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Clinton Announces Revised Budget ProjectionsAired December 28, 2000 - 12:36 p.m. ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JEANNE MESERVE, CNN ANCHOR: And let's go right to the White House briefing room with some new budget predictions.
WILLIAM J. CLINTON, PRESIDENT OF THE UNITED STATES: I wanted to take this opportunity to say a few words about our latest budget projections and what they say about the continuing strength of the American economy.
We began eight years ago to put our fiscal house in order at a time when the federal deficit was $290 billion and rising and the national debt had quadrupled in the previous 12 years. Interest rates were high, growth was low, and the confidence of the American people was shaken.
Our new strategy of fiscal discipline, investing in our people and expanding trade has helped to bring us the longest economic expansion in history that has given us a chance, along with continued fiscal discipline, to balance the budget, to turn decades of deficits into the biggest back-to-back surpluses in history.
Over the past three years, we have paid down our national debt by $360 billion. Today, we received more good news. Our updated projections show that in this fiscal year alone, we expect to pay down the debt by an unprecedented $237 billion, meaning that over the course of just four years, we will have paid down the debt by $600 billion.
When I took office, our nation's debt was projected to be $6.4 trillion this year. At the end of this year, it will instead be $3.2 trillion, half of what it was projected to be. It will be 31 percent of our annual gross national product. In 1993, it was 50 percent of our gross national product.
In interest rates savings alone, there will be, in one year, this year, $166 billion. This year, we will spend $166 billion less in interest on the debt than we were projected to be spending eight years ago.
There's more good news in these numbers. Let's start with what the budget experts call the baseline; that's a budget that just increases with inflation and no new initiatives.
The new projections show that if we took that budget and committed the entire surplus to reducing the debt, we can make America debt-free by 2009. Of course, no one is suggesting that any administration in Congress will go that long with no new initiatives. 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.
If the incoming administration and the new Congress make such decisions, they could still get us out of debt early. And I want emphasize, obviously, it is for the incoming administration and the new Congress to decide exactly which priorities to address in and what manner.
But these new projections mean that a fiscally responsible approach that includes new investments similar to the ones I described would still permit us to make America debt-free by the end of the decade. In other words, two years earlier than the last time we met.
Therefore, even though I told you I'd never draw on another one of these charts...
... because there's more good news, I'm going to do it.
But this is the last time I will do it -- this year.
It means we can get out of debt by 2010. Now, that is a future that all Americans can look forward to. And we don't wait to reap the benefits of this sort of debt reduction.
By paying down the debt, we have already helped to keep interest rates down. Indeed, this is an amazing thing. Secretary Summers told me this before I came out here: After eight years of very strong economic growth, long-term interest rates are about 2 percent lower than they were when I took office. That's meant lower mortgage payments, lower car payments, lower student loans, lower business loans. It's freed up more capital for private sector investment.
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.
If we stay up on the path that got us here, by 2010 we will free up 12 cents of every dollar the American people pay in taxes. That can go back to them in tax relief or it can go into investment in our common future.
And that is a profoundly important thing. Just think of it. In nine years, 12 percent of the federal budget now committed to interest on the debt could be gone, and that money then would be free for tax relief or for investment in our future.
I think, as I have said many times, that as these interest rates go down, some of this money ought to be dedicated to Social Security, because no matter what path you take to preparing for the retirement of the baby boom generation, any of the proposed scenarios have significant associated costs. And one of the ways to do this, and a way that is painless to the American people, is to take advantage of the fact that you're not going to be making interest payments that previously would have been made.
This shows the long-term consequences of a long-term, responsible budget policy. There are huge economic benefits.
And if we continue, then we can honestly say for the first time since Andrew Jackson was president in 1835 that children of America will face the future unburdened by the mistakes of the past. That is something that I believe we ought to do.
And the American people have earned an unprecedented opportunity to build that kind of America for our children, and I hope will do it.
Thank you very much.
