THE WHITE HOUSE
Office of the Press Secretary
|For Immediate Release|| ||September 30, 1998|
REMARKS BY THE PRESIDENT
ON THE SURPLUS
Old Executive Office Building
11:21 A.M. EDT
THE PRESIDENT: Thank you very much. Let me begin bysaying to Kay McClure, we thank you for being here. All of us whohave been a part of this effort to tame the deficit and to turn oureconomy around, we did it for people like you. And I think you madeeverybody here proud to be an American, and everybody who was part ofthat project proud of that.
I'd like to thank the members of the Cabinet andadministration who are here, and the former Cabinet members. I wouldalso like to say that we invited Henry Fowler, who was PresidentJohnson's Treasury Secretary the last time the budget was balanced,to come here, but he couldn't come because of hip surgery. Ourthoughts are with him and his thoughts are with us today.
I want to thank Senator Moynihan and Senator Robb,Senator Rockefeller, Senator Breaux, Senator Conrad, Senator Dorgan.Mr. Sabo, who was our chair, along with Senator Moynihan back in '93;and Congressmen Boyd, Brown, Edwards, Filner, Congresswoman Furse,Congressman Hastings, Hinojosa, Markey, Vento, Wise, and CongressmanThurmond for being here.
The Vice President also noted that there were severalformer members of Congress here who voted for the budget in 1993.There are quite a number here, and since they -- most of them who arehere paid quite a high price for doing what makes it possible for usto be here today, I'd like to ask them to stand. Would every memberof Congress who is no longer a member of Congress, who was here andvoted for that budget in '93 please stand. (Applause.) Thank youvery much. Thank you.
Mark Twain once said that two things nobody should everhave to watch being made are laws and sausages. And the aftermathsometimes is not very pretty. They and many others had to endurebeing accused of raising taxes on people they didn't, being accusedof not lowering taxes for people they did, and all manner of otherperfidy to try to bring us to this moment -- to break the spell thathad gripped America and led to a quadrupling of the debt of thiscountry in the previous 12 years. And a lot of the people who arestill here took very significant risks, as well, and set the stagefor what has been done since.
Let me ask you to begin by just thinking about what 29years means. Twenty-nine years ago Neil Armstrong walked on themoon, Bonanza was one of our top-rated TV shows, and Sammy Sosa wasone year old. (Laughter.) We have waited a long time for this --not quite as long as we waited for Roger Maris' record to be broken,but nearly.
For 29 years, the last day of the fiscal year was not aday of celebration, but a day we were handed a powerful reminder ofour government's inability to live within its means. In the 12 yearsbefore this administration took office the debt quadrupled, partisangridlock intensified and a crushing debt was being imposed on ourchildren. These deficits hobbled economic growth, spiked interestrates, robbed too many people of their chance at the American Dream.
The end of this fiscal year, obviously, is different asthe flashing sign behind me shows. Tonight at midnight, America putsan end to three decades of deficits and launches a new era of balancebudgets and surpluses. While the numbers will not be official untilthe end of the month, we expect the 1998 surplus to be about $70billion. (Applause.) Thank you.
This is the largest surplus on record and, as apercentage of our economy, the largest one since the 1950s. Oureconomy is the strongest in a generation. That's why we see thedeficit clock has become a surplus clock. It will tally the growingopportunities of the 21st century. It is a landmark achievement notjust for those in the room who have played a role in it, but indeedfor all the American people. And it will be a gift-givingachievement for generations to come.
I want you to think about what this means for ourdemocracy and also what it means for our obligations now. First andforemost, as our previous speaker so eloquently noted, balancing thebudget has brought tangible economic benefits to the American people.
In the 1980s, high interest rates kept entrepreneursfrom starting new businesses. Tight money made it harder for peopleto buy a new home. When I came to Washington six years ago nearlyeverybody felt our economy was drifting. College graduates werehaving a hard time finding jobs; factory workers were seeing theirindustries fall behind foreign competition. The deficit then was$290 billion and projected to be over $350 billion this year alone.
But even more than the economic problems, the deficitseemed to be Exhibit A for those who claimed that America was indecline. The notion seems preposterous today. But it's worthremembering that just a decade ago the idea of America in decline waswidely accepted in some circles, not only here, but around the world.There were works of scholarship suggesting we were bound to go theway of other powers who had risen and then fallen. There was alittle defeatism that became part of the conventional wisdom here inWashington, symbolized by this national government that wasinefficient, ineffectual and insolvent. And, therefore, thegovernment became the poster child for what people said was happeningto America. The two political parties seemed inevitably locked in aseries of false choices between old ideas competing in a very newtime.
But a funny thing happened on the road to Americandecline. The American people stepped in. Just as we have at everycritical juncture in our history, the people came together once againto become the captains of our fate, the commanders of our destiny.That is really what we celebrate here today. (Applause.)
The American people simply demanded a new direction.They demanded that our government put its house in order. Theydemanded that America's greatness be reasserted, that opportunity beprovided again to all who are willing to work for it. They demandedthat we be able to say with confidence that the greatest days of thiscountry still lie before us.
And so, in 1993, the members of our party in Congress,some at the cost of their careers, took the courageous action whichbegan the road we celebrate today -- a new economic strategy thatreduced the deficit by more than 90 percent. Then four years later,Congress put progress over partisanship and passed a bipartisanbalanced budget agreement that closed the rest of the deficit gap andwill keep us in balance structurally for many years to come.
