THE STATE OF THE UNION January 27, 1998 The NewsHour with Jim Lehrer Transcript

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President Bill Clinton, in an hour and fifteen minute speech, outlined his major goals for the coming legislative year. In the first part, the president outlined the successes of the first five years of his presidency and announced that federal budget surpluses should be used to maintain the Social Security administration. In the second part, Mr. Clinton discussed the need to address several international and trade issues as well as pursuing a stronger national community. And finally, the president turned his attention to the future, discussing how the country must prepare for the new millennium.

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A RealAudio version of this segment is available. NEWSHOUR LINKS: January 27, 1998 President Clinton discusses America's role in international affairs. January 27, 1998 President Clinton reveals his vision of America in the 21st Century . January 27, 1998 Senator Lott issues the Republican response. January 27, 1998 Political analysis of the State of the Union address. January 22, 1998 Presidential historians discuss the State of the Union address throughout American history. Browse the NewsHour's coverage of the White House. OUTSIDE LINKS: White House Republican National Committee Democratic National Committee

Mr. Speaker, Mr. Vice President, members of the 105th Congress, distinguished guests, my fellow Americans:

Since the last time we met in this chamber, America has lost two patriots and fine public servants. Though they sat on opposite sides of the aisle, Representatives Walter Capps and Sonny Bono shared a deep love for this House and an unshakable commitment to improving the lives of all our people.

In the past few weeks, they have both been eulogized. Tonight, I think we should begin by sending a message to their families and their friends that we celebrate their lives, and give thanks for their service to our nation.

"The state of our union is strong."

For 209 years, it has been the President's duty to report to you on the State of the Union. Because of the hard work and high purpose of the American people, these are good times for America. We have more than 14 million new jobs. The lowest unemployment in 24 years. The lowest core inflation in 30 years. Incomes are rising, and we have the highest home ownership in history. Crime has dropped for a record five years in a row and the welfare rolls are the lowest in 27 years. Our leadership in the world is unrivaled. The state of our union is strong.

But with barely 700 days left in the 20th Century, this is not a time to rest; it is a time to build, to build the America within reach.

An America where everybody has a chance to get ahead with hard work. Where every citizen can live in a safe community. Where families are strong, schools are good, and all our young people can go to college. An America where scientists find cures for diseases from diabetes to Alzheimer's to AIDS. An America where every child can stretch a hand across a keyboard and reach every, book ever written, every painting ever painted, every symphony ever composed. Where government provides opportunity, and citizens honor the responsibility to give something back to their communities. An America which leads the world to new heights of peace and prosperity.

This is the America we have begun to build: this is the America we can leave to our children -- if we join together to finish the task at hand. Let us strengthen our nation for the 21st Century.

Moving government into the information age.

Rarely have Americans lived through so much change, in so short a time, in so many ways. Quietly but with gathering force, the ground has shifted beneath our feet, as we have move into an information age, a global economy, a truly new world.

For five years now, we have met the challenge of these changes as Americans have at every turning point in our history -- by renewing the very idea of America: widening the circle of opportunity, deepening the meaning of our freedom, forging a more perfect union.

We have shaped a new kind of government for the Information Age. I thank the Vice President for his leadership and the Congress for its support in building a government that is leaner, more flexible, a catalyst for new ideas and most of all, a government that gives the American people the tools they need to make the most of their own lives.

We have moved past the sterile debate between those who say government is the enemy and those who say government is the answer. My fellow Americans, we have found a third way. We have the smallest government in 35 years, but a more progressive one. We have a smaller government but a stronger nation.

We are moving steadily toward an even stronger America in the 21st Century. An economy that offers opportunity. A society rooted in responsibility. And a nation that lives as a community.

A deficit with eleven zeroes to simply zero.

First, Americans in this chamber and across this nation have pursued a new strategy for prosperity: Fiscal discipline to cut interest rates and spur growth; investments in education and skills, in science and technology and transportation, to prepare our people for the new economy; new markets for American products and American workers.

When I took office, the deficit for 1998 was projected to be $357 billion, and heading higher. This year, our deficit is projected to be $10 billion, and heading lower.

For three decades, six presidents have come before you to warn of the damage deficits pose to the nation. Tonight, I come before you to announce that the federal deficit -- once so incomprehensibly large that it had eleven zeroes -- will be, simply -- zero.

I will submit to Congress for 1999 the first balanced budget in 30 years.

And if we hold fast to fiscal discipline, we may balance the budget this year -- four years ahead of schedule.