QUESTION: Mr. President, since last we asked you about the Middle East yesterday, there have been a number of developments. There have been bombings in Tel Aviv, an ambush. Prime Minister Barak did not go to that summit meeting in Egypt. What does that make you think about the prospects for nailing down a final agreement while you're still in office?
CLINTON: Well, first of all, I condemn the violence. And I believe it is the violence and the bus that prevented the prime minister from going to Egypt. I don't think it is the lack of desire to pursue the peace process.
Chairman Arafat is consulting with President Mubarak, and I believe wants to talk to some of the other Arab leaders.
The important thing to note is that Israel has said -- I put some ideas on the table, they go beyond where we were at Camp David, they meet the fundamental needs that both sides expressed at Camp David -- and Israelis said that would agree to try to close the remaining gaps within the parameters of the ideas I put forward if the Palestinians will agree.
And I think that this latest violence only reminds people of what the alternative to peace is.
Look, I expect there to be more in the next few days as long as we are moving towards peace. There are a lot of enemies of peace in the Middle East. And there are a lot of people that have acquired almost an interest in the preservation in the status quo and the agony of the Israelis and the abject misery of most of the Palestinian population. So I expect that we will have to continue to combat violence.
But if we can get a peace which meets the fundamental long- standing desires of both parties, and we start to have common efforts in security that go even beyond what we've had for the last few years, and we start to have common efforts to build an economic future that benefits everyone, we will have more political and economic stability, and we'll have a different future.
But in the meanwhile, this thing's been going on a long time, and a lot of people don't want to give it up. And so they're going to try to disrupt it.
But if you just look at the last few months, it's the best argument for going ahead and finishing this. It's not going to get any easier.
So this is by far the closest we have ever been. We are much closer than we were at Camp David. But there are still differences, and, you know, we're just waiting.
The Israelis have said that they will meet on these conditions, within the parameters that I laid out and if the Palestinians will, and the Palestinians are negotiating or talking -- excuse me -- with the other Arabs, and we'll just see what happens.
QUESTION: Did the president-elect have any influence on your decision not to go to North Korea?
CLINTON: No. He said -- actually we had a very, very good talk about it, and he did not discourage it at all. And it would not be fair to put that on him.
Let me just say, I briefed him on what I was doing. I told him that Sandy Berger and Secretary Albright had talked to General Powell and Condi Rice about it, and I explained what we were trying to do.
But I also told him that I wouldn't take the trip unless I thought that I had time to organize it and devote the time to it to make it right, because I was convinced that because of the leadership of President Kim in South Korea and because of the very good talks that we have had with the North Koreans and the success we've had now for six years on the nuclear issue, that further progress could be made, and that it might just have to be something that was done when he became president. And that is the conclusion I made.
We've made a lot of progress with the North Koreans. On what we're discussing now, on the missile issues, we've made a lot of progress.
But I concluded that I did not have sufficient time to put the trip together and to execute the trip in an appropriate manner in the days remaining.
QUESTION: Were they willing to go for a...
CLINTON: I think that's all I should say. We made a lot of progress with them. And I believe that the next administration will be able to consummate this agreement. I expect visits back and forth. I think a lot of things will happen. And I think it will make the world a much safer place. I feel very good about what we've done.
I simply concluded that, in the days I have remaining, I didn't have the time to put the trip together in the proper way and to execute it in proper way, and so that's why I decide not to go. You should not infer from that I'm unconcerned about it. Indeed, I'm very pleased with the progress that has made, and I expect the next administration to build on it, and I think they'll be pleased too, when they look at the facts.
QUESTION: Mr. President, in your remarks on the budget, you almost seem to be addressing an audience beyond this room and beyond most people on television. You seem to be addressing your remarks to the next administration.
What impact do you think a tax cut of the proportions that George W. Bush campaigned on would have on the course of the arrow on your chart?
