THE WHITE HOUSE
Office of the Press Secretary
PRESIDENT CLINTON'S PROPOSAL BENEFITS AMERICA'S YOUNG PEOPLE
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 needs. 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. ###