The Clinton Presidency:
Historic Economic Growth
In 1993, President Clinton and Vice President Gore launched their economic
strategy: (1) establishing fiscal discipline, eliminating the budget
deficit, keeping interest rates low, and spurring private-sector
investment; (2) investing in people through education, training, science,
and research; and (3) opening foreign markets so American workers can
compete abroad. After eight years, the results of President Clinton?s
economic leadership are clear. Record budget deficits have become record
surpluses, 22 million new jobs have been created, unemployment and core
inflation are at their lowest levels in more than 30 years, and America is
in the midst of the longest economic expansion in our history.
President Clinton?s Record on the Economy: In 1992, 10 million Americans
were unemployed, the country faced record deficits, and poverty and welfare
rolls were growing. Family incomes were losing ground to inflation and
jobs were being created at the slowest rate since the Great Depression.
Today, America enjoys what may be the strongest economy ever.
? Strong Economic Growth: Since President Clinton and Vice President Gore
took office, economic growth has averaged 4.0 percent per year, compared to
average growth of 2.8 percent during the Reagan-Bush years. The economy
has grown for 116 consecutive months, the most in history.
? Most New Jobs Ever Created Under a Single Administration: The economy has
created more than 22.5 million jobs in less than eight years?the most jobs
ever created under a single administration, and more than were created in
the previous 12 years. Of the total new jobs, 20.7 million, or 92 percent,
are in the private sector.
? Median Family Income Up $6,000 since 1993: Economic gains have been made
across the spectrum as family incomes increased for all Americans. Since
1993, real median family income has increased by $6,338, from $42,612 in
1993 to $48,950 in 1999 (in 1999 dollars).
? Unemployment at Its Lowest Level in More than 30 Years: Overall
unemployment has dropped to the lowest level in more than 30 years, down
from 6.9 percent in 1993 to just 4.0 percent in November 2000. The
unemployment rate has been below 5 percent for 40 consecutive months.
Unemployment for African Americans has fallen from 14.2 percent in 1992 to
7.3 percent in October 2000, the lowest rate on record. Unemployment for
Hispanics has fallen from 11.8 percent in October 1992 to 5.0 percent in
October 2000, also the lowest rate on record.
? Lowest Inflation since the 1960s: Inflation is at the lowest rate since
the Kennedy Administration, averaging 2.5 percent, and it is down from 4.7
percent during the previous administration.
? Highest Homeownership Rate on Record: The homeownership rate reached 67.7
percent for the third quarter of 2000, the highest rate on record. In
contrast, the homeownership rate fell from 65.6 percent in the first
quarter of 1981 to 63.7 percent in the first quarter of 1993.
? 7 Million Fewer Americans Living in Poverty: The poverty rate has
declined from 15.1 percent in 1993 to 11.8 percent last year, the largest
six-year drop in poverty in nearly 30 years. There are now 7 million fewer
people in poverty than there were in 1993.
Establishing Fiscal Discipline and Paying off the National Debt
President Clinton?s Record on Fiscal Discipline: Between 1981 and 1992, the
national debt held by the public quadrupled. The annual budget deficit
grew to $290 billion in 1992, the largest ever, and was projected to grow
to more than $455 billion by Fiscal Year (FY) 2000. As a result of the
tough and sometimes unpopular choices made by President Clinton, and major
deficit reduction legislation passed in 1993 and 1997, we have seen eight
consecutive years of fiscal improvement for the first time in America?s
history.
? Largest Surplus Ever: The surplus in FY 2000 is $237 billion?the third
consecutive surplus and the largest surplus ever.
? Largest Three-Year Debt Pay-Down Ever: Between 1998-2000, the publicly
held debt was reduced by $363 billion?the largest three-year pay-down in
American history. Under Presidents Reagan and Bush, the debt held by the
public quadrupled. Under the Clinton-Gore budget, we are on track to pay
off the entire publicly held debt on a net basis by 2009.
? Lower Federal Government Spending: After increasing under the previous
two administrations, federal government spending as a share of the economy
has been cut from 22.2 percent in 1992 to 18 percent in 2000?the lowest
level since 1966.
? Reduced Interest Payments on the Debt: In 1993, the net interest payments
on the debt held by the public were projected to grow to $348 billion in FY
2000. In 2000, interest payments on the debt were $125 billion lower than
projected.