CLINTON: Well, first, 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. But you can't see any of this in isolation. You have to say, the real issue is on the fiscal side is: What is the revenue estimate? Are you being conservative? We always were. And even these reflect, by the way, pretty conservative estimates, because you can always have a bad couple of years and it throws everything off.
And then it's not just a question of the tax cut. You have to ask yourself, in all these things, when you all are doing the math in your head, you have to do the tax cut plus whatever extra spending there will be plus whatever you do on Social Security. And it's the aggregate amount of money here; it's not just a question of the tax cut.
So don't really think I can comment, nor do I think I should comment on the specifics. I'm more interested in the big picture, the arithmetic issues.
But I'm just saying that I believe, as long as we can do so, we should be shooting for a debt-free America by the end of the decade, because I think that that will strengthen our country enormously.
QUESTION: Mr. President, what can you tell us about the Clinton family debt picture? Is there a new house in the future here in Washington, D.C.?
CLINTON: Well, I hope so. Hillary's got to have some place to live, but we haven't closed a deal yet. If we do, we'll let you know.
She needs an address, and I'd like to have some place to come see her.
QUESTION: Will you be able to afford all that, Mr. President?
CLINTON: Well, I hope so. You know, I'm going to go out and go to work. And I think...
CLINTON: I expect to make a living, and I'll get out of your hair and get out of the media spotlight and go back to making a living. And I expect -- I'll do a -- well, I'll write a book and do a few other things. But I think...
QUESTION: For $8 million?
CLINTON: I'll think I'll be able to support her.
Well, I don't know. I don't have two bestsellers to my credit like she does, so I don't know.
QUESTION: Mr. President, back on the Middle East, two elements seem different now than were present at Camp David. First of all, the outlines of the peace proposal are open. Everyone can take a look at them.
And, second, there seems to much more of an effort to involve Arab leaders as the negotiations move forward.
Those two things were not present at Camp David, yet the Palestinians still are holding back. What do you think is holding them back? And what do you think will push them across the line and move this forward?
CLINTON: Well, I think the -- first of all, I think that while we have talked to all the Arab leaders, I'm not sure that Mr. Arafat has gotten to talk to enough of them. I think that he believes -- he has always believed, I thought, that he was representing not only his people but the larger Arab world and, in some ways, the larger Muslim world, in the Jerusalem issues. So I think that, you know, he's trying to work through that.
As I said repeatedly over the last several years, I think when you are in a period like this -- that is, where we are sort of, the thing is in a gestation, and it's either going to go forward or it's not -- I think, you know, the less I say about it, the better.
QUESTION: Mr. President, is your decision not to impose sanctions on Japan for their whaling program a reflection of the fact that you view your friendship with Japan more important than the environment?
And, as a follow-up, how do you expect the Bush administration to go through with Japan-U.S. trade relations?
CLINTON: Well, the first thing is, the answer the first question is no. We are working this whaling issue, and, you know, we have serious disagreements with them about it, and we have some options we are pursuing.
You know, is our security relationship with Japan important? Of course it is. Is our larger economic relationship important? Of course it is. Is this whaling issue a big deal? Yes, I think it is. And I think so -- I'm trying to leave this situation in the best possible light for my successor to look at all available options and go forward. That's what I'm trying to do.
QUESTION: But how can you impose sanctions when the deadline has already past?
CLINTON: Well, there are lots of other things that can be done on this, though, in the future. And I did what I thought was right, given all the factors involved, but I still think this whaling issue is an important issue. I understand the role it has in Japanese culture and the political impact of the interests that are involved in it, but I think, you know, they're going to have to modify their practices.
QUESTION: Are you going to sign the world criminal court treaty?
CLINTON: I haven't decided that. I have a couple of days, and I'm getting the last paper on it, and then I'm going to discuss it with our people.
QUESTION: Back to the Middle East, have you given the Palestinians any sort of deadline to give you an answer, or are they going to be given an unlimited amount of time to decide? And also, do you expect them to come here, or do you need to talk to them again before you can see any major headway?
