts are a very high priority because it's obvious that the American people, in view of the growing economy -- they're being overtaxed. That's what is adding to the surplus," Senate Majority Leader Trent Lott (R-Mississippi) said.
The president isn't ruling out bigger tax cuts, but said Monday, "First things first." For him, that means buttressing the nation's two major entitlement programs. Clinton wants to commit nearly $800 billion of the surplus to Medicare and $543 billion to Social Security.
That would be enough money to keep Social Security solvent until 2053 and to add another 25 years to the Medicare trust fund, Clinton said. He also said there is sufficient money to afford a universal prescription drug benefit for all Medicare recipients. (Full story)
For the first time, the president endorsed a so-called "lock box" that blocks the government from dipping into the Social Security trust fund to pay its day-to-day bills.
"Social Security taxes should be saved for Social Security, period," Clinton said.
A lockbox proposal already has passed the House. Senior White House officials are working with Republican lawmakers on a compromise proposal.
"The president's finally caught up to us on that," House Budget Committee Chairman John Kasich (R-Ohio) told CNN. "We want to save every dime for Social Security -- we're going to need it to create individual retirement accounts and keep Social Security from melting down. So that's a good proposal."
The White House projections estimate that $5 billion of next year's surplus would not come from Social Security receipts, a milestone that also came earlier than previously expected. Clinton said that development would allow funding of his spending proposals without touching Social Security tax dollars.
Republican sources tell CNN they expect the Congressional Budget Office (CBO) estimates of a budget surplus to be even more optimistic than the administration estimate -- "about $20 billion higher," said one, "somewhere about $130 billion."
CBO surplus estimates often surpass those of the administration. In April, for example, the CBO put out estimates higher than the White House's new numbers, projecting a $111 billion surplus for fiscal year 1999,d $825 billion for the next five years and $2.33 trillion for the next 10 years. The agency releases new numbers Wednesday.
While Clinton said some of the surplus funds will be used for tax relief, he again called for targeted tax cuts and reiterated his proposal for USA Accounts, a tax plan that helps middle income taxpayers save for retirement
But the president did not rule out working with Republicans on Capitol Hill for a deeper tax cut. "Within the framework of achieving these objectives, obviously I'll be working with the Congress to achieve them," he said.
GOP spokesmen on Capitol Hill say they welcome the president's newly stated willingness to negotiate the tax cuts they so covet.
The president also proposed the creation of a $156 billion education and children's trust fund to pay for his proposals to extend Head Start preschool to a million children, hire 100,000 new teachers, fund school construction and strengthen children's health programs.
CNN's John King and Bob Franken contributed to this report.