? Americans Benefit from Reduced Debt: Because of fiscal discipline and
deficit and debt reduction, it is estimated that a family with a home
mortgage of $100,000 might expect to save roughly $2,000 per year in
mortgage payments, like a large tax cut.
? Double Digit Growth in Private Investment in Equipment and Software:
Lower debt will help maintain strong economic growth and fuel private
investments. With government no longer draining resources out of capital
markets, private investment in equipment and software averaged 13.3 percent
annual growth since 1993, compared to 4.7 percent during 1981 to 1992.
To Establish Fiscal Discipline, President Clinton:
? Enacted the 1993 Deficit Reduction Plan without a Single Republican Vote.
Prior to 1993, the debate over fiscal policy often revolved around a false
choice between public investment and deficit reduction. The 1993 deficit
reduction plan showed that deficit and debt reductions could be
accomplished in a progressive way by slashing the deficit in half and
making important investments in our future, including education, health
care, and science and technology research. The plan included more than
$500 billion in deficit reduction. It also cut taxes for 15 million of the
hardest-pressed Americans by expanding the Earned Income Tax Credit;
created the Direct Student Loan Program; created the first nine Empowerment
Zones and first 95 Enterprise Communities; and passed tax cuts for small
businesses and research and development.
? Negotiated the Balanced Budget Agreement of 1997. In his 1997 State of
the Union address, President Clinton announced his plan to balance the
budget for the first time in 27 years. Later that year, he signed the
Balanced Budget Act of 1997, a major bipartisan agreement to eliminate the
national budget deficit, create the conditions for economic growth, and
invest in the education and health of our people. It provided middle-class
tax relief with a $500 per child tax credit and the Hope Scholarship and
Lifetime Learning tax credits for college. It also created the Children?s
Health Insurance Program to serve up to 5 million children and made
landmark investments in education initiatives including educational
technology, charter schools, Head Start, and Pell Grants. Finally, it
added 20 more Empowerment Zones and 20 more rural Enterprise Communities,
included the President?s plan to revitalize the District of Columbia, and
continued welfare reform though $3 billion in new resources to move welfare
recipients to private-sector jobs.
? Dedicated the Surplus to Save Social Security and Reduce the National
Debt. In his 1998 and 1999 State of the Union addresses, President Clinton
called on the nation to save the surplus until the solvency of Social
Security is assured. He also repeatedly vetoed large Republican tax cut
bills that would have jeopardized our nation?s fiscal discipline. The
President?s actions led to a bipartisan consensus on saving the surplus and
paying down the debt.
? Extended Medicare Solvency from 1999 to 2025. When President Clinton
took office, Medicare was expected to become insolvent in 1999, then only
six years away. The 1993 deficit reduction act dedicated some of the taxes
paid by Social Security beneficiaries to the Medicare Trust Fund and
extended the life of Medicare by three years to 2002. Thanks to additional
provisions to combat waste, fraud and abuse and bipartisan cooperation in
the 1997 balanced budget agreement, Medicare is now expected to remain
solvent until 2025.
Clinton-Gore Economic Policy Has Dramatically Improved the Economy
"My colleagues and I have been very appreciative of your [President
Clinton?s] support of the Fed over the years, and your commitment to fiscal
discipline has been instrumental in achieving what in a few weeks will be
the longest economic expansion in the nation?s history."
-- Alan Greenspan, Federal Reserve Board Chairman, January 4, 2000, with
President Clinton at Chairman Greenspan?s re-nomination announcement
"The deficit has come down, and I give the Clinton Administration and
President Clinton himself a lot of credit for that. [He] did something
about it, fast. And I think we are seeing some benefits."
-- Paul Volcker, Federal Reserve Board Chairman (1979-1987), in Audacity,
Fall 1994
One of the reasons Goldman Sachs cites for the "best economy ever" is that
"on the policy side, trade, fiscal, and monetary policies have been
excellent, working in ways that have facilitated growth without inflation.
The Clinton Administration has worked to liberalize trade and has used any
revenue windfalls to reduce the federal budget deficit."