CLINTON: Well, first of all, I think it's obvious we're all operating under a deadline.
We're all operating under a deadline, it's just some of us know what our deadline is.
So what I have said to them is, there's no point in our talking further unless both sides agree to accept the perimeters that I've laid out, not because I'm trying to dictate this, but because I've listened to them for months and months and months, indeed for 8 years. And if this is the most difficult of all the issues I've dealt with, that there is a peace agreement here, I'm convinced it's within the four corners I laid out.
They both have legitimately a lot of questions, and they ought to ask those questions and get answers to them. But there's no point in even doing that unless we've got a basic framework so we can close.
The time has come to close here. And the last several months has shown us that this is not going to get any easier, and prolonging it is only going to make it worse. So I'm doing my best to facilitate what I think is what they want, which is to try to resolve this.
Yes, go ahead.
MESERVE: You've been listening to President Bill Clinton taking questions in the White House briefing room. He came in to the briefing room to talk about the budget but took questions on a number of topics, including the Middle East. He condemned the violence there today. There have been explosions in Gaza, also Tel Aviv. He blamed those on the enemies of the peace process. He said that the best argument for going ahead is exactly that kind of violence. Still waiting, of course, for an answer from the Palestinians on the proposals he put on the table. He said, we will see what happens.
He talked a bit about his own future, saying, I'm going to get out and go to work, get out of your hair and get to the business of making a living. He said he'd write a book and do a few other things. He didn't say exactly what those would be. But his principle topic today was budget numbers. He said that this year, $237 billion will be put towards paying down the national debt. He said the debt at the end of the year will be $3.2 trillion. That's half of what had been anticipated. He said if things go forward as he would like them to, by the year 2010 12 cents of every dollar U.S. taxpayers paid could be given back to them or invested in America's future, his suggestion that it be invested in Social Security.
Joining us now, Bill Schneider, CNN senior political analyst. He's out in Los Angeles.
Bill, the president refused to, when invited, to take direct aim at Governor Bush's proposal for a $1.3 trillion tax cut. Why?
WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Because he thought it would be politically -- he didn't want this to turn into a political name-calling match, because the implications of what the president said were, I think, clear. He associated his administration with what he called a "responsible budget policy," he said fiscal discipline and trade have taken us down the path to a long -- the longest economic expansion in history. He said that this nation, if we continue on the current path, will be out of debt -- America, imagine, will be out of debt -- by the year 2010.
The implications of that are clear. If we start out with a huge tax cut along the lines that Governor Bush has proposed in his campaign, that could spoil what President Clinton calls his good economic record.
MESERVE: Bill, I couldn't help but wonder as I heard him tick off the benefits of this great economic growth, lower car payments and mortgage rates and everything else, why this issue never worked for Al Gore.
SCHNEIDER: It's interesting. The tax-cut issue really was something that George Bush ran on very clearly. Gore tried to argue that the Democratic Party was the party of fiscal discipline, fiscal stability. Let me tell you something, Jeanne, the Republicans ran for 50 years, starting in the early 1930s when Roosevelt became president, on the issue of fiscal discipline, and it never really got them very far. They said that we have to cut the budget, we have to be responsible, we have to cut spending.
So now the Democrats -- you just heard President Clinton -- the Democrats have adopted fiscal discipline as their theme. And they're claiming to be far more responsible in their handling of money than the Republicans are. It just didn't work for Gore any better than it worked for all those Republicans.
President Bush, President-elect Bush is talking about not new spending programs but a tax cut. But it's the same thing, bottom line. It's a use of federal money that would not be to pay down the debt. So it didn't work for Gore, and it rarely worked for Republicans in the past.
MESERVE: Bill Schneider in Los Angeles, thanks so much for joining us.
And our apologies to those of you who were hoping to see more of BURDEN OF PROOF.
Coming up next "CNN TODAY," with Lou Waters and Andria Hall.
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