Background: Dividing the Pie
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KWAME HOLMAN: This morning, the White House delivered to Capitol Hill softbound copies of President Clinton’s $1.77 trillion budget for fiscal year 2000. Once inside, the thick, black books sealed in plastic were placed on display tables and handed out to reporters and congressional staff. The details of the president’s budget were unveiled officially later in the morning at a ceremony in the White House.
PRESIDENT CLINTON: This is our budget for the year 2000. It is the first budget of the 21st century. It charts a progressive but prudent path to our future, a balanced budget that makes vital investments.
KWAME HOLMAN: The budget is a blueprint for how the federal government divides and spends each dollar it receives. From year to year, the pennies spent from that dollar on different parts of the budget vary only slightly.
But a new factor is a growing budget surplus projected over the next decade, which opens a range of tax-cutting and spending options for Congress and the White House. In his budget for next year, the president would spend 15 cents of every dollar on national defense, and 17 cents on discretionary programs for education, transportation, science, technology, and foreign aid. Among mandatory spending programs, 22 cents would go to Social Security, 11 cents to Medicare, 6 cents to Medicaid, and 12 cents for other entitlement programs, such as food stamps, veterans’ pensions, and federal workers’ benefits. 11 cents would be used to pay the interest on the national debt, a reduction from years past. And the projected budget surplus allows the president to set aside 6 cents to pay for a plan to shore up Social Security, if Congress and the president can agree on one. President Clinton spent much of his time this morning talking about Social Security and the surplus.
PRESIDENT CLINTON: I have proposed committing 62 percent of the surplus for the next 15 years to Social Security and investing a small portion of that in the private sector, just as any private or state government pension would do, so that we can earn higher returns and keep Social Security sound for 55 years.
KWAME HOLMAN: The president also proposed using the surplus to bolster Medicare.
PRESIDENT CLINTON: Already, we have extended the life of the trust fund by ten years. We can save it for another decade if we use 1 out of every 6 dollars of the surplus for the next 15 years to guarantee the soundness of Medicare. This budget makes a down payment on that goal. It also commits 12 percent of the surplus, about $500 billion, more, if the Congress turns out to be right, for tax relief, to establish universal savings accounts, U.S.A. accounts, to help Americans to invest, to save for retirement, to share more fully in our nation’s wealth.
KWAME HOLMAN: After doing all of that, President Clinton insisted there still would be enough of the surplus left to make a significant dent in the national debt.
PRESIDENT CLINTON: Look at this chart. If we set aside 62 percent of the surplus for 15 years for Social Security and we set aside 15 percent for Medicare, we will cut the debt by two-thirds. As a share of our economy, we will cut it by 84 percent. Look, when I took office, it was about 50 percent. We have got it down now to about 44 percent. In 15 years, we will have it down to 7 percent, a third of what it was in 1981, before we started exploding the debt with the deficits. That will give us the lowest share of publicly held debt since 1917, before the United States entered World War I. (Applause)
KWAME HOLMAN: The president’s budget also calls for increased defense spending, up to $330 billion, by the year 2005. Among the president’s domestic spending initiatives next year is $5 billion to hire new teachers and build classrooms and $5.3 billion for health care initiatives, including expanding Medicare eligibility to people under age 65. The president has proposed five years of targeted tax cuts, totaling more than $35 billion, including $1,000 per family for long-term health care and $250 for stay-at-home parents who care for infants. The president would raise money with a 55-cents-per-pack tax increase on cigarettes, and by limiting tax breaks for corporations and wealthy investors.