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Clinton announces larger White House budget projections, advocates debt payment

WASHINGTON (CNN) -- President Clinton announced updated White House budget projections Thursday which forecast a larger federal surplus over the next 10 years, but the projected surplus is less than what some GOP analysts had hoped.

Clinton
Clinton: "A fiscally responsible approach that includes new investments ... would still permit us to make America debt-free by the end of the decade."  

The figures, released by the Office of Management and Budget (OMB), indicate a roughly $800 billion increase from previous 10-year surplus projections, from $4.2 trillion to $5 trillion.

"These are conservative numbers," Clinton said at a White House news conference.

Last week, an official with the GOP-controlled Congressional Budget Office (CBO) hinted that the 10-year surplus could grow to as much as $6 trillion over the same 10-year period, a scenario which would provide ample room for President-elect George W. Bush's proposed $1.3 trillion tax cut plan without eroding the Social Security trust fund.

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U.S. President Clinton comments on the release of new surplus numbers by the Office of Management and Budget

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Both the OMB and CBO offices include general government revenues and Social Security funds in their projections. The latest OMB figure would place the non-Social Security surplus at roughly $1.9 trillion.

How to spend the federal government's unprecedented surplus dominated the discourse of this year's hotly contested presidential race. Democrats argued that the money would be better spent on targeted spending for government programs and tax cuts, and paying down a larger portion of the $5.7 trillion federal debt.

"I have often said that I believe we should use a portion of the surplus to make critical investments in education, provide prescription drug benefits through Medicare to our seniors and have a targeted tax cut," Clinton told reporters.

"A fiscally responsible approach that includes new investments ... would still permit us to make America debt-free by the end of the decade," he added.

The president said that the government will pay down $237 billion in federal debt during fiscal year 2001. He has long argued that reducing the debt translates into lower interest rates and substantial savings on mortgages and auto loans for millions of Americans.

"We aren't borrowing the money that people thought we would be borrowing in the government, and that means there's more money for others to borrow at lower costs.

The new White House numbers also reflect new legislation and increased spending passed by the recently adjourned 106th Congress. After months of tedious and prolonged budget wrangling, Democrats and Republicans agreed on a final package which includes nearly $7 billion in increased education spending and allocates an additional $30 billion to Medicare providers.

Amid tumbling stock markets and signs of economic slowdown, some congressional Republicans have suggested the president-elect should take a piecemeal approach to reducing taxes, beginning with measures to repeal estate taxes and the so-called "marriage penalty" paid by two-earner couples.

Bush met with congressional leaders from both parties last week and argued that his entire tax-cut package would serve as an insurance policy in the event of a much-feared economic downturn. The president-elect has said that the plan would not jeopardize the Social Security trust fund.

Clinton made no statement on the Bush tax-cut plan Thursday, telling reporters: "I don't think it's appropriate for me to comment on the specific decisions they will have to make and the Congress will make."

The Bush administration is expected to make new projections for the surplus when it releases its own budget proposals in the spring.

CNN White House Correspondent Major Garrett andReuters contributed to this report.

 
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Thursday, December 28, 2000


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