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President Clinton Submits First Balanced Budget in 30 Years

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Office of the Press Secretary

For Immediate Release February 2, 1998


East Room

10:44 A.M. EST

THE PRESIDENT: Thank you very much for that warm welcome. Good morning. Thank you, Mr. Vice President, Mr. Bowles, members of our economic team, members of the Cabinet and administration. And I thank the large number of members of Congress who have come here today, and others, all of you here for the submission of the first balanced budget in 30 years, one that will truly strengthen our nation for the 21st century.

This budget marks the end of an era, an end to decades of deficits that have shackled our economy, paralyzed our politics, and held our people back. It can mark the beginning of a new era of opportunity for a new American Century.

Consider what has been achieved in so short a time. In the 12 years before I took office, trickle-down economics led to an explosion in the federal deficit which quadrupled our national debt in only 12 years. Government deficits soaked up trillions of dollars in capital that should have been used for productive investment. Massive deficits led to high interest rates that slowed growth. And massive deficits also paralyzed the Congress in their attempts to invest in our future, as we spent more and more and more of the taxpayers' dollars just to pay interest on the debt we had run up.

The new economy was being held back by old political ideas and arrangements. The deficit was more than an economic reality; it was a powerful symbol that government had simply failed to meet its most basic obligations. And doing something about the deficit was one of the reasons I ran for President in 1992.

The day I took office, the deficit was projected to be about $300 billion for that year. For five years, beginning in 1993, as the Vice President said, the Congress and the American people have worked tirelessly to put our economic house in order. We have worked hard here to put our fiscal house in order. The government is the smallest it's been in 35 years. And deficit reduction has given us lower interest rates, higher investment, and, I might add, lower unemployment, more taxpayers, and more funds to invest in America's future.

That is the gamble we took in 1993 -- a gamble now that I thought was not such a gamble at all. But it did, as the Vice President said, cost several members of Congress their jobs. Wherever they are today -- wherever they are -- I hope they know and remember that we passed that budget in '93 by one vote in the Senate and by one vote in the House and we did not have a vote to spare. And everybody that stood up, and especially those who lost their seats, can know they gave 14 million Americans jobs that would not have been there otherwise and a brighter future for all the American people, and I'm very grateful for that. (Applause.)

I also want to point out, as the Vice President did, that the job to be finished and to eliminate the structural deficit, came with a balanced budget agreement last year. And we should applaud all those in both parties who were part of that. Because it will not only enable us to achieve a balanced budget, it will enable us to maintain a balanced budget long into the future if we stay with the disciplined framework that was embraced last year by very large majorities in both Houses of both parties. And that is very important. It's one thing to get the deficit down, another thing to hold it there. And that balanced budget agreement will not only go from a much smaller deficit down to balance, but also will hold it there if we stay with the discipline. We have not done all this work to let it go.

Now, I believe, if we will stay with the plan, we can balance the budget without further cuts. 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. And above all we can balance the budget and save Social Security first. (Applause.)

In other words, it is obvious that you can have a smaller government but a more progressive one that gives you a more stronger America. We've done more than simply balance the budget, more than just line up numbers on a ledger. We have restored the balance of the values in our policy, restored the balance of confidence of between government and the public. Now, we'll have a balanced budget not only next year but as far as the eye can see.

We have to use this opportunity to build a stronger America. And let's just talk about that. First and foremost, we project that the budget will not only balance, it will actually run a surplus of $9.5 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.

One of the reasons that balancing the budget has been hard is that we have insisted on a balanced budget that honors our values. Finding a way to reduce red ink without shrinking the circle of opportunity has been at the heart of our efforts. And when we started, most people said you couldn't do it. They said there is no way to cut the rest of government enough to reduce the deficit and increase investment in important areas. But that is an important achievement as well.

Now it is most important of all that we balance the budget while renewing our commitment to save Social Security. When I left Washington last week and went to Champaign, Illinois, and La Crosse, Wisconsin, I was moved by the strength and depth of the American people's priority for the surplus they created. I think they want us to save Social Security first, as well. And I hope all of you, and members of Congress in both parties, will support that.

We have a great opportunity now to take action now to avert a crisis in the Social Security system. We have a great opportunity now to be able to tell all these young people who are shadowing their Cabinet and administration leaders that Social Security will be there for them when they retire. We have a great opportunity, those of us in the baby boom generation, to tell our own children that when we retire and start drawing Social Security, it isn't going to bankrupt them to take care of us and undermine their ability to take care of their own children. We need to do this.

We don't need to take any shortcuts, we don't need to take any short-term benefits. Before we do anything with that surplus, let's save Social Security first. (Applause.)

The budget continues our efforts at education reform. As I said, it enables us to hire 100,000 new teachers working with states to reduce class size to an average of 18 in the 1st, 2nd, and 3rd grades, and to help modernize or build 5,000 schools. It helps to give our parents the tools they need to meet their responsibilities at home and at work, among other things allowing people between the ages of 55 and 65 who lose their health insurance to buy into the Medicare program.

It includes a breakthrough investment in child care through tax credits, vouchers for states, scholarships for care givers. It will help America to meet its obligations in international leadership -- meet our obligations to stabilize the world's financial markets, to pay our dues to the United Nations, to continue our support of our military so that our men and women in uniform can continue to do the job for us.

It will provide tax cuts in research and development to help meet the challenge of global climate change in a way that enables us to grow the economy while actually improving the environment. It continues to support our urban empowerment strategy, bringing more private sector investments to our hardest-pressed cities and neighborhoods while continuing to put 100,000 police officers on the streets and giving our children something to do after school, so more of them can stay out of trouble and on a path to success.

It will lead to future generations the gift of scientific and medical advances. The 21st Century Research Fund, the largest funding increases ever for the National Institute of Health, the National Science Foundation, and the National Cancer Institute, will speed the progress of biomedical breakthroughs in the fight against many of our deadliest diseases.

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.)

This budget meets the test I set out before Congress last week: no new spending initiatives, no new tax cuts unless they can actually be accomplished without adding a dime to the deficit. For more than two centuries, Americans have strengthened our nation at every critical moment with confidence, unity, a determination to meet every challenge. For too long the budget deficit, a worsening crime wave, the seemingly unsolvable welfare difficulties -- they all seemed to challenge our innate American confidence. In the past five years, the American people have met these challenges and have moved to master them. Now we have a chance, in a period of peace and prosperity with renewed confidence, to build for the future. That's what this balanced budget does.

Now, it is --I am going to close my remarks now, by asking the Vice President to give me a magic marker so that I can be the first person to actually certify what the budget will say for the coming year. Even we can do this. I am technologically challenged, therefore, we're not doing this on a computer. (Laughter and applause.)

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