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Office of the Press Secretary

For Immediate Release February 17, 1999
                      PRESIDENT CLINTON'S PROPOSAL  

February 17, 1999

President Clinton Invests the Surplus for Tomorrow -- Reserving Nearly 90% of Projected Surpluses for the Future. Rather than consuming the surpluses for today, President Clinton's proposal reserves nearly 90 percent of the projected $4 trillion in budget surpluses over the next 15 years for the future -- to help America meet our long-term retirement challenge. President Clinton proposes to reserve 62 percent of the surpluses for Social Security, 15 percent for Medicare, and 12 percent for USA Accounts. President Clinton's proposal would pay down nearly $3 trillion of our national debt. As a result, the publicly held debt would be cut by more than two-thirds and, as a share of GDP, will fall from 44 percent today to 7.1 percent in 2014 -- its lowest level since 1917.

Why President Clinton's Plan To Save Social Security, Strengthen Medicare, and Pay Down The National Debt Is Good For Young Americans:

     President Clinton's Plan Ensures that Social Security Benefits Will
     Be There For Today's Young Americans.  The President's proposal
     extends the life of the Trust Fund to 2055, and he is committed to
     working with Congress in a bipartisan way to further extend Social
     Security for 75 years.  This will mean that a worker who is 20
     years old today will be assured of a strong and stable benefit when
     he or she retires.  In addition, the President's framework
     reserves 12 percent of the projected surpluses to create new
     Universal Savings Accounts (USAs) so that young people can begin
     saving and start building wealth to meet their future retirement

     By Paying off the National Debt, President Clinton's Plan Lifts an
     Enormous Burden off Future Generations.   During the 1980's and
     early 1990's, the federal debt quadrupled.  As a share of GDP, the
     publicly held debt increased from 26 percent in 1981 to 50 percent
     in 1993.  Instead of continuing with the failed policies of debt
     and deficit, President Clinton put in place a bold, new economic
     strategy to cut the deficit, lower interest rates and spur economic
     growth.  Now, President Clinton proposes to cut the debt held by
     the public, as share of the economy, to 7.1 percent in 2014.  As
     David Broder wrote in the Washington Post [2/7/99], this is "the
     greatest gift to our children."  Here's why:

        President Clinton's Strategy Will Help Grow The Economy For Our
        Children.  President Clinton's framework will cut the federal
        debt, thereby raising national savings.  Higher national savings
        will mean lower interest rates, higher private-sector
        investment, and thus, higher economic growth in the future.

        President Clinton's Strategy Will Cut The Interest Payments Our
        Children Pay on the Federal Debt.  When President Clinton took
        office, interest payments on the federal debt were projected to
        eat up 27 cents of every budget dollar in 2014.  Today, interest
        payments on the debt take up about 13 cents of every tax dollar.
        Under President Clinton's proposal, interest payments would
        shrink to just 2 cents on every dollar by 2014.

        President Clinton's Strategy Will Ensure That We Do Not Leave a
        Legacy of Debt to Our Children.  President Clinton's proposal
        would cut the debt held by the public, as a share of the
        economy, to 7.1 percent in 2014.  This would mean that instead
        of leaving a mountain of debt for our children, we would
        completely eliminate the national debt by 2018.

     President Clinton's Proposal Ensures Social Security Will Continue
     to Help Young People Today.  President Clinton's plan promises that
     Social Security will continue to provide both disability and
     survivor's insurance protection to workers and their families.  For
     an average young family with two small children, Social Security
     provides benefits which are the equivalent to a payout of $300,000
     each from a disability and survivor's insurance policy (or $600,000
     in total).  By strengthening Social Security, President Clinton's
     plan ensures that Social Security will continue to provide our
     parents and grandparents with a stable benefit -- without which
     many would become dependent on their children for support.