You can all be proud of that because turning a sea of red ink into black is no miracle. It is the product of hard work by the American people and of two visionary actions in Congress -- the courageous vote in 1993 that led to a cut in the deficit of 90 percent, and the historic bipartisan balanced budget agreement passed by this Congress. And if we maintain our resolve, we will produce balanced budgets as far as the eye can see. We must not go back to unwise spending, or untargeted tax cuts, that risk reopening the deficit. Last year, we enacted targeted tax cuts, so that typical middle class families will now have the lowest tax rates in 20 years.

My plan to balance the budget next year includes new investments and new tax cuts targeted to the needs of working families: for education, for child care, for the environment.

But whether the issue is tax cuts or spending, I ask all of you to meet this test: approve only those priorities that can actually be accomplished without adding a dime to the deficit.

"Save Social Security first."

If we balance the budget for next year, it is projected that we will then have a sizable surplus in the years immediately afterward. What should we do with this projected surplus?

I have a simple four word answer: Save Social Security first.

Tonight, I propose that we reserve 100 percent of the surplus -- that's every penny of any surplus -- until we have taken all the necessary measures to strengthen the Social Security system for the 21st Century.

Let us say to all Americans watching tonight -- whether you are 70 or 50 -- or whether you just began to pay into the system -- Social Security will be there when you need it. Social Security first. Let us do that together.

I urge all Americans to join us -- in facing these issues squarely, and forming a true consensus on how to proceed. We'll start by conducting nonpartisan forums in every, region of the country, and I hope that lawmakers of both parties will participate. We will host a White House conference on Social Security in December. And one year from now, I will convene the leaders of Congress to craft historic, bipartisan legislation to achieve a landmark for our generation -- a Social Security system that is strong in the 21st Century.

In an economy that honors opportunity, all Americans must be able to reap the rewards of prosperity.

Because these times are good, we can afford to take one simple, sensible step to help millions of workers struggling to provide for their families: We should raise the minimum wage.

The education initiatives.

The information age is first and foremost an education age... in which education must start at birth and continue throughout a lifetime.

Last year, from this podium, I said education has to be our highest priority. I laid out a ten point plan to move us forward, and urged us all to make sure politics ends at the schoolhouse door.

Since then, this Congress, across party lines, and the American people have responded, in the most important year for education in a generation -- expanding public school choice -- opening the way to 3,000 charter schools -- working to connect every classroom in the country to the information superhighway -- committing to expand Head Start to a million children -- launching America Reads, sending literally thousands of college students into our schools to make sure every 8-year-old can read.

Last year I proposed, and you passed: 220,000 new Pell Grant scholarships for deserving students. Student loans are already less expensive and easier to repay, and now you can deduct the interest. Families all over America can put savings into our new, tax-free education IRAs. And this year, for the first two years of college, families will get a $1500 tax credit -- a Hope Scholarship that will cover the cost of most community college tuition. And for junior and senior year, graduate school, and job training, there's a lifetime learning credit. You did that and you should be very proud of it. And because of those actions I have something to say to each and every American family listening tonight: your children can go to college. If you know a child from a poor family, tell her not to give up. She can go to college. If you know struggling young parents who are worried they won't be able to save for their children's education, you tell them not to give up. Their children can go to college. If you know somebody caught in a dead-end job, afraid he can't afford the classes that will get him better jobs for the rest of his life, tell him not to give up. He can go to college.

Because of the things that have been done, we can make college as universal as high school is today. And my friends, that will change the face of 21st Century America.

We have opened wide the doors of the world's best system of higher education. Now we must make our public elementary and secondary schools the world's best as well -- by raising standards, raising expectations, and raising accountability.

Thanks to the actions of this Congress last year, we will soon have, for the very first time, a voluntary national test based on national standards in 4th grade reading and 8th grade math. Parents have a right to know whether their children are mastering the basics.

And every parent already knows the key: good teachers and small classes. Tonight I propose the first ever national effort to reduce class size in the early grades. My balanced budget will help to hire 100,000 new teachers who have passed a state competency test. With these teachers, listen, with these teachers, we will reduce class size in the first, second, and third grades to an average of 18 students a class all across America.

If I've got the math right, more teachers teaching smaller classes requires more classrooms. So I propose a school construction tax cut to help communities modernize or build 5,000 schools.

We must also demand greater accountability. When we promote a child from grade to grade who hasn't mastered the work, we don't do that child any favors. It is time to end social promotion in America's schools.

Last year, in Chicago, they made that decision -- not to hold children back, but to lift them up. Chicago stopped social promotion, and started mandatory summer school to help students who are behind to catch up. I propose an effort to help other communities follow Chicago's lead. Let's say to them: Stop promoting children who don't learn, and we will give you the tools you need to make sure they do.

I also ask this Congress to support our effort to enlist colleges and universities to reach out to disadvantaged children starting in the 6th grade -- to give them guidance and hope so they too can go on to college.

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