Clinton White House submits plan to balance U.S. budget for first tie in three decades

Jet, Feb 23, 1998

President Clinton has brought an end to three decades of fiscal chaos by presenting a $1.7 trillion balanced federal budget for 1999. While keeping his promise to "save Social Security first," he has also proposed to spend more on a host of issues, including child care, education and Medicare, paid for largely by a sizable increase in tobacco taxes.

By reaching balance, the president's budget represents a remarkable turnaround in the nation's fiscal policy over the last five years.

"We are not only balancing the budget for the first time in a generation, we are reaching balance three years ahead of the schedule we announced last summer with the Balanced Budget Act," the president said. "If we maintain our fiscal discipline, we may very well reach balance this year--four years ahead of schedule."

Franklin D. Raines, the first Black to hold the post of White House budget chief, played a major role in balancing the budget and said before the committee on the budget, U.S. House of Representatives, that "working with Congress, this administration has made remarkable progress."

"We have brought the deficit down from a record $290 billion to just $22 billion in 1997," said Raines. "This budget would finish the job by reaching balance in 1099, and generate balanced budgets far into the future."

As the president drew a big zero next to a dollar sign on a chart, aides and Democrats in Congress bunt into applause.

"We'll have a balanced budget not only next year," said the president, "but as far as the eye can see."

Overall, the budget projects a 3.9 percent increase in federal spending over the current fiscal year. The biggest winners are child care with $21 billion for increased subsidies, tax credits and grants and education with large increases to add 100,000 teachers, reducing class size for grades 1 through 3, as well as building or remodeling 5,000 schools.

The new budget plan would reduce taxes by $24.2 billion through 2003, mostly for low- and middle-income families' child care costs, to promote energy efficiency, and for tax credits to spur construction of new schools.

Clinton has also proposed greatly expanding the Medicare national health program for seniors by extending eligibility to Americans 55 to 64 years of age who can afford the premium.

The administration foresees $106 billion in revenue from tax increases and user fees, chiefly on tobacco, corporations and Wall Street investors. Most of that money would come from sharply higher taxes on cigarettes (approximately $1.50-per-pack increase.)

Ultimately, President Clinton feels that the White House has done more than balance the budget. He said, "We have restored the balance of the values in our policy, restored the balance of confidence between government and the public."