-- Goldman Sachs, March 1998
"Clinton?s 1993 budget cuts, which reduced projected red ink by more than
$400 billion over five years, sparked a major drop in interest rates that
helped boost investment in all the equipment and systems that brought forth
the New Age economy of technological innovation and rising productivity."
-- Business Week, May 19, 1997
Opening World Markets to American Goods and Providing Leadership on
Globalization
President Clinton?s Record on Trade and Globalization: In 1992, 10 million
Americans were unemployed, new job creation was slow, and wages were
stagnant. Other nations? high trade barriers limited the ability of
American businesses and farmers to sell their goods abroad and hampered
economic recovery. Our trade policies failed to reflect our values by
failing to take into account the responsibility to protect our environment,
eliminate child labor and sweatshops, and protect the rights of workers
around the world. But today:
? 300 Trade Agreements: President Clinton has opened markets for U.S.
exports abroad and created American jobs through nearly 300 free and fair
trade agreements.
? The Most U.S. Exports Ever. Between 1992 and 2000, U.S. exports of goods
and services grew by 74 percent, or nearly $500 billion, to top $1 trillion
for the first time.
? 1.4 Million More Jobs due to Exports: Jobs supported by American exports
grew by 1.4 million between 1994 and 1998, with jobs supported by exports
paying about 13 percent to 16 percent above the U.S. national average. Jobs
related to goods exports pay, on average, 13 to 16 percent higher than
other jobs.
? Lowest Inflation since the 1960s: Inflation is at the lowest rate since
the Kennedy Administration, in part because global competition has kept
prices low. It has averaged 2.5 percent under this Administration, down
from 4.6 percent during the previous administration.
To Create Trade Opportunities and Expand the Benefits of Globalization,
President Clinton:
? Won Ratification of the North America Free Trade Association (NAFTA) in
1993, creating the world?s largest free trade zone of the U.S., Canada, and
Mexico. U.S. exports to Mexico grew 109 percent from 1993 to 1999, while
exports to the rest of the world grew by 49 percent.
? Won Approval of Permanent Normal Trade Relations with China. In 2000,
Congress ratified permanent normal trade relations with China. The
agreement will integrate China into the world economy through entry into
the World Trade Organization (WTO), open Chinese market to U.S. exports,
slash Chinese tariffs, and protect American workers and companies against
dumping.
? Successfully Completed the Uruguay Round. The 1994 Uruguay Round
transformed the world trading system, opening markets in a wide range of
industries, enabling the U.S. to enforce agreements more effectively, and
applying the rules for the first time to all WTO members (now 138 in
total).
? Fought for the First-Ever African and the Caribbean Basin Trade Bills.
The African Growth and Opportunity Act of 2000 will support increased trade
and investment between the United States and Africa, strengthen African
economies and democratic governments, and increase partnerships to counter
terrorism, crime, environmental degradation and disease. The legislation
will also create incentives for the countries of sub-Saharan Africa and the
Caribbean Basin to continue reforming their economies.
? Promoted Trade Opportunities for High Technology. The Clinton
Administration completed series of trade agreements on technology,
including the WTO?s commitment to duty-free cyberspace, keeping the
Internet free of trade barriers, in 1998; the global WTO agreements on
Financial Services and Basic Telecommunications in 1997; the global WTO
agreement on Information Technology in 1996; and a series of bilateral
agreements on intellectual property, high-tech products, services and other
sectors. These efforts are the building blocks of the New Economy.
? Secured Historic Debt Relief. In March 1999, President Clinton presented
a plan to a U.S.-Africa Summit in Washington that became the basis for the
G-7 agreement in Cologne, Germany (known as the Cologne Debt Initiative).
The plan would triple the amount of debt relief available for poor
countries, reducing their debt by about 70 percent ($90 billion), in return
for firm commitments to channel the benefits into improving the lives of
all their people. In September 1999, the President announced that the U.S.
would unilaterally exceed the terms of the G-7 initiative and entirely
cancel the $5.7 billion in U.S. government debt owed by qualifying
countries. In November 2000, President Clinton won $435 million from
Congress for U.S. participation in the Cologne Initiative.
