Clinton Proposes Eliminating Debt by 2013 in Next BudgetBy Art Pine and Nick Anderson
LOS ANGELES TIMES -- WASHINGTON
President Clinton said Tuesday that the budget he will send Congress Feb. 7 will propose paying off the entire $3.6 trillion national debt by 2013 -- two years earlier than had been expected even a few months ago.
At a news conference, the president attributed the opportunity for a speedup to an economy that is even stronger than had been forecast, resulting in higher tax revenues and lower expenses, and to his own austere budget policies.
At the same time, the nonpartisan Congressional Budget Office issued revised estimates projecting that the federal budget surplus over the next 10 years is likely to top $1.9 trillion -- substantially larger than it had predicted as late as last December.
The CBO also acknowledged that, contrary to previous estimates, congressional Republicans managed to keep from draining any of the surplus in the Social Security trust fund in fiscal 2000, even though they breached the overall budgetary spending caps that Congress set in 1997.
The agency’s estimates showed that, instead of dipping into the Social Security fund by $17 billion, as it had projected in December, the lawmakers actually would end up with the trust fund intact and a $23 billion surplus in the government’s operating budget.
Republicans quickly called a news conference to proclaim victory in their battle to prevent any further drain on the Social Security trust fund. “It turns out that we are right (and) the other side was wrong,” Senate Budget Committee chairman Pete V. Domenici, R-N.M., said.
Tuesday’s developments set the stage for another yearlong skirmish in the battle over what to do with the burgeoning federal budget surpluses that the government is now projecting for the next decade. The latest projections are also expected to be converted quickly into cannon fodder in this year’s presidential and congressional election campaigns.
Republicans want to continue boosting defense spending and to enact sweeping new tax cuts for those with the heaviest tax burdens -- mostly individuals and couples in the middle and upper income brackets.
However, Clinton, who has announced plans for modest new spending programs in his fiscal 2001 budget next month, wants lawmakers to keep the lid on most government outlays and use most of the massive savings to pay off the national debt.
“Now is not the time to let up on a strategy that is plainly working,” the president told reporters at a news conference intended to call attention to the improved prospects for debt reduction. He asked the Republican majority in Congress “to put politics aside and join me.”
Clinton also used the impromptu news conference to claim credit for the improved budget picture and to divert attention from the new CBO estimates, which support GOP assertions that Republicans succeeded in “protecting” the Social Security surplus.
Republicans made what they called “saving” Social Security a major political theme last year. For most of the last 40 years, the government has been borrowing from the Social Security trust fund to finance some of the deficit in its day-to-day operating budget.
The Republicans also took credit for the continuing improvement in the budget picture and for the progress that the government has been making in using part of the large surplus to pay off the national debt.
However, Sen. Slade Gorton, R-Wash., told reporters that Republicans are divided over whether to use the coming surpluses to pay off the remaining national debt or to return the money to taxpayers in the form of massive tax cuts.
The White House said Tuesday that the Treasury had paid off $140 billion of the national debt over the last two years and CBO estimated that the government ran an overall surplus of $176 billion in fiscal 2000, all of which will go to pay down the debt.
Economists argue that paying off the debt results in substantial benefits by helping to push interest rates down, reducing borrowing costs for both businesses and individuals. It also saves the government billions of dollars in interest costs.