THE WHITE HOUSE
Office of the President
Why President Clinton's "Save Social Security First" Position Is Right for America October 30, 1998
President Clinton and Vice President Gore Have Fixed Our Fiscal Deficit; Now We Must Fix Our Generational Deficit. In 1992, America's budget deficit was $290 billion : a record dollar high. This past year, we had a $70 billion budget surplus; the first budget surplus since 1969, the largest dollar surplus on record, and the largest as a share of the economy since the 1950s. The achievement of the first budget surplus in a generation provides a unique opportunity to save Social Security for the 21st century.
President Clinton's "Save Social Security First" Position Is Right For America. In the Fall of 1997, when the prospects for the first budget surplus in a generation emerged, many members of Congress rushed out with expensive new ways to spend that surplus, from new spending on government programs to costly tax plans. But in his State of the Union address last January, President Clinton put America's long-run economic interests ahead of short-run politics by demanding that we reserve every penny of the budget surplus until we have strengthened Social Security for the 21st century. President Clinton's commitment to "save Social Security first" is right for our economy and right for our future.
We Have Fixed Our Budget Deficit, Now We Must Fix Our Generational Deficit. Reserving budget surpluses until we save Social Security gives us an additional resource to meet the costs of comprehensive reform. That is why President Clinton resisted all such proposals this year, from the hundreds of billions of dollars on a transportation bill to a $700 billion tax-cut plan. If we relaxed that fiscal discipline before we save Social Security, we could have found ourselves on a slippery slope and ended up squandering the surplus and weakening the prospects for bipartisan Social Security reform.
The Budget Surplus Is Fundamentally a Social Security Surplus. Over the next 10 years, surpluses in the Social Security Trust Fund account for 98 percent of our overall projected surpluses. Since nearly all the surplus comes from Social Security, it makes sense to save the surplus until we know how much is needed to save Social Security.
Preserving the Surplus Helps Create a Strong Incentive for Actually Getting Social Security Reform Done. It is normally impossible for any democracy to tackle long-term problems while the crisis is still only on the horizon. Putting the surplus off-limits until we address saving Social Security provides a strong impetus for all of us to do something to solve a fiscal challenge early so we can prevent a crisis later. If we eliminated this incentive, we may have jeopardized Social Security reform itself.
We Should Not Deviate from Our Successful Three-Part Economic Growth Strategy. In 1993, President Clinton and Vice President Gore put in place a three-part economic strategy to cut the deficit to help reduce interest rates and spur business investment; to invest in education, health care, and technology so that America was prepared to meet the challenges of the 21st century; and to open markets abroad and lead the world economy so that American workers would have a fair chance to compete and win across the globe. This morning, we learned that the economy is growing at a solid and strong 3.3 percent rate, and since President Clinton took office, the private sector has expanded at a nearly 4 percent rate. With unemployment the lowest in 28 years, the core inflation the lowest in more than 30 years, and the highest homeownership rate on record, it is clear that the President's economic growth strategy is working -- we should not deviate from it.