? Dramatically Expanded U.S. Efforts to Fight Child Labor and Expand Basic
Education. In June 1999, the President traveled to the International Labor
Organization (ILO) conference in Geneva, Switzerland, to urge adoption of
an historic international convention banning the worst forms of child
labor. He won $30 million for ILO enforcement of child labor laws and is
fighting for a new initiative to promote basic education in areas of the
world where child labor is widespread. In 2000, at U.S. urging, the G-8
countries endorsed the goal of universal basic education. President
Clinton brought other issues to the forefront of the international economic
agenda, including incorporating labor and environmental considerations in
the work of major international economic institutions, increasing U.S.
support for global efforts to fight HIV-AIDS and infectious diseases, and
closing the digital divide.
? Defused International Economic Crises. In 1995, after Congress refused
to act, President Clinton made $20 billion in emergency loans to Mexico to
stabilize the country?s financial markets. Mexico repaid the loans in
full, with interest, three years ahead of schedule. Following the Asian
and Russian financial crises in 1997 and 1998, the Clinton-Gore
Administration led a global effort to re-capitalize the International
Monetary Fund to allow it to more effectively deal with these problems.
President Clinton also insisted that the G-7 develop a set of measures to
restore confidence in the world financial system.
? Promoted U.S. Competitiveness. The Clinton-Gore Administration has made
key investments in education and training for American workers and research
and development. It has also maintained federal fiscal discipline, helping
to reduce interest rates, encourage private-sector investment, and keep
productivity high.
Rewarding Work and Empowering Communities
President Clinton?s Record on Rewarding Work: In 1992, unemployment reached
7.5 percent, the highest level in eight years. Unemployment and poverty
rates for African Americans and Hispanics were alarming: unemployment
reached 14.2 percent for African Americans and 11.8 percent for Hispanics,
and poverty rates for both groups were nearly 30 percent. But today:
? Higher Incomes at All Levels: After years of stagnant income growth among
average and lower-income families, all income brackets have experienced
double-digit income growth since 1993. The bottom 20 percent saw the
largest income growth at 16.3 percent.
? Lowest Poverty Rate in 20 Years: Since Congress passed President
Clinton?s Economic Plan in 1993, the poverty rate declined from 15.1
percent to 11.8 percent last year, the largest six-year drop in poverty in
nearly 30 years. There are now 7 million fewer people in poverty than
there were in 1993. The child poverty rate has declined more than 25
percent, the poverty rate for single mothers is the lowest ever, the
African American and elderly poverty rates dropped to their lowest level on
record, and the Hispanic poverty rate dropped to its lowest level since
1979.
? Lowest Poverty Rate for Single Mothers on Record: Under President
Clinton, the poverty rate for families with single mothers has fallen from
46.1 percent in 1993 to 35.7 percent in 1999, the lowest level on record.
Between 1980 and 1992, an additional 2.1 million households headed by
single women were pushed into poverty.
? Smallest Welfare Rolls Since 1969: Under the Clinton-Gore Administration,
the welfare rolls have dropped dramatically and are now the lowest since
1969. Between January 1993 and September of 1999, the number of welfare
recipients dropped by 7.5 billion (a 53 percent decline) to 6.6 million.
In comparison, between 1981-1992, the number of welfare recipients
increased by 2.5 million (a 22 percent increase) to 13.6 million people.
To Help All Americans Benefit from Prosperity, President Clinton:
? Ended Welfare as We Knew It. In 1996, President Clinton signed
legislation requiring welfare recipients to work, limiting the time they
can stay on welfare, and providing child care and health care to help them
begin work. It also enacted tough new child support enforcement measures
proposed by the President. In 1997, President Clinton won the
welfare-to-work tax credit to encourage employers to hire long-term welfare
recipients and $3 billion in additional resources to help communities move
long-term welfare recipients into lasting, unsubsidized jobs.
? Rewarded Work by Expanding the Earned Income Tax Credit. In 1993,
President Clinton succeeded in winning passage of an expansion of the
Earned Income Tax Credit, giving a tax cut to 15 million of the
hardest-pressed American workers. In 1999, the EITC lifted 4.1 million
people out of poverty, nearly double the number lifted out of poverty by
the EITC in 1993.
? Created Empowerment Zones. The 1993 Clinton-Gore economic plan created
nine Empowerment Zones and 95 Enterprise Communities to spur local
community planning and economic growth in distressed communities through
tax incentives and federal investment. The President won expansions of the
program in 1994, 1997, and again in 2000. To date, the 31 Empowerment
Zones and 95 Enterprise Communities have leveraged over $10 billion in new
private sector investment, creating thousands of new jobs for local
residents.
