The Clinton/Gore Administration Largest Surplus in History on Track, Paying Off the Debt by 2012 (9/27/00)
The Clinton/Gore Administration Largest Surplus in History on Track, Paying Off the Debt by 2012
September 27, 2000
Today, President Clinton will announce that we:
Estimate a surplus of at least $230 billion in FY2000.
Remain on track to pay off the entire debt by 2012.
Will reduce the debt by an estimated $223 billion in FY2000 and more than $360 billion over last 3 years.
LARGEST UNIFIED SURPLUS EVER AND THE ONLY ON-BUDGET SURPLUS SINCE MEDICARE WAS ESTABLISHED
Instead of a $455 billion deficit, the surplus this year will be at least $230 billion. In 1992, the deficit in the Federal budget was $290 billion – the largest dollar deficit in American history. In January 1993, the Congressional Budget Office projected that the deficit would grow to $455 billion by 2000. Today, the Clinton/Gore Administration is estimating that the surplus will be at least $230 billion this year - the third consecutive surplus and the largest surplus ever, even after adjusting for inflation. Compared with original projections, these results mean that there is over $685 billion less of a government drain on the economy and over $685 billion more that is available for private investment in this one year alone.
Largest unified surplus as a share of the economy since 1948. The 2000 surplus is projected to be 2.4 percent of GDP - the largest surplus as a share of the economy ("GDP") since 1948.
The third consecutive year with a surplus—for the first time in over 50 years. The estimated surplus of at least $230 billion follows a surplus of $124 billion in FY 1999 and $69 billion in FY 1998. The last time America had three surpluses in a row was over fifty years ago in 1947-49. The FY2000 surplus marks the eighth consecutive year of fiscal improvement for the first time in American history - surpassing the pre-Clinton-Gore best of five straight years.
The second consecutive surplus excluding Social Security. Excluding Social Security, the surplus is projected to be $80 billion this year. This is the second consecutive surplus on this basis, for the first time since 1956-57.
The first surplus excluding Social Security and Medicare. This is the only on-budget surplus since Medicare was established in 1965. (The on-budget surplus excludes Social Security and Medicare surpluses).
LARGEST DEBT REDUCTION EVER
The President’s plan to eliminate the debt by 2012 remains on track. President Clinton’s budget proposes to reduce the debt held by the public by $2.9 trillion over the next decade and to eliminate it by 2012. The President’s debt reduction comes from saving the entire $2.3 trillion Social Security surplus, the entire $403 billion Medicare surplus, and $192 billion of the on-budget surplus for debt reduction.
Interest payments would be eliminated. Currently, we spend 12 cents of every Federal dollar on interest payment. These payments, which were once projected to grow to 25 percent of all federal spending in 2012, would be eliminated under the President’s plan by that time.
On track to pay down more than $360 billion in debt over three years. In 1998 and 1999, the debt held by the public was reduced by $140 billion. The government paid down an additional $223 billion in debt held by the public this fiscal year alone. That will bring the total debt pay down to more than $360 billion – the largest three-year debt pay-down in American history. In contrast, under the 12 year tenure of Presidents Reagan and Bush, the debt held by the public quadrupled
The debt held by the public is on track to be $2.4 trillion lower in 2000 than was projected when the President took office. In 1993, the debt held by the public was projected by the Office of Management and Budget to balloon to $5.85 trillion by 2000. Instead, shrinking deficits, and growing surpluses in the last three years are projected to bring the debt down to $3.4 trillion in 2000 – $2.4 trillion less than expected. In 1993, the debt held by the public was 50 percent of GDP and projected to rise to 65 percent of GDP in 2000. Instead, it has been slashed to a projected 35 percent of GDP under the President’s plan and would be completely eliminated by 2012.
REDUCING SPENDING WHILE CUTTING TAXES FOR MIDDLE-INCOME FAMILIES
Federal spending as a share of the economy is the lowest since 1966. Spending restraint under President Clinton has brought spending down federal spending from 22 percent of GDP in 1992 to a projected 18 percent of GDP in 2000 – the lowest since 1966. At the same time, President Clinton has increased strategic investments in education, technology and other areas that are vital to growth.
The smallest Federal civilian workforce in 40 years. The Federal civilian workforce increased from the time when President Reagan took office to the time when President Bush left office. In contrast, since President Clinton and Vice President Gore took office, the Federal workforce has been cut by 377,000—by nearly a fifth – and is now lower than at any time since 1960.
While balancing the budget, running large surpluses and paying down the debt, the Clinton-Gore Administration has provided tax relief for working families. The tax cuts signed into law by the President in 1993 and 1997 – for example, the expanded Earned Income Tax Credit, the $500 child tax credit, the $1,500 HOPE Scholarship Tax Credit, and expanded IRAs have reduced taxes for American working families. The total Federal tax rate for middle-income families has dropped from 24.5 percent in 1992 to 22.8 percent in 1999 – that’s the lowest tax rate since 1978. For families at one-half the median income, the effective Federal tax rate has been slashed from 19.8 percent in 1992 to 14.1 percent in 1999 – that’s the lowest tax rate since 1968.