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President Clinton Announces Largest Budget Surplus in the History of the Federal GovernmentAired September 27, 2000 - 9:57 a.m. ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
DARYN KAGAN, CNN ANCHOR: As promised, we go live to Washington, D.C. and the White House. Here is President Clinton.
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WILLIAM J. CLINTON, PRESIDENT OF THE UNITED STATES: ... and the poverty rate has fallen to its lowest level in 20 years. Today there's more good economic news.
Eight years ago, our future was at risk. Economic growth was low, unemployment was high, interest rates were high, the federal debt had quadrupled in the previous 12 years. When Vice President Gore and I took office, the budget deficit was $290 billion, and it was projected this year the budget deficit would be $455 billion.
The American people, thankfully, chose a better future. They put their support behind a new economic direction of fiscal discipline, greater investment in our people, expanded trade in our products. It's given us the longest economic expansion in history and the strongest fiscal turnaround in memory. Record budget deficits have given way to record surpluses. And this has enabled us to do something that would have been impossible just eight years ago -- we've actually begun to pay down the debt.
Today we received more good news that our strategy is working. According to the Office of Management and Budget, this year's budget surplus will be at least $230 billion. With this surplus, we've been able to cut the debt over the last three years by this figure -- (writes the number on a chart) -- $360 billion in debt reduction over the last three years.
This year alone we've cut the debt by at least $223 billion, the largest one-year debt reduction in the history of the United States. Like our Olympic athletes in Sydney, the American people are breaking all kinds of records these days. This is the first year we've balanced the budget without using the Medicare trust fund since Medicare was created in 1965. I think we should follow Al Gore's advice and lock those trust funds away for the future.
We've come a long way since then, and a long way since 1993. But we can go further still. If we stay on the path we're on, we can pay this debt off entirely by 2012, for the first time since Andrew Jackson was President, in 1835. Paying off the debt will benefit America, just as paying off credit cards benefits the average family. It frees up money for the things that matter, and it keeps interest rates lower. That will mean more investment, more jobs, lower mortgage payments, car payments, and student loan payments. This is all terribly important.
Already the benefits of debt reduction have meant about $2,000 a year -- or deficit reduction, and then debt reduction -- has been about $2,000 a year in lower interest payments for home mortgages, about $200 a year in lower interest payments for cars, about $200 a year for lower interest payments on college loans. And if we stay on this path, rather than go back and spend all the surplus and get back into the Social Security funds, it will keep interest rates about a point lower over the next decade. That will be worth in home mortgages alone over $300 billion.
So this is a very important thing to do. And I hope that we will see a continuation of this trend in this year's final end-game budget negotiations. However, the fiscal year is almost over and Congress still has sent me only two of the 13 spending bills. We need to put our priorities in order and put the broad national interest above special interest.
The key to fiscal discipline, to these kinds of results, is maintaining it each year, year after year. If you look at what's happened in the last eight years, federal spending today as a percentage of the economy is the lowest it has been since 1966. The federal civilian work force is the smallest it's been since 1960, down 377,000 from the day I took office.
I am concerned, frankly, about the size and last-minute nature of this year's congressional spending spree, where they seem to be loading up the spending bills with special projects for special interests, but can't seem to find the time to raise the minimum wage, or pass a patients' bill of rights, or drug benefits for our seniors through Medicare, or tax cuts for long-term care, child care, or college education.
And first and foremost, they haven't found the funds for education, for continuing to hire 100,000 qualified teachers to reduce class size, to build and modernize schools, to provide after-school for children who need it, and have real accountability for failing schools, requiring them to turn around or shut down or be put under new management.
These are the things that need to be done, and I certainly hope they will be. We can finish this year...
KAGAN: We are listening to President Clinton, as he speaks at the White House, announcing the largest budget surplus in the history of the federal government. It will be $230 billion for the fiscal year. Much of that money being Used to payoff the national debt.
Of course, the debate will continue on the campaign trail about what that surplus money should be used for.
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