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President Clinton Releases Final Economic Report

Aired January 12, 2001 - 11:08 a.m. ET


DARYN KAGAN, CNN ANCHOR: The president of the United States, President Clinton, coming up to the podium at the White House. He is headed to Bethesda Naval Hospital for a checkup, but first some comments about the economy.


Today I am sending my eighth and final economic report prepared by the Council of Economic Advisers. I want to thank Dr. Martin Baily, Kathryn Shaw, Robert Lawrence and the CEA staff for their fine work in analyzing America's new economy. I also want to thank Secretary Summers, Gene Sperling, Jack Lew, Sylvia Matthews, my entire economic team for all they have done these last eight years to turn our country around and move us forward together.

Over the last eight years, these annual economic reports have helped to tell America's story, a story of prosperity and progress, of the hard work of our people, and the results of policies rooted in common values and common sense.

The message of this final report is clear: The economy remains strong, on a sound foundation, with a bright future. Eight years ago, it was a very different story, with 10 million of our fellow citizens out of work, high interest rates, low confidence, a deficit that was $290 billion and rising, a debt that had quadrupled in the previous 12 years.

The new course we charted -- to eliminate the deficit, invest in education and the American people's future, and open overseas markets for America's products -- has worked. Year in and year out, we have resisted politically attractive but economically unwise temptations to veer from the path of fiscal discipline.

We have in the course of this effort turned the record deficits into record surpluses and produced the longest economic expansion in history. We have not only had 22.5 million new jobs and the lowest unemployment in 30 years; we've been able to add to the life of both Medicare and Social Security, to help ease the burden on future generations and make the long-term solutions less difficult in the present.

And we're on track to do something that was unimaginable eight years ago when I first came here, to get America out of debt at the end of this decade.

The evidence in this report shows that maintaining the track of fiscal discipline is critical to keeping America on the path of economic progress. Fiscal discipline has allowed the energy in entrepreneurship to the American people to increase investment, productivity and living standards. Fiscal responsibility has given us lower interest rates, which by the end of the year will be -- excuse me -- it's given us not only lower interest rates, it's given us surpluses that by the end of the year will have permitted us to pay down about $560 billion off the national debt.

And I think all of us are very proud that we can leave that legacy to the incoming administration and to the children of this country.

More important in an economic sense perhaps is that it has lowered interest rates. By having the government pay back debt instead of borrow more money, you have lower interest rates for business loans, college loans, home loans, car loans, that amounts on the average to $2,000 in mortgage payment savings a year for the average family, $200 in car payments, $200 in college loan payments.

It has also given us higher growth. Now over the last couple of years, the economy was growing at a blistering pace.

Everyone knew that the rate of growth would ease off, but that is not to say that the evidence suggests anything other than that the expansion will and should continue.

And so, that's the context in which we have tried to work for eight years and the options that we leave to our successors and there are many options.

I have repeatedly said American can afford a tax cut, but I do not believe that the tax cut plus whatever spending plans there will be should be so large as to take off the path of fiscal discipline: for a simple reason, paying down the debt keeps interest rates lower. That means stronger businesses, higher incomes, more jobs, a stronger market. Keeping those long-term rates down is profoundly important.

So what I would hope for the future, when the Congress deliberates this and the president makes his proposal, the details are up to them. I'm moving out of the policy business, in just a few days here.

But I would hope that the combined total of the tax cut and the spending plans would not be so large as to call our commitment into fiscal discipline into question in a way that would run the risk of returning to on-budget deficits, higher interest rates and, in the process, would drain away the savings that will be needed to deal with the Social Security and Medicare challenges the retirement that the baby boomers will present.

Eight years of responsible budgets and fiscal responsibility have put our country in a position to take advantage of our long-term opportunities and to meet our long-term challenges. It's a path that I hope we'll be able to stay on. I would like it very much if our country were debt-free by the end of this decade for the first time since 1835. Even more, I would like it if we were able to free up 11 cents on the dollar of the federal budget to deal with Social Security, Medicare, invest in education, and provide further tax cuts in the future.

So I think we're in good shape. I think I'm leaving with all options open. And the only cautionary point I want to make is I think that the combined impact of spending and tax cuts, I would hope, would not be such as to prevent us from continuing to pay down this debt so we can keep interest rates low and the economy strong over the long run.

Thank you.

QUESTION: Mr. President, survivors of the No Gun Ri killing say that the U.S. report is a whitewash and that your statement of regret does not offer a sincere apology. How do you respond to that criticism? And did you intend your statement of regret to be an apology?

CLINTON: Well, I think on a personal basis, as I said yesterday, I don't think there's any difference in the two words. They both mean that we are profoundly sorry for what happened and that things happened which were wrong.

I think the word which was agreed on, working with the Koreans, pursuing the investigations, was thought to be appropriate in a, if you will, a legal and a political sense, because the evidence was not clear that there was responsibility for wrongdoing high enough in the chain of command in the Army to say that, in effect, the government was responsible.

I think that was the real issue.

But I don't think, from purely human point of view, I don't think there's any difference in the fact that we know things happened, which should not have happened, and things were done which should not have been done. Innocent people died and others were wounded. Their families were wounded and remain wounded to the present day, and we are profoundly sorry about that.

So I don't think, in terms of the human impact and the acknowledgement that things had happened that shouldn't have happened that were wrong, I don't think there is any difference.

And I certainly told the investigators, I didn't want the investigation whitewashed. We did our best to find out what happened and to determine the facts as best we could.

And we issued a joint statement, in sort of path of proceeding, with the Korean government. I talked to President Kim last night about it. And we've done our best to do the right thing.

QUESTION: Mr. President, do you believe that President-elect Bush's comments about the economy, slowing economy and the vice president's comments about that the economy is possibly heading towards recession is actually a self-fulfilling prophecy and, perhaps, potentially dangerous talk?

CLINTON: Well, I don't want to get into characterizing that. I think it's not wise for me to do that, and not appropriate.

I can only tell you what I've tried to do for eight years. What I've tried to do for eight years is to level with the American people, based on the evidence, and to be conservative in my estimates when it came to the tax cuts I advocated and the spending I advocated.

The evidence is, the blue chip consensus is for growth of about 2.6 percent next year, slightly slower in the first half of the year and more robust in the second half, and they have written that down from a previous projection of something over 3 percent. If we grow at 2.6 percent, then the unemployment rate should stay around where it is now and we will continue to create new jobs.

So that's what the evidence is today. And if the evidence changes, then everyone should look at what the facts are and act in an appropriate way. But the experts who make a living doing this believe the economy will grow at 2.6 percent next year, slightly slower in the first six months, slightly more robust in the second six months.

KAGAN: We've been listing to President Clinton from behind the White House. He is talking about his final report from his Council of Economic Advisers. The president saying that he believes that the economy is still strong, slowing down a little bit. And right now he is warning against large tax cuts. He would rather see other types of fiscal discipline. And, of course, tax cuts being a big priority for the incoming president, George W. Bush.



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