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 | THE 1998 FEDERAL BUDGET PLAN
FEBRUARY 6, 1997TRANSCRIPT |
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The President has released a $ 1.69 trillion budget that includes middle class tax cuts, and new spending for education, children's health care, and crime prevention. The GOP leadership says the plan is a "good first step," but needs work. Of most concern are cuts in the "wrong" places, and not enough middle class tax relief. Office of Management and Budget Director, Franklin Raines, discusses the plan with Elizabeth Farnsworth, followed by a critique by Sen. Pete Domenici (R-N.M.), who speaks with Margaret Warner.
A RealAudio version of of this segment is available.
February 6, 1997:
Sen. Pete Domenici's critique of the President's 1998 budget plan.
January 30, 1997:
The NewsHour historians look at the history of bipartisanship.
November 12, 1996:
Kwame Holman reports on the latest rounds of budget negotiations.
November 12, 1996:
Elizabeth Farnsworth discusses the budget negotiations with Senate Majority Leader Trent Lott (R-MS).
Browse the NewsHour's coverage of the Budget
Outside Links:
The Office of Management and Budget has placed President Clinton's FY 1998 Federal Budget request on the Internet.
ELIZABETH FARNSWORTH: The President's budget is our main story tonight. Our coverage begins with this background report from Kwame Holman.
KWAME HOLMAN: The President and his economic team introduced their fiscal 1998 budget this afternoon as part of a five-year balanced budget proposal.
PRESIDENT CLINTON: My plan balances the budget while maintaining the balance of our values. First, it eliminates the deficit by 2002 through detailed difficult cuts in hundreds of government programs.
Second, it increases investment in education and training to $51 billion in 1998, a 20
percent increase. It provides tax cuts to help families pay for college, increases Pell Grant scholarships for deserving students, advances the America Reads initiatives to help every eight-year-old read independently, commits to helping connect every classroom to the Internet by the year 2000.
Third, it provides targeted tax relief for the middle class to pay for education, health care, to buy and sell a home. It provides a $500-per-child tax credit to help families raise their children.
Fourth, it takes critical steps to extend health care to more Americans. It secures the Medicare Trust Fund for 10 years, making necessary reforms to help the program meet these budget topics--excuse me--these budget targets and also to maintain its fundamental purpose.
Fifth, it advances our interests as the world's indispensable nation, reversing the downward spiral in international affairs spending, strengthening our ability to promote peace, and fighting global problems like drug trafficking, terrorism, and nuclear proliferation.
KWAME HOLMAN: The President's highest priority, education, would receive nearly
$55 billion over the next five years. New welfare spending would cost $21 billion, most of it to restore to legal immigrants benefits knocked out by last year's welfare reform law. Expanding health care coverage, mostly to uninsured children through the Medicaid program, would cost $18 billion. The President's proposed tax breaks, including a $500-per-child tax credit, will cost the Treasury $98 billion. On the spending reduction side the Clinton budget would reduce Medicare expenditures by $100 billion and reduce spending on current Medicaid programs by $22 billion.
A variety of other federal programs, many not yet specified, would undergo cuts totaling $137 billion. The budget also would raise new revenues by ending some government subsidies to corporations, closing tax loopholes and reinstating the 10 percent federal tax on each airline ticket sold domestically. In its first year, beginning in October, the Clinton budget would spend $1.69 trillion. As usual, entitlements, such as Social Security and Medicare, are the lion's share, totaling $890 billion.
The remaining federal programs other than defense total $288 billion.
Spending on defense would be $259 billion, and interest on the $5 trillion national debt totaled $250 billion. But next year's budget still would include deficit spending of $121 billion. Annual deficits would continue to fall for three years. The budget would become balanced in 2002 and run a $17 billion surplus by the end of that year.
PRESIDENT CLINTON: We believe our balanced budget plan will keep the budget more or less in balance, and I say that because it's impossible to predict everything that will happen. But based on the projections we now have, we believe we can maintain a balanced budget for more than two decades.
KWAME HOLMAN: But even before the President's budget briefing ended, Republican budget leaders on Capitol Hill were saying his budget doesn't go far enough.
REP. JOHN KASICH, Chairman, House Budget Committee: We just really do not have the kind of bold document that we would like to see that would be a message to people that there really is change in Washington; that the era of big government is over; that we are going to do everything we can to rescue the American family, to let them keep more of what they earn, to put them in a position to make more money in their work by strengthening the private sector, and we really--we really don't see it.
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