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| BALANCING ACT
February 2, 1998NEWSHOUR TRANSCRIPT |
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President Clinton's 1999 federal budget is the first to be in balance in 30 years. The $1.73 trillion proposal includes a $9.5 billion surplus, and an overall spending increase of 3.9 percent over last year. After this background report, the White House Budget Director Franklin Raines debates the numbers with Senate Budget Committee Chairman Pete Domenici (R-NM).
KWAME HOLMAN: President Clinton made this morning's release of his 1999 budget proposal a major event. Nearly every member of his cabinet, more than 30 Democrats from the House and Senate, and dozens of invited guests packed the East Room of the White House. And, right from the start, the President took a back seat to Al Gore steal, letting the Vice President announce the expected news of the day.
A RealAudio version of this segment is available.
NEWSHOUR LINKS:
February 2, 1998
The two sides debate the numbers in the President's proposal.
January 9, 1998
Exploring the possiblities and plausibility of a budget surplus.
August 5, 1997
President Clinton signs a budget deal that will balance the books by 2002.
July 29,1997
Experts analyze the budget deal.
May 2,1997
Sen. Pete Domenici and Budget Director Franklin Raines discuss the budget agreement .
Browse the NewsHour's coverage of the budget, the White House and the Political Wrap index
OUTSIDE LINKS:
Office of Management and Budget
U.S. Senate
Previewing the end of budget deficits.
VICE PRESIDENT AL GORE: For those of you who won't pore through all of those numbers and graphs, let me preview the ending for you. I don't want to ruin it for you, but when you get to the end, what you'll find is that President Clinton is submitting to Congress today the first balanced budget in 30 years. (Applause.) That's the ending. (Applause)
KWAME HOLMAN: The President's balanced budget proposal calls for federal spending of $1.7 trillion beginning October 1st. Nearly one quarter of that--$425 billion--by law must go to Social Security recipients. Another 30 percent would be spent on Medicare, Medicaid, and other federal entitlement programs. Fifteen percent of the budget--$267 billion--would be spent on national defense. And a slightly larger amount would go to non-defense so-called "discretionary" programs such as education, housing, technology, and transportation. Interest payments on the national debt next year--some $240 billion--will account for the remaining 14 percent of the President's budget. Among the specific spending items in the President's budget are several new initiatives he unveiled over the last several weeks.
The President's plan: increased spending on schools and legal immigrants.
PRESIDENT CLINTON: Indeed, the balanced budget I submitted shows we can balance the budget and still hire 100,000 new teachers and modernize 5,000 schools. We can balance the budget and allow hundreds of thousands of middle aged Americans, who have no health insurance through no fault of their own, to buy into Medicare. We can balance the budget and still extend child care to a million more children.
KWAME HOLMAN: Other presidential initiatives include: extra money for after-school programs; tax credits for people who purchase energy-efficient automobiles; increased funding for biomedical research at the National Institutes of Health; and food stamps for 800,000 legal immigrants who lost their benefits after the 1996 welfare overhaul.
PRESIDENT CLINTON: The budget funds these initiatives by continued cuts in government programs, by closing unwarranted tax loopholes, and from the passage of tobacco legislation which, as every passing day shows, is critically important to the future of our children, and therefore of our country. (Applause)
The Republicans respond.
KWAME HOLMAN: Meanwhile, on Capitol Hill, Republicans wasted no time taking apart the President's spending proposals.
SEN. PHIL GRAMM, (R) Texas: The President's budget proposes the largest increase in spending contemplated by government since he proposed having the government take over and run the health care system. The President proposes the largest tax increase--$93 billion--substantially larger than the tax cut from last year. He proposes the largest tax increase contemplated by our government since 1993. The President takes $400 billion that will be paid into the Social Security Trust Fund and spends it on general government under this budget. I believe that should be stopped. And finally, if we have a tobacco settlement, the money ought to go to save Medicare; it ought not to go to fund general government.
REP. JOHN KASICH, Chairman, Budget Committee: You call Alan Greenspan and ask him what he thinks about the President expanding government by the tune of $150 billion in new programs. That does not bode well long-term for our economy and, frankly, I think most of these programs will not come to pass in a Republican Congress that believes in smaller government, lower taxes, more individual freedom, and more choice by people back home.
The traditional battle with Congress begins.
KWAME HOLMAN: But the President had more than just spending to talk about. He also focused on the money he expects will be left over after all the spending.
PRESIDENT CLINTON: First and foremost, we project that the budget will not only balance; it will actually run a surplus of $9 1/2 billion next year and over $200 billion over the next five years --fully $1 trillion over the next 10 years. This budget reserves that surplus--I want to say it again-- this budget reserves that surplus, saving it until we have taken the steps necessary to strengthen Social Security into the next century.
KWAME HOLMAN: Now the President begins the traditional battle with Congress over a final budget. And while many Republicans agree any budget surplus should be used to strengthen the Social Security system, others suggest using some of it to provide more tax breaks, improve the nation's infrastructure, or simply use the extra money to start paying down the $5 trillion national debt.
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