The deficit reduction has saved the American people morethan a trillion dollars on the national debt. The new strategy hashelped lead to lower interest rates, higher investments,unprecedented prosperity. We have already heard about that. Theunemployment rate is the lowest in 28 years, the percentage ofAmericans on welfare the lowest in 29 years, the inflation rate thelowest in 33 years. More than 6 million American families haverealized their dreams of owning a first home; another 10 million haverefinanced the homes they had. Today, home ownership is the highestin history. And for millions of Americans, these lower interestrates have amounted to an unofficial tax cut of tens of billions ofdollars -- making a college education, a new car, a family vacationmore affordable.
Now, balancing the budget and increasing our investmentin our people is the core of a new vision of government, one thatlives within its means; one that is the smallest in 35 years, butwith the Vice President's leadership, has been redesigned to meet thechallenges of this new era; one that cuts wasteful spending, but alsomakes significant investments in education, health and theenvironment. We have done a lot to make this new economy. But wenow have to do more to see that all of our people can participate init fully.
Our success has helped to inspire confidence here andaround the world. Six years ago, when I went to my first G-7 meetingin Tokyo, every leader told me that America was holding the rest ofthe world back and that unless we were willing to get our deficitdown we would always be a drag on the world -- we were taking moneyaway, we were keeping interest high, that it was unfair.
Well, what we have done in the last six years has alsohelped to spark economic growth elsewhere. But now that there is somuch turbulence for other reasons in other parts of the world, it isimportant to remember that our growing economy is today serving as abulwark of stability in the rest of the world and that without it therest of the world would be in much worse shape, indeed.
Now, let me just ask you very briefly before we close inthis celebration, what are we going to do with this moment ofcelebration of the balanced budget and unprecedented prosperity?What exactly are we going to do with it? That really is before theAmerican people today.
We see from troubled economies around the world, in myview, that this is not a time to simply celebrate and rest. It isnot a time to be distracted from our mission of strengthening ourcountry for the new century, of leading the world toward prosperity,peace and freedom, of bringing our people together.
For the sake of our children, now that we've balancedthe budget, I think the first thing we ought to do is commitourselves to save Social Security for the 21st century. (Applause.)The system is in very good shape now, but everyone knows in itspresent terms it is not sustainable when the baby boomers retire, andthat if we do not act now, when the baby boomers do retire, we willbe confronted with two very unpleasant choices. One is to lower thestandard of living of the baby boomers so that their children cancontinue on with their business. The other is to lower the standardof living of their children and their ability to raise ourgrandchildren so that we can live in the same manner that seniorstoday are living. Neither choice need be made if we act now withdiscipline and use the fact that we're going to have this surplus tomake a down payment and to begin with deliberation to save SocialSecurity. It is a huge issue.
Now I am well aware that it is a popular thing,particularly right here, just four weeks and change before anelection day, to serve up a tax cut -- to say, well, we've got asurplus, we're going to give you some of your money back. But all ofus know this surplus was run up over the years -- or the deficit overthe years was made smaller because we actually were taking in moremoney in Social Security taxes than we were paying out. And all ofus know that this problem is looming out there and will need money tofix. And so I think the American people have waited 29 years, and Ithink most Americans would like to see the ink change from red toblack and then just dry a little before we put it at risk.(Applause.)
But if you think about this issue, there is hardlyanything that goes to the core of what we are as a people more thanour sense that we owe an obligation to both our parents and ourchildren. And if we squander this surplus and start spending alittle here, a little there, a little yonder on the tax cuts justbecause we're a few weeks before an election, before we take care ofthis, what are we going to do when times get tough and we still haveto take care of it?
So I say to all of you again, I think that's the firstthing that we ought to do. We are not against tax cuts. There aretax cuts in this budget, as has already been said, for education, forchild care, to help small businesses provide pensions for theiremployees. There are tax cuts for environmental investments thathelp to cut energy bills. But we don't take any money out of thesurplus. We adopted a disciplined framework for the future in 1997;we ought not to depart from it. We had a bipartisan commitment tothat framework in 1997, and we ought not to depart from it.(Applause.)
The second thing we ought to do is to recognize that wehave money set aside in the budget to invest in education and we'restill a long way from having the ability to say that every Americanchild can get a world-class education. We ought to fund smallerclasses. We ought to fund the initiative to revitalize, repair orbuild 5,000 schools; to hook up all our classrooms to the Internet;to give kids in troubled communities mentoring programs, thatguarantees they can go on to college; after-school programs, summerschools programs, the kind of things that don't treat them asfailures just because the system they've been in has failed.
We ought to pass the patients' bill of rights for the160 million Americans that are in managed care to put health carefirst and make sure you're managing for a healthier America, not theother way around. We ought to keep the economy going and maintainour leadership in the global economy by funding our fair share of theInternational Monetary Fund because, as Alan Greenspan said the otherday, we cannot forever maintain our position as an island ofprosperity in a sea of distress.
Now, that's what we ought to be doing. So we're here tocelebrate. But this country is here now, after 220 years, stillagain at the top of its game, having totally debunked all thedefeatists who said we were in decline. But let's not forget why ithappened. Don't you ever forget that these seven people back herestood up, and a lot like them, and laid their jobs on the line forac's future.
Now, when no one has that kind of risk, nobody is beingasked to cut their throat and give up a job they love and work theybelieve in to do the right thing, no one is being asked to do that,how can we possibly walk away from this session of Congress -- whenthere is no pain in doing the right thing, not the kind of pain theyhad to endure -- without saying we're going to save Social Securityfirst, put education as our first investment priority, pass apatients' bill of rights, and keep America and the world's economygrowing? How can we do that? We owe it to the people who made thesacrifice that brought us to this day to build for another day. Weshould not sit on or celebrate this balanced budget, we should buildon it.
Thank you very much. (Applause.)
Budget Deficits, 1969-1998