Special Event
Clinton Announces Revised Budget Projections
Aired 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...
(LAUGHTER)
... because there's more good news, I'm going to do it.
But this is the last time I will do it -- this year.
(LAUGHTER)
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.
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