? Created Community Development Financial Institutions. In September 1994,
the President signed legislation creating the Community Development
Financial Institutions (CDFI) Fund, a Clinton campaign proposal to support
specialized financial institutions serving often-overlooked customers and
communities. The Fund has certified over 400 CDFIs. It has provided over
$427 million to match investments in CDFIs and to encourage traditional
financial institutions to increase their lending, investment and services
in under-served markets.
? Strengthened the Community Reinvestment Act. In 1995, the Administration
updated the Community Reinvestment Act regulations to focus on banks?
actual service delivery, rather than on compliance efforts. From 1993 to
1998, lenders subject to the law increased mortgage lending to low- and
moderate-income families by 80 percent?more than twice the rate they
increased mortgage lending to other income groups.
? Encouraged Investment in America?s New Markets. In 1999, the President
went on two historic ?New Markets? trips to highlight the continuing need
to bring investment to impoverished inner cities, rural communities and
Native American tribal lands. In 2000, the President and Congress worked
together to pass this bipartisan initiative to stimulate new private
capital investments in economically distressed communities and build
network of private investment institutions to funnel credit, equity and
technical assistance to businesses in America?s new markets.
? Raised the Minimum Wage. In 1996, President Clinton and Vice President
Gore fought for and won a 90-cent per hour increase in the minimum wage,
helping 10 million workers.
? Helped People with Disabilities Work. In 1999, President Clinton
insisted that Congress pass the Work Incentives Improvement Act as a
condition of the budget agreement. This bipartisan law allows people with
disabilities to maintain their Medicare or Medicaid coverage when they
work.
Modernizing for the New Economy through Technology and Consensus
Deregulation
To Capitalize on the Information Technology Revolution, President Clinton
and Vice President Gore Have:
? Modernized Financial Services Laws. In 1993, the laws that governed
America?s financial service sector were antiquated and anti-competitive.
The Clinton-Gore Administration fought to modernize those laws to increase
competition in traditional banking, insurance, and securities industries to
give consumers and small businesses more choices and lower costs. In 1994,
the Clinton-Gore Administration broke another decades-old logjam by
allowing banks to branch across state lines in the Riegle-Neal Interstate
Banking and Branching Efficiency Act of 1994. President Clinton fought for
and won financial modernization legislation, signing the Gramm-Leach-Bliley
Act in November 1999.
? Reformed Telecommunications. In 1996, President Clinton signed
legislation to open up competition between local telephone companies, long
distance providers and cable companies. The law also requires the use of
new V-chip technology to give families greater control over which
television programming comes into their homes.
? Created the E-Rate. With the leadership of Vice President Gore, the
Telecommunications Act contained the E-Rate initiative, which provides
low-cost Internet connections for schools, libraries, rural health clinics
and hospitals. More than 80 percent of America?s public schools have
benefited from the E-rate, which has helped connect 30 million children and
up to 47,000 schools and libraries to the Internet. The percentage of
public schools connected to the Internet has increased from 35 percent in
1994 to 95 percent in 1999. The percentage of classrooms connected to the
Internet has increased from 3 percent in 1994 to 63 percent in 1999.
? Increased Resources for Educational Technology by Over 3,000 Percent.
President Clinton and Vice President Gore increased our investment in
educational technology by over 3,000 percent, from $23 million in FY 1994
to $769 million in FY 2000, including training over 600,000 new teachers to
use technology effectively in the classroom.
? Paved the Way for Electronic Commerce. President Clinton fought to
eliminate legal barriers to using electronic technology to form and sign
contracts, collect and store documents, and send and receive notices and
disclosures, while ensuring that consumers on-line have the same
protections that they have in the paper world. He signed the Electronic
Signatures in Global and National Commerce Act on June 30, 2000.
? Creating Market Opportunities for Technology Firms. The Clinton-Gore
Administration adopted a market-led approach on e-commerce, making spectrum
available for digital wireless, and reforming Cold War export controls.
? Worked to Close the Digital Divide. Since 1992, the President and Vice
President have tripled funding for Community Technology Centers, which
provide access to computers and the Internet to low-income urban and rural
neighborhoods. President Clinton also challenged the private sector to
develop new business models for low-cost computers and Internet access to
make universal access at home affordable for all Americans. The Technology
Literacy Challenge Fund has provided $1 billion in federal resources to
help schools work with businesses and community organizations to put modern
computers, high-quality educational software, and affordable connections to
the Internet in every classroom. The Taxpayer Relief Act of 1997 created a
temporary tax deduction for donations of computers to elementary and
secondary schools.
? Forged Trade Agreements on High Technology. The Clinton Administration
completed series of trade agreements on technology, including the WTO?s
commitment to duty-free cyberspace, keeping the Internet free of trade
barriers, in 1998; the global WTO agreements on Financial Services and
Basic Telecommunications in 1997; the global WTO agreement on Information
Technology in 1996; and a series of bilateral agreements on intellectual
property, high-tech products, services and other sectors; all soon to be
capped by the opening of a major networked economy initiative.
Investing in Educating and Training the American People
President Clinton?s Record on Investing in Americans:
? More Americans Are Enrolling in College: 66 percent of 1998 high school
graduates enrolled in college or trade school the next fall, compared to 60
percent in 1990.
? More High School Students Are Preparing for College: The percentage of
high school graduates who have taken four years of English and three years
each of math, science, and social studies increased from 38 percent to 55
percent between 1990 and 1998. Research shows that high-quality academics
in high school is key to college success.
? More Americans Are Earning College Degrees: Over 32 percent of 25- to
29-year-old high school graduates had earned at least a bachelor?s degree
in 1999, up from 27 percent in 1990. In particular, white and African
American women have seen their college opportunities grow.
? Americans Are Becoming Lifelong Learners: 50 percent of adults
participated in formal learning in the year prior to a 1999 survey, up from
38 percent in 1991.
To Provide Americans with More, Higher-Quality Education and Training,
President Clinton:
? Created the College Tax Credits, the Largest Single Investment in Higher
Education since the G.I. Bill. A $1,500 tax credit for the first two years
of college, the Hope Scholarship will pay for nearly all of a typical
community college?s tuition and fees. The $1,000 Lifetime Learning Tax
Credit reimburses families for 20 percent of their tuition and fees (up to
$5,000 per family) for college, graduate study, or job training. Starting
in 2003, the credit will reimburse families for 20 percent of their costs
up to $10,000, for a maximum value of $2,000. This year, 10 million
American families will save over $7 billion through the college tax
credits.
? Doubled Student Financial Aid. Students will receive over $50 billion in
federal grants, loans, and work-study aid this year, up from $25 billion in
1993. President Clinton has consistently supported budget increases for
Pell Grants; this year, over 3.8 million needy students receive a Pell
Grant scholarship of up to $3,300, a $1,000 larger maximum grant than in
1993. The President won another increase for Pell Grants in the FY 2001
budget, bringing the maximum grant to $3,750. The President also won
increases in work-study funding to help one million students pay for
college.
? Created Direct Student Loans and Reduced Interest Rates. In the Student
Loan Reform Act of 1993, President Clinton won the Direct Student Loan
program to improve customer service and compete with guaranteed lenders.
It has saved taxpayers over $4 billion so far by eliminating lender
subsidies. President Clinton also fought to reduce interest rates and fees
in the Student Loan Reform Act of 1993 and the Higher Education Amendments
of 1998. As a result, students can expect to pay $1,300 less in interest
and fees for the average $10,000 loan than they would have in 1992. The
student loan default rate is now 6.9 percent, down from 22.4 percent eight
years ago.
? Created New Paths to College through GEAR UP, AmeriCorps, and TRIO.
President Clinton won the new GEAR UP initiative in the Higher Education
Amendments of 1998 which is already helping 700,000 low-income middle
school students prepare for college. Over 150,000 Americans have earned
money for college while serving their communities through President
Clinton?s AmeriCorps program, a campaign promise enacted in 1993. To help
disadvantaged youth prepare for and succeed in college, the TRIO programs
have grown by $342 million over the past eight years.
? Strengthened Elementary and Secondary Education. In 1994, President
Clinton reformed federal education initiatives in the Improving America?s
Schools Act and the Goals 2000 Act. The President?s new approach was
grounded in the principles that all of America?s students should meet high
academic standards and the federal government should make new investments
to help them meet those standards. The President has also fought to hire
100,000 teachers, promote educational technology, support charter schools,
build K-16 partnerships, and focus on early reading through America Reads.
? Passed the Workforce Investment Act of 1998. In 1992, President Clinton
and Vice President Gore proposed to streamline and bring greater
accountability to our nation's job training system. In 1998, they won
legislation to meet the needs of both America?s workers and businesses by
encouraging local control of training and employment programs; helping
customers locate assistance through one-stop centers; and empower adults to
receive the training they need.
Reducing Tax Burdens for Average and Hard-Pressed Working Families.
The Clinton Record on Reducing Taxes for Working Families:
? Lowest Federal Income Tax Burden in 35 Years: Federal income taxes as a
percentage of income for the typical American family have dropped to their
lowest level in 35 years.
? Higher Incomes even after Taxes and Inflation: Real after-tax incomes
have grown for Americans at all income levels, much faster than they did
prior to the Clinton-Gore Administration. Real after-tax incomes grew by
an average of 2.6 percent per year for the lower-income half of taxpayers
between 1993 and 1997, while growing by an average of 1.0 percent between
1981 and 1993.
To Cut Taxes for Working Americans, President Clinton:
? Expanded the Earned Income Tax Credit. In 1993, President Clinton
succeeded in expanding the Earned Income Tax Credit, giving a tax cut to 15
million of the hardest-pressed American workers. In 1999, the EITC lifted
4.1 million people out of poverty, nearly double the number lifted out of
poverty by the EITC in 1993.
? Created the $500 per Child Tax Credit. In 1997, President Clinton
secured a $500 per child tax credit for 27 million families with children
under 17, including 13 million children from families with incomes below
$30,000.
? Won the Hope Scholarship Tax Credit. President Clinton proposed tax
credits for college tuition in 1996 and signed them into law in 1997 as
part of the balanced budget agreement. The Hope Scholarship provides a tax
credit of up to $1,500 for tuition and fees for the first two years of
college, roughly equal to the cost of the average community college. It
will save American families $4.9 billion this year.
? Won the Lifetime Learning Tax Credit. Also enacted in 1997, the Lifetime
Learning tax credit provides a 20 percent tax credit on $5,000 of tuition
and fees (to be raised to $10,000 in 2003) for college and graduate
students and adults taking job training. It will reduce the cost of
college and job training for American families by $2.4 billion this year.
? Established Education IRAs. The 1997 balanced budget agreement also
created Education IRAs. For each child under age 18, families may now
deposit $500 per year into an Education IRA in the child's name. Earnings
in the Education IRA accumulate tax-free and no taxes will be due upon
withdrawal if the money is used to pay for college. The law also allowed
taxpayers to withdraw funds from a traditional IRA without penalty to pay
for higher education for themselves or their spouse, child, or even
grandchild.
? Created Empowerment Zones. President Clinton created Empowerment Zones
and Enterprise Communities in 1993 and expanded them in 1994, 1997 and
again in 2000 to spur economic growth in distressed communities through tax
incentives and federal investment. To date, the 31 Empowerment Zones and
95 Enterprise Communities have leveraged over $10 billion in new private
sector investment, creating thousands of new jobs for local residents.
? Simplified Pension Rules. In 1996, President Clinton signed the SIMPLE
(Savings Incentive Match Plan for Employees) plan into law, simplifying and
expanding retirement plan coverage for small businesses.
? Simplified Tax Laws and Protected Taxpayer Rights. President Clinton
signed the Taxpayer Relief Act of 1997 to simplify the tax laws and enhance
taxpayers? rights. The law has saved families and businesses millions of
hours be simplifying and reducing paperwork, such as allowing a tax
exclusion for income from the sale of a home.
? Closed Tax Loopholes. To ensure that all taxpayers pay their fair share,
the Clinton Administration addressed the use and proliferation of corporate
tax shelters by proposing several remedies to curb the growth of such
shelters by increasing disclosure of sheltering activities, increasing and
strengthening the substantial understatement penalty, codifying the
judicially-created economic substance doctrine, and providing consequences
to all parties involved in an abusive sheltering